EXHIBIT 1.1
4,000,000 SHARES
SIGNATURE RESORTS, INC.
COMMON STOCK
UNDERWRITING AGREEMENT
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January , 1997
XXXXXXXXXX SECURITIES
XXXXXXX, SACHS & CO.
XXXXXXXX XXXXXXXX & CO.
XXXXX XXXXXX INC.
As Representatives of the several Underwriters
c/x XXXXXXXXXX SECURITIES
000 Xxxxxxxxxx Xxxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Dear Sirs:
SECTION 1. Introductory. Signature Resorts, Inc., a Maryland
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corporation (the "Company"), proposes to issue and sell 1,600,000 shares of its
authorized but unissued common stock, $.01 par value (the "Common Stock"), and
the several stockholders of the Company listed in Schedule A annexed hereto (the
"Selling Stockholders"), propose to sell 2,400,000 shares of the Company's
issued and outstanding Common Stock to the several underwriters named in
Schedule B annexed hereto (the "Underwriters"), for whom you are acting as
representatives (the "Representatives"). Said aggregate of 4,000,000 shares are
herein called the "Firm Common Shares." In addition, the Company and the
Selling Stockholders propose to grant to the Underwriters an option to purchase
up to 240,000 and 360,000 additional shares, respectively (the "Option Common
Shares") as provided in Section 5 hereof. The Option Shares of the respective
Selling Shareholders are set forth on Schedule A annexed hereto. The Firm
Common Shares and, to the
extent such option is exercised, the Option Common Shares are hereinafter
collectively referred to as the "Common Shares."
Concurrently with the offering of the Common Shares, the Company
proposes to issue and sell an aggregate of $100,000,000 principal amount of its
____% Convertible Subordinated Notes Due 2007 (the "Notes").
You have advised the Company and the Selling Stockholders that the
Underwriters propose to make a public offering of their respective portions of
the Common Shares on the effective date of the Registration Statement
hereinafter referred to, or as soon thereafter as in your judgment is advisable.
The Company and the Selling Stockholders hereby confirm their
respective agreements with respect to the purchase of the Common Shares by the
Underwriters as follows:
SECTION 2. Representations and Warranties of the Company. The
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Company hereby represents and warrants to the several Underwriters that:
(a) A registration statement on Form S-1 (File No. 333-18447) with
respect to the Common Shares has been prepared by the Company in conformity
with the requirements of the Securities Act of 1933, as amended (the
"Act"), and the rules and regulations (the "Rules and Regulations") of the
Securities and Exchange Commission (the "Commission") thereunder, and has
been filed with the Commission. There have been delivered to you two
signed copies of such registration statement and any amendments thereto,
together with two copies of each exhibit filed therewith. Conformed copies
of such registration statement and amendments (but without exhibits) and of
the related preliminary prospectus have been delivered to you in such
reasonable quantities as you have requested for each of the Underwriters.
The Company will next file with the Commission one of the following: (i)
prior to effectiveness of such registration statement, a further amendment
thereto, including the form of final prospectus, or (ii) a final prospectus
in accordance with Rules 430A and 424(b) of the Rules and Regulations. As
filed, such amendment and form of final prospectus, or such final
prospectus, shall include all Rule 430A Information (as hereinafter
defined) and, except
to the extent that you shall agree in writing to a modification, shall be
in all substantive respects in the form furnished to you prior to the date
and time that this Agreement was executed and delivered by the parties
hereto, or, to the extent not completed at such date and time, shall
contain only such specific additional information and other changes (beyond
that contained in the latest Preliminary Prospectus) as the Representatives
shall have approved.
The term "Registration Statement" as used in this Agreement shall mean
such registration statement at the time such registration statement becomes
effective and, in the event any post-effective amendment thereto becomes
effective prior to the First Closing Date, shall also mean such
registration statement as so amended; provided, however, that such term
shall also include all Rule 430A Information deemed to be included in such
registration statement at the time such registration statement becomes
effective as provided by Rule 430A of the Rules and Regulations. The term
"Preliminary Prospectus" shall mean any preliminary prospectus referred to
in the preceding paragraph and any preliminary prospectus included in the
Registration Statement at the time it becomes effective that omits Rule
430A Information. The term "Prospectus" as used in this Agreement shall
mean the prospectus relating to the Common Shares in the form in which it
is first filed with the Commission pursuant to Rule 424(b) of the Rules and
Regulations or, if no filing pursuant to Rule 424(b) of the Rules and
Regulations is required, shall mean the form of final prospectus included
in the Registration Statement at the time such registration statement
becomes effective. The term "Rule 430A Information" means information with
respect to the Common Shares and the offering thereof permitted to be
omitted from the Registration Statement when it becomes effective pursuant
to Rule 430A of the Rules and Regulations.
(b) The Commission has not issued any order preventing or suspending
the use of any Preliminary Prospectus, and each Preliminary Prospectus has
conformed in all material respects to the requirements of the Act and the
Rules and Regulations and, as of its date, has not included any untrue
statement of a material fact or omitted to state a material fact necessary
to make the statements therein, in the light
of the circumstances under which they were made, not misleading; and at the
time the Registration Statement becomes effective, and at all times
subsequent thereto up to and including each Closing Date (as hereinafter
defined), the Registration Statement and the Prospectus, and any amendments
or supplements thereto, will contain all material statements and
information required to be included therein by the Act and the Rules and
Regulations and will in all material respects conform to the requirements
of the Act and the Rules and Regulations, and neither the Registration
Statement nor the Prospectus, nor any amendment or supplement thereto, will
include any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements
therein not misleading; provided, however, no representation or warranty
contained in this Section 2(b) shall be applicable to information contained
in or omitted from any Preliminary Prospectus, the Registration Statement,
the Prospectus or any such amendment or supplement in reliance upon and in
conformity with written information furnished pursuant to Section 4 of this
Agreement to the Company by or on behalf of any Underwriter, directly or
through the Representatives, specifically for use in the preparation
thereof.
(c) The Company has been duly formed and is validly existing as a
corporation, is in good standing under the laws of the State of Maryland,
with full power and authority (corporate and other) to conduct its business
as currently conducted or as described in the Prospectus.
(d) Each of the Company's affiliates (as defined in Rule 144(a) under
the Act) and subsidiaries which is material to the operation of the
Company, considered as whole (the "Company Affiliates and Subsidiaries")
has been duly formed and is validly existing as a partnership, limited
liability company or corporation, as applicable, in good standing under the
laws of its jurisdiction of formation, with full power and authority
(partnership and other) to own and lease its properties and conduct its
respective businesses as currently conducted or described in the
prospectus, except where the failure to be in good standing would not have
a material adverse effect on the condition (financial or otherwise),
business, properties, results of operations or prospects of the
Company and the Company Affiliates and Subsidiaries, considered as one
entity (a "Material Adverse Effect").
(e) The Company and each of the Company Affiliates and Subsidiaries
are in possession of and operating in compliance with all authorizations,
licenses, permits, consents, certificates and orders material to the
conduct of their respective businesses, all of which are valid and in full
force and effect; the Company and each of the Company Affiliates and
Subsidiaries are duly qualified to do business and in good standing as a
foreign corporation, partnership or limited liability company, as
applicable, in each jurisdiction in which the conduct of their respective
businesses requires such qualification, except where the failure to be so
qualified and in good standing would not have a Material Adverse Effect;
and to the Company's knowledge no proceeding has been instituted or
threatened in any such jurisdiction revoking, limiting or curtailing, or
seeking to revoke, limit or curtail, such power and authority or
qualification.
(f) As of September 30, 1996, the Company has an authorized and
outstanding capital stock as set forth under the column captioned "Actual"
under the heading "Consolidated Capitalization" in the Prospectus; the
issued and outstanding shares of Common Stock have been duly authorized and
validly issued, are fully paid and nonassessable, have been issued in
compliance with all federal and state securities laws, were not issued in
violation of or subject to any preemptive rights or other rights to
subscribe for or purchase securities and will conform to the description
thereof contained in the Registration Statement and the Prospectus. The
form of certificate, if any, evidencing the Common Stock complies with all
applicable requirements of Maryland law. Except as disclosed in or
contemplated by the Prospectus and the financial statements of the Company
and the related notes thereto, as of the First Closing Date the Company
does not have outstanding any options to purchase, or any preemptive rights
or other rights to subscribe for or to purchase such securities or
obligations convertible into, or any contracts or commitments to issue or
sell, shares of its capital stock, partnership interests or limited
liability company
interests, as the case may be, or any such options, rights, convertible
securities or obligations.
(g) The Common Shares to be sold by the Company in the public offering
contemplated by this Agreement, when issued, delivered and paid for in the
manner set forth in this Agreement, will be duly authorized and validly
issued, fully paid and nonassessable, will be registered pursuant to
Section 12 of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), have been duly authorized for quotation by the Nasdaq
National Market upon official notice of issuance and will conform to the
description thereof contained in the Prospectus. No preemptive rights or
other rights to subscribe for or purchase Common Stock exist with respect
to the issuance and sale of the Common Shares by the Company pursuant to
this Agreement. Except for the Selling Stockholders, no shareholder of the
Company has any right which has not been waived or lost to require the
Company to register the sale of any Common Stock owned by such shareholder
under the Act in the public offering contemplated by this Agreement. No
further approval or authority of the shareholders or the Board of Directors
of the Company will be required for the issuance and sale of the Common
Shares to be sold by the Company as contemplated herein. No further
approval or authority of the Board of Directors of the Company will be
required for the transfer and sale of the Common Shares to be sold by the
Selling Stockholders as contemplated herein. The description of the
Company's share option, share bonus and other share plans or arrangements,
and the options or other rights granted and exercised thereunder, set forth
in the Prospectus accurately and fairly presents the information required
to be shown with respect to such plans, arrangements, options and rights.
(h) The Company has full legal right, power and authority to enter
into this Agreement and perform the transactions contemplated hereby. This
Agreement has been duly authorized, executed and delivered by the Company
and constitutes a valid and binding obligation of the Company in accordance
with its terms. The making and performance of this Agreement by the
Company and the consummation of the transactions herein contemplated, will
not violate any provisions of any partnership agreement, certificate of
partnership, charter, bylaws or other organizational documents, as
applicable, of the Company or any of the Company Affiliates and
Subsidiaries and will not conflict with, result in the breach or violation
of, or constitute, either by itself or upon notice or the passage of time
or both, a default under (i) any agreement, mortgage, deed of trust, lease,
franchise, license, indenture, permit or other instrument to which the
Company or any of the Company Affiliates and Subsidiaries is a party or by
which the Company, any of the Company Affiliates and Subsidiaries or any of
the Existing Resorts (as defined in the Prospectus) may be bound or
affected or (ii) any statute or any authorization, judgment, decree, order,
rule or regulation of any court or any regulatory body, administrative
agency or other governmental body applicable to the Company, any of the
Company Affiliates and Subsidiaries or any of the Existing Resorts, in each
case except as would not have a Material Adverse Effect. No consent,
approval, authorization or other order of any court, regulatory body,
administrative agency or other governmental body is required, including the
satisfaction of any requirements pursuant to the Xxxx-Xxxxx-Xxxxxx
Antitrust Improvements Act of 1976, as amended, for the execution and
delivery of this Agreement or the consummation of the transactions
contemplated by this Agreement, except for compliance with the Act, the
Exchange Act, the Blue Sky and Canadian securities laws applicable to the
public offering of the Common Shares by the several Underwriters, the
clearance of such offering with the National Association of Securities
Dealers, Inc. (the "NASD"), and except for any such consent, approval,
authorization or other order as has been or will be obtained prior to the
First Closing Date.
(i) Ernst and Young LLP ("E & Y") and Xxxxxx Xxxxxxxx LLP ("Xxxxxx
Xxxxxxxx") who have expressed their opinion with respect to the financial
statements and schedules filed with the Commission as a part of the
Registration Statement and included in the Prospectus and in the
Registration Statement, are independent accountants as required by the Act
and the Rules and Regulations.
(j) The consolidated financial statements of the Company, together
with the related notes thereto, set forth in the Registration Statement and
the Prospectus fairly
present the financial condition of such entities as of the dates indicated
and the results of operations and changes in financial position for the
periods presented. The pro forma financial statements, included in the
Registration Statement and the Prospectus comply in all material respects
with the applicable requirements of Rule 11-02 of Regulation S-X of the
Commission and the pro forma adjustments have been properly applied to the
historical amounts in the compilation of such statements. Such statements,
schedules and related notes have been prepared in accordance with generally
accepted accounting principles applied on a consistent basis as certified
by the independent accountants named in Section 2(i). No other financial
statements or schedules are required to be included in the Registration
Statement. The selected financial data set forth in the Prospectus under
the captions "Consolidated Capitalization", "Selected Combined Historical
Financial Information of the Company" and "Summary Consolidated Historical
and Pro Forma Financial Information" fairly present the information set
forth therein on the basis stated in the Registration Statement.
(k) Except as disclosed in the Prospectus, the Company is not in
violation of any of its articles of organization or by-laws, and is not in
breach or default with respect to any provision of any agreement, judgment,
decree, order, mortgage, deed of trust, lease, franchise, license,
indenture, permit or other instrument to which it is a party or by which it
or any of its properties are bound, or to which any of the property or
assets of the Company is subject except for any such violation, breach or
default that could not have a Material Adverse Effect.
(l) There are no material contracts or other documents required to be
described in the Registration Statement or to be filed as exhibits to the
Registration Statement by the Act or by the Rules and Regulations which
have not been described or filed as required. The material contracts so
described in the Prospectus are in full force and effect on the date
hereof; and neither the Company or any of the Company Affiliates and
Subsidiaries, nor to the best of the Company's knowledge, any other party
is in breach of or default under any such material contracts.
(m) Except as disclosed in the Prospectus, there are no legal or
governmental actions, suits or proceedings pending or threatened to which
the Company or any of the Company Affiliates and Subsidiaries are a party
or of which any resort owned or leased by the Company Affiliates and
Subsidiaries is the subject, or related to environmental or discrimination
matters, which actions, suits or proceedings could reasonably be
anticipated to individually or in the aggregate, prevent or adversely
affect the transactions contemplated by this Agreement or have a Material
Adverse Effect. Neither the Company nor any of the Company Affiliates and
Subsidiaries is a party or subject to the provisions of any material
injunction, judgment, decree or order of any court, regulatory body,
administrative agency or other governmental body.
(n) Except as set forth in the Prospectus, the Company or the Company
Affiliates and Subsidiaries have good and marketable title to all of the
Existing Resorts, and, upon consummation of the Agreement and Plan of
Merger, dated as of September 22, 1996, by and between the Company and
AVCOM International, Inc. ("AVCOM"), as amended (the "Merger Agreement"),
to the Company's knowledge and except as set forth in the Prospectus, the
Registration Statement on S-4 (Registration No. 333-16339) filed by the
Company with the Commission on November 19, 1996 as amended by Amendment
No. 1 filed by the Company with the Commission on December 20, 1996 (the
"S-4") or the schedules to the Merger Agreement (the "Schedules"), the
Company or the Company Affiliates and Subsidiaries will have good and
marketable title to Scottsdale Villa Mirage Resort, Sedona Summit Resort,
Tahoe Beach & Ski Club, Villas on the Lake and The Ridge on Sedona Golf
Resort (collectively, the "Merger Properties"), subject to no lien,
mortgage, pledge, charge or encumbrance of any kind except those reflected
in the financial statements or elsewhere in the Prospectus. Except as
disclosed in the Prospectus, the Company and each of the Company Affiliates
and Subsidiaries owns or leases all such properties as are necessary to
operate the Existing Resorts as now conducted or as proposed to be
conducted, except with respect to the Poipu Resort and the San Xxxx Bay
intervals.
(o) From September 30, 1996 through the date hereof, and except as
described in or specifically contemplated by
the Registration Statement and Prospectus: (i) the Company has not incurred
any material liabilities or obligations, indirect, direct or contingent, or
entered into any material verbal or written agreement or other transaction
which is not in the ordinary course of business or which could result in a
material reduction in the future earnings of the Company; (ii) the Company
has not sustained any loss or interference with its respective businesses
or properties from fire, flood, windstorm, accident or other calamity,
whether or not covered by insurance, that would have a Material Adverse
Effect; (iii) the Company has not paid or declared any dividends or other
distributions with respect to its capital stock, shares or interests, as
applicable (other than such dividends or distributions paid to shareholders
to satisfy tax liabilities) and the Company is not in arrears or default in
the payment of principal or interest on any outstanding material debt
obligations; (iv) there has not been any change (excluding transfers) in
the capital stock (other than the sale of the Common Shares under this
Agreement) of the Company, or indebtedness material to the Company (other
than in the ordinary course of business); and (v) there has not been any
material adverse change in the condition (financial or otherwise),
business, properties, or results of operations of the Company and its
Subsidiaries, considered as one entity (a "Material Adverse Change").
(p) Except as specifically disclosed in or specifically contemplated
by the Prospectus, the Company will have sufficient trademarks, trade
names, patent rights, copyrights, licenses or other similar rights and
proprietary knowledge (collectively, "Intangibles"), approvals and
governmental authorizations to conduct its businesses; the expiration of
any Intangibles, approvals or governmental authorizations will not have a
Material Adverse Effect; and the Company has no knowledge of any material
infringement by any of the Company Affiliates and Subsidiaries of any
Intangibles, and there is no claim being made against the Company or any of
the Company Affiliates and Subsidiaries regarding any Intangible or other
infringement which could have a Material Adverse Effect.
(q) Neither the Company nor any of the Company Affiliates and
Subsidiaries has been advised, or has reason
to believe, that the Company or any of the Company Affiliates and
Subsidiaries is not conducting its businesses in compliance with all
applicable laws, rules and regulations of the jurisdictions in which any of
them is, including, without limitation, all applicable local, state and
federal environmental laws and regulations, in each case except as would
not have a Material Adverse Effect.
(r) The Company and each of the Company Affiliates and Subsidiaries
has filed all necessary federal, state and foreign income and franchise tax
returns and have paid all taxes shown as due thereon; and the Company has
no knowledge of any tax deficiency which has been or might be asserted or
threatened against the Company in each case except as would not have a
Material Adverse Effect.
(s) Neither the Company nor any of the Company Affiliates and
Subsidiaries has distributed or will distribute prior to the First Closing
Date any offering material in connection with the offering and sale of the
Common Shares other than the Prospectus, the Registration Statement,
materials distributed in connection with the offering and sale of the
Common Stock and Notes and other materials permitted or not prohibited by
the Act and the Rules and Regulations.
(t) Neither the Company nor any of the Company Affiliates and
Subsidiaries has at any time during the last five years (i) made any
unlawful contribution to any candidate for foreign office or failed to
disclose fully any contribution in violation of law or (ii) made any
payment to any federal or state governmental officer or official, or other
person charged with similar public or quasi-public duties, other than
payments required or permitted by the laws of the United States or any
jurisdiction thereof.
(u) Neither the Company nor any of the Company Affiliates and
Subsidiaries has taken or will take, directly or indirectly, any action
designed to or that might be reasonably expected to cause or result in
stabilization or manipulation of the price of the Common Stock to
facilitate the sale or resale of the Common Shares.
(v) The Company and the Company Affiliates and Subsidiaries have and
will maintain liability, property and casualty insurance (insured by
insurers of recognized financial responsibility) in favor of the Company,
or the Company Affiliates and Subsidiaries, with respect to each of the
Existing Resorts and, upon consummation of the Merger Agreement, and except
as set forth in the Prospectus, the S-4 or the Schedules, the Merger
Properties (except with respect to the Poipu Resort, such insurance
therefor being obtained and/or maintained by the Poipu Partnership), in an
amount and on such terms as is reasonable and customary for businesses of
the type proposed to be conducted by the Company, including, among other
things, insurance against theft, damage, destruction and acts of vandalism.
The Company has not received from any insurance company notice of any
material defects or deficiencies affecting the insurability of any such
resort.
(w) Title insurance in favor of the Company or the Company Affiliates
and Subsidiaries is in force with respect to each of the Existing Resorts
in an amount reasonably acceptable to a reasonably prudent company in a
similar line of business (except with respect to the St. Maarten Resorts),
and upon consummation of the Merger Agreement, and except as set forth in
the Prospectus, the S-4 or the Schedules, title insurance in favor of the
Company or the Company Affiliates and Subsidiaries will be in force with
respect to the Merger Properties in an amount reasonably acceptable to a
reasonably prudent company in a similar line of business.
(x) The mortgages and deeds of trust encumbering the Existing Resorts
and, to the best knowledge of the Company, and except as set forth in the
Prospectus, the S-4 or the Schedules, the Merger Properties, are not
convertible into equity securities of the Company nor does the Company hold
a participating interest therein and such mortgages and deeds of trust are
not cross-defaulted or cross-collateralized to any property not to be
owned, upon consummation of the Merger Agreement, directly or indirectly by
the Company, and since the Initial Public Offering (as defined in the
Prospectus) and as of the date hereof, the Company has not acquired any
property subject to such mortgage.
(y) The Company and each of the Company Affiliates and Subsidiaries
(i) are in compliance with any and all applicable foreign, federal, state
and local rules, laws and regulations relating to the protection of human
health and safety, the environment or any Hazardous Material (as
hereinafter defined) ("Environmental Laws"), (ii) has received, or will
have received, as of the Closing Date, as the case may be, all permits,
licenses or other approvals required of them under applicable Environmental
Laws to conduct their respective businesses and (iii) is or will be, as of
the Closing Date, as the case may be, in compliance with all terms and
conditions of any such permit, license or approval, in each case except as
would not have a Material Adverse Effect. As used herein, "Hazardous
Material" shall mean (a) any "hazardous substance" as defined by the
Comprehensive Environmental Response, Compensation, and Liability Act of
1980, as amended ("CERCLA"), (b) any "hazardous waste" as defined by the
Resource Conservation and Recovery Act, as amended, (c) any petroleum or
petroleum product, (d) any polychlorinated biphenyl and (e) any pollutant
or contaminant or hazardous, dangerous, or toxic chemical, material, waste
or substance regulated under or within the meaning of any other
Environmental Law.
(z) To the Company's knowledge, there is no liability, alleged
liability or potential liability (including, without limitation, liability,
alleged liability or potential liability for investigatory costs, cleanup
costs, governmental response costs, natural resources damages, property
damages, personal injuries or penalties), of the Company arising out of,
based on or resulting from (a) the presence or release into the environment
of any Hazardous Material at any location, whether or not owned by the
Company, or (b) any violation or alleged violation of any Environmental
Law, which liability, alleged liability or potential liability is required
to be disclosed in the Registration Statement, other than as disclosed
therein.
(aa) The Company is not, nor will it conduct its business in a manner
in which it would become an "investment company" or an entity "controlled"
by an "investment company" as such terms are defined in the Investment
Company Act of 1940, as amended (the "1940 Act").
(bb) The assets of neither the Company nor any of the Company
Affiliates and Subsidiaries constitute, nor will such assets, as of the
Closing Date, constitute "plan assets" under the Employee Retirement Income
Security Act of 1974, as amended ("ERISA").
(cc) The Company and each of the Company Affiliates and Subsidiaries
maintain and will maintain a system of internal accounting controls
sufficient to provide reasonable assurances that (i) transactions are
executed in accordance with management's general or specific authorization;
(ii) transactions are recorded as necessary to permit preparation of
financial statements in conformity with generally accepted accounting
principles and to maintain accountability for assets; (iii) access to
financial and corporate books and records is permitted only in accordance
with management's general or specific authorization; and (iv) the recorded
accountability for assets is compared with existing assets at reasonable
intervals and appropriate action is taken with respect to any differences.
(dd) Neither the Company nor any of the Company Affiliates and
Subsidiaries has incurred any liability for a fee, commission or other
compensation on account of the employment of a broker or finder in
connection with the transactions contemplated by this Agreement other than
as disclosed in the Registration Statement.
(ee) No environmental engineering firm which prepared Phase I
environmental assessment reports (or other similar reports with respect to
the Existing Resorts as set forth in the Registration Statement) was, at
the time such reports were delivered, employed for such purpose on a
contingent basis or had any substantial interest in the Company or any of
the Company Affiliates and Subsidiaries.
(ff) To the Company's knowledge, no labor problem exists or is
imminent with respect to the employees of any of the Existing Resorts, the
Company, any of the Company Affiliates and Subsidiaries, or, except as set
forth in the Prospectus, the S-4 or the Schedules, the Merger Properties
which could have a Material Adverse Effect.
(gg) Each certificate signed by any officer of the Company and
delivered to the Representatives or counsel for the Underwriters shall be
deemed to be a representation and warranty by the Company as to the matters
covered thereby.
(hh) The Company, and to the Company's knowledge, and except as set
forth in the Prospectus, the S-4 or the Schedules, AVCOM are in compliance
with all federal, state, local and foreign laws and regulations regarding
the marketing, offers to sell and sales of vacation intervals in each state
in which the Company is doing business, including but not limited to the
Federal Trade Commission Act, Regulation Z (the truth-in-lending act),
Equity Opportunity Credit Act and Regulation B, Interstate Land Sales Full
Disclosure Act, Telephone Consumer Protection Act, Telemarketing and
Consumer Fraud and Abuse Prevention Act, Fair Housing Act and Civil Rights
Acts of 1964 and 1968, in each case except as would not have a Material
Adverse Effect. The Company and to the Company's knowledge, and except as
set forth in the Prospectus, the S-4 or the Schedules, AVCOM have filed all
required documents and supporting information in compliance with federal,
state, local and foreign laws and regulations, and the Company and to the
Company's knowledge, and except as set forth in the Prospectus, the S-4 or
the Schedules, AVCOM are in compliance with all licensure, anti-fraud,
telemarketing, price, gift and sweepstakes and labor laws to which it is or
may become subject, in each case except as would not have a Material
Adverse Effect. The Company and each of the Company Affiliates and
Subsidiaries have, or upon the First Closing Date will have, all permits
and licenses which are required to sell vacation intervals in each state
and foreign jurisdiction where it conducts business, in each case except as
would not have a Material Adverse Effect. To the Company's knowledge, and
except as set forth in the Prospectus, the S-4 or the Schedules, the
Company will have, upon consummation of the Merger Agreement, all permits
and licenses which are required to sell vacation intervals at the Merger
Properties in each state and foreign jurisdiction where it conducts
business, in each case except as would not have a Material Adverse Effect.
(ii) Except as set forth in the Prospectus, no person has an option
or right of first refusal to purchase all or
part of any of the Existing Resorts (other than the Poipu Resort) and to
the Company's knowledge, and except as set forth in the Prospectus, the S-4
or the Schedules, the Merger Properties, or any interest therein. Each of
the Existing Resorts and, to the Company's knowledge, and except as set
forth in the Prospectus, the S-4 or the Schedules, the Merger Properties
complies with all applicable codes, laws and regulations (including,
without limitation, building and zoning codes and laws relating to
handicapped access), except as would not have a Material Adverse Effect.
The Company has no knowledge of any pending or threatened condemnation
proceedings, zoning changes, or other proceedings or actions that will in
any manner affect the size of, number of vacation intervals planned for,
the use of any improvements on, or access to, the Existing Resorts or,
except as set forth in the Prospectus, the S-4 or the Schedules, the Merger
Properties.
(jj) To the Company's knowledge, no dispute exists or is imminent
between the Company and Promus Hotels, Inc. or between the Company and
Westin Hotels & Resorts and no officer or director of the Company has any
agreement or understanding (verbally or in writing) with Westin Hotels &
Resorts except as set forth in the Prospectus.
(kk) The Common Shares have been approved for listing on the Nasdaq
National Market, subject to official notice of issuance.
(ll) The Company has full legal right, power and authority to enter
into the Merger Agreement and perform the transactions contemplated
thereby. The Merger Agreement has been duly authorized, executed and
delivered by the Company and constitutes a valid and binding obligation of
the Company in accordance with its terms. Assuming the consents and
approvals set forth in the Prospectus have been obtained, the making and
performance of the Merger Agreement by the Company and the consummation of
the transactions therein contemplated, will not violate any provisions of
any partnership agreement, certificate of partnership, charter, bylaws or
other organizational documents, as applicable, of the Company or any of the
Company Affiliates and Subsidiaries and will not conflict with, result in
the breach or violation of, or constitute, either by itself or upon notice
or the passage of time or both, a default under (i) any agreement,
mortgage, deed of trust, lease, franchise, license, indenture, permit or
other instrument to which the Company or any of the Company Affiliates and
Subsidiaries is a party or by which the Company, any of the Company
Affiliates and Subsidiaries and, to the Company's knowledge, and except as
set forth in the Prospectus, the S-4 or the Schedules, AVCOM, or any of the
Existing Resorts, or to the Company's knowledge, and except as set forth in
the Prospectus, the S-4 or the Schedules, the Merger Properties may be
bound or affected or (ii) any statute or any authorization, judgment,
decree, order, rule or regulation of any court or any regulatory body,
administrative agency or other governmental body applicable to the Company,
any of the Company Affiliates and Subsidiaries or any of the Existing
Resorts or, to the Company's knowledge, and except as set forth in the
Prospectus, the S-4 or the Schedules, the Merger Properties, in each case
except as would not have a Material Adverse Effect. No consent, approval,
authorization or other order of any court, regulatory body, administrative
agency or other governmental body is required, including the satisfaction
of any requirements pursuant to the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements Act of 1976, as amended, for the execution and delivery of the
Merger Agreement or the consummation of the transactions contemplated by
the Merger Agreement, except for compliance with the Act, the Exchange Act,
the Blue Sky and Canadian securities laws applicable to the transactions
contemplated by the Merger Agreement, and except for any such consent,
approval, authorization or other order as has been or will be obtained
prior to the First Closing Date.
(mm) The Company has received from its independent certified public
accountants the letter attached hereto respecting pooling of interest
treatment relating to the consummation of the transactions contemplated by
the Merger Agreement.
(nn) To the Company's knowledge, there are no material adverse claims
to any of the Common Shares to be sold by the Selling Stockholders.
SECTION 3. Representations and Warranties of the Selling
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Stockholders. Each of the Selling Stockholders hereby
------------
represents and warrants, jointly but not severally, to the several Underwriters
that:
(a) The Selling Stockholder has all right, power and authority to
enter into this Agreement, the Power of Attorney for Sale of Common Stock
of Signature Resorts, Inc. (the "Power of Attorney") and the Custody
Agreement for Sale of Common Stock of Signature Resorts, Inc. (the "Custody
Agreement") and to consummate the transactions contemplated hereby and
thereby, including, without limitation, the sale, assignment, transfer and
delivery of the Common Shares to be sold by the Selling Stockholder
pursuant to this Agreement. Each of the Power of Attorney and the Custody
Agreement has been duly authorized, executed and delivered by or on behalf
of the Selling Stockholder and constitutes the valid and binding instrument
or agreement of the Selling Stockholder enforceable in accordance with its
terms except as such enforceability may be limited by general equitable
principles, bankruptcy, insolvency, reorganization, moratorium or other
laws affecting creditors' rights generally.
(b) The execution, delivery and performance of the Custody Agreement
and the Power of Attorney by the Selling Stockholder (i) requires no
action, consent or approval by or in respect of, or filing with, any
governmental body, agency, official or authority or any individual,
corporation, partnership, association, trust or other entity or
organization which has not been made or obtained and (ii) does not
constitute a default under or give rise to any right of termination,
cancellation or acceleration of any right or obligation of such party or a
loss of any benefit to which such party is entitled under any provision of
any material agreement, contract, indenture, lease or other instrument
binding upon such party or any material license, franchise, permit or other
similar authorization held by such party or result in the creation or
imposition of any mortgage, life interest, lien (except as created by such
agreements), pledge, charge, security interest, fiduciary assignment,
attachment, encumbrance or other adverse claim of any kind in respect of
any asset of such party.
(c) The Selling Stockholder has, and immediately prior to the delivery
of any Common Shares to the Underwriter will
have, good and valid title to the Common Shares to be sold by the Selling
Stockholder pursuant to this Agreement, free and clear of all liens,
encumbrances, equities or claims or any nature, and full right, power and
authority to sell, assign, transfer and deliver such Common Shares, subject
only to this Agreement, the Power of Attorney and the Custody Agreement;
and upon delivery of such Common Shares and payment therefor pursuant to
this Agreement, good and valid title to such Common Shares, free and clear
of all liens, encumbrances, equities or claims of any nature will pass to
the several Underwriters.
(d) The Selling Stockholder will not, for a period of 90 days after
the date of the Prospectus, either directly or indirectly, offer to sell,
agree to sell or otherwise sell or dispose of any shares of Common Stock of
the Company, any options or warrants to purchase any shares of Common Stock
of the Company, or any securities or rights convertible into or
exchangeable for shares of Common Stock of the Company, owned either
directly or indirectly by the Selling Stockholder or with respect to which
the Selling Stockholder has the power of disposition, without the prior
written consent of Xxxxxxxxxx Securities.
(e) The Selling Stockholder has not, in connection with the sale of
the Selling Stockholder's Common Shares to the Underwriters, distributed
any offering material other than that permitted by the Act.
(f) The attention of the Selling Stockholder has been directed to the
rules of the Commission which prohibit the Selling Stockholder from bidding
for or purchasing any shares of the Common Stock of the Company, or
attempting to induce anyone else to bid for or purchase such shares, or
taking any other action which might tend to stabilize or manipulate the
price of the Common Stock, until the distribution of Common Stock pursuant
to the Registration Statement has been completed. The Selling Stockholder
has not taken and will not take, directly or indirectly, any action which
is designed to or which has constituted or which might reasonably be
expected to cause or result in stabilization or manipulation of the price
of any security of the Company to facilitate the sale or resale of the
Common Shares.
(g) The Selling Stockholder has duly executed and placed in custody
all of the documents to be delivered to the Custodian pursuant to the
Custody Agreement, which documents represent all of the Common Shares to be
sold by the Selling Stockholder pursuant to this Agreement.
(h) The Selling Stockholder specifically agrees that the Common Shares
represented by the certificate(s) held in custody for the Selling
Stockholder pursuant to the Custody Agreement are subject to the interest
of the Company, the Underwriters and all the other Selling Stockholders who
may become parties to this Agreement; and, in consideration of those
interests, and for the purpose of completing the transactions contemplated
by this Agreement and the Power of Attorney, the Power of Attorney, the
arrangements made by the Selling Stockholder for such custody, and the
appointment by the Selling Stockholder of the Attorney-in-Fact by the Power
of Attorney, shall be deemed coupled with an interest and shall be
irrevocable subject to Article V of the Power of Attorney. The Selling
Stockholder specifically agrees that the obligations of the Selling
Stockholder pursuant to this Agreement shall not be terminated by operation
of law, whether by the death, disability, incompetence or incapacity of any
individual Selling Stockholder or, in the case of a trust, partnership,
corporation, limited liability company or other entity by the termination,
liquidation, winding up, or dissolution of such trust, partnership,
corporation, limited liability company or other entity or by the occurrence
of any other event, (including, without limitation, the bankruptcy or
insolvency of the Selling Stockholder, or the termination of any trust or
estate for which the Selling Stockholder is acting as a fiduciary) subject
to Article V of the Power of Attorney. If, after the execution hereof, any
individual Selling Stockholder should die or become disabled, incompetent
or incapacitated, or if any Selling Stockholder that is a trust,
partnership, corporation, limited liability company or other entity should
be terminated, liquidated, wound up or dissolved, or if any similar event
should occur (including, without limitation, the bankruptcy or insolvency
of the Selling Stockholder, or the termination of any trust or estate for
which the Selling Stockholder is acting as a fiduciary) before the delivery
of the Shares pursuant to this Agreement, certificates representing the
Shares shall
be delivered by or on behalf of the Selling Stockholder in accordance with
the terms and conditions of this Agreement and of the Custody Agreement,
and actions taken by the Attorney-in-Fact pursuant to the Power of Attorney
shall be as valid as if such death, disability, incompetence or incapacity,
termination, liquidation, winding up or dissolution or other event
(including, without limitation, the bankruptcy or insolvency of the Selling
Stockholder, or the termination of any trust or estate for which the
Selling Stockholder is acting as a fiduciary) had not occurred, regardless
of whether or not the Custodian, the Attorney-in-Fact, or any of them,
shall have received notice thereof, subject to Article V of the Power of
Attorney. The Power of Attorney shall be binding upon the heirs, executors,
successors and assigns of the Selling Stockholder.
(i) Except with respect to Canpartners Incorporated, the Selling
Stockholder is not directly or indirectly an affiliate of or associated
with any member of the NASD.
(j) To the extent that any statements made in the Registration
Statement, any Preliminary Prospectus or the Prospectus, or any amendment
or supplement thereto, are made in reliance upon, and in conformity with,
written information furnished to the Company by such Selling Stockholder
specifically for use in the preparation thereof, such statements will not
contain any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements
therein not misleading.
SECTION 4. Representations and Warranties of the Underwriters. The
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Representatives, on behalf of the several Underwriters, represent and warrant to
the Company and the Selling Stockholders that the information set forth (i) on
the cover page of the Prospectus with respect to price, underwriting discounts
and commissions and terms of offering and (ii) under "Underwriting" in the
Prospectus was furnished to the Company by and on behalf of the Underwriters for
use in connection with the preparation of the Registration Statement and the
Prospectus and is correct in all material respects. The Representatives
represent and warrant that they have been authorized by each of the other
Underwriters as the Representatives to enter into this
Agreement on their behalf and to act for each Underwriter in the manner herein
provided.
SECTION 5. Purchase, Sale and Delivery of Common Shares. On the
--------------------------------------------
basis of the representations, warranties and agreements set forth herein, and
subject to the terms and conditions set forth herein, (i) the Company agrees to
issue and sell to the Underwriters 1,600,000 of the Firm Common Shares; (ii)
each of the Selling Stockholders agrees to sell to the Underwriters the number
of Firm Common Shares set forth opposite the name of such Selling Stockholder in
Schedule A annexed hereto; and (iii) the Underwriters agree, severally and not
jointly, to purchase from the Company and the Selling Stockholders the number of
Firm Common Shares set forth opposite the name of such Underwriter in Schedule B
annexed hereto. The purchase price per share to be paid by the several
Underwriters to the Company and the Selling Stockholders shall be [$____] per
share.
Delivery of certificates for the Firm Common Shares to be purchased by
the Underwriters and payment therefor shall be made at such place as set forth
below at such time and date, not later than the third (or, if the Firm Common
Shares are priced as contemplated by Rule 15c6-1(c) of the Securities Exchange
Act of 1934, after 4:30 p.m. Washington, D.C. time, the fourth) full business
day following the first date that any of the Common Shares are released by you
for sale to the public, as you shall designate by at least 48 hours prior notice
to the Company (or at such other time and date, not later than one week after
such third full business day as may be agreed upon by the Company and the
Representatives) (the "First Closing Date"); provided, however, that if the
Prospectus is at any time prior to the First Closing Date recirculated to the
public, the First Closing Date shall occur upon the later of the third or
fourth, as the case may be, full business day following the later of the first
date that any of the Common Shares are released by you for sale to the public
and the date that is 48 hours after the date that the Prospectus has been so
recirculated.
Delivery of certificates for the Firm Common Shares shall be made by
or on behalf of the Company and the Selling Stockholders to you, for the
respective accounts of the Underwriters against payment by you, for the accounts
of the several Underwriters, by wire transfer of immediately available
funds in proportion to the number of Firm Common Shares to be sold by the
Company and the Selling Stockholders, respectively,to the order of (i) the
Company or other agent designated by the Company and (ii) the Custodian. The
certificates for the Firm Common Shares shall be registered in such names and
denominations as you shall have requested at least two full business days prior
to the First Closing Date, and shall be made available for checking and
packaging on the business day preceding the First Closing Date at a location in
New York, New York or such other location, as may be designated by you. Time
shall be of the essence, and delivery at the time and place specified in this
Agreement is a further condition to the obligations of the Underwriters.
In addition, on the basis of the representations, warranties and
agreements set forth herein, and subject to the terms and conditions set forth
herein, the Company and the Selling Stockholders hereby grant an option to the
several Underwriters to purchase, severally and not jointly, up to an aggregate
of 460,000 Option Common Shares, from the Company and the Selling Stockholders
in the amount of 240,000 Shares and 360,000 Shares, respectively, at the
purchase price per share to be paid for the Firm Common Shares, for use solely
in covering any over-allotments made by you for the account of the Underwriters
in the sale and distribution of the Firm Common Shares. The option granted
hereunder may be exercised at any time (but not more than once) within 30 days
after the first date that any of the Common Shares are released by you for sale
to the public, upon written notice by you to the Company and the Selling
Stockholders setting forth the aggregate number of Option Common Shares as to
which the Underwriters are exercising the option, the names and denominations in
which the certificates for such shares are to be registered and the time and
place at which such certificates will be delivered. Such time of delivery
(which may not be earlier than the First Closing Date), being herein referred to
as the "Second Closing Date," shall be determined by you, but if at any time
other than the First Closing Date shall not be earlier than three nor later than
five full business days after delivery of such notice of exercise. References
herein to "Closing Date" shall mean the First Closing Date and/or the Second
Closing Date, as the context requires. The number of Option Common Shares to be
purchased by each Underwriter from the Company shall be determined by
multiplying the number of Option Common Shares to be sold by the Company
pursuant to such notice of exercise by a fraction, the numerator of which is the
number of Firm Common Shares to be purchased by such Underwriter as set forth
opposite its name in Schedule B and the denominator of which is 4,000,000
(subject to such adjustments to eliminate any fractional share purchases as you
in your discretion may make). The number of Optional Common Shares to be
purchased by each Underwriter from each of the Selling Stockholders shall be
determined by multiplying the number of Optional Common Shares to be sold by
such Selling Stockholder pursuant to such notice
of exercise by a fraction, the numerator of which is the number of Firm Common
Shares to be purchased by such Underwriter as set forth opposite its name in
Schedule B and the denominator of which is 4,000,000. Certificates for the
Option Common Shares will be made available for checking and packaging on the
business day preceding the Second Closing Date at a location in New York, New
York or such other location, as may be designated by you. Payment for the Option
Common Shares shall be the same as for the Firm Common Shares purchased from the
Company and the Selling Stockholders as specified in the two preceding
paragraphs. At any time before lapse of the option, you may cancel such option
by giving written notice of such cancellation to the Company and the Selling
Stockholders. If the option is cancelled or expires unexercised in whole or in
part, the Company will deregister under the Act the number of Option Shares as
to which the option has not been exercised.
You have advised the Company and the Selling Stockholders that each
Underwriter has authorized you to accept delivery of its Common Shares, to make
payment and to issue a receipt therefor. You, individually and not as the
Representatives of the Underwriters, may (but shall not be obligated to) make
payment for any Common Shares to be purchased by any Underwriter whose funds
shall not have been received by you by the First Closing Date or the Second
Closing Date, as the case may be, for the account of such Underwriter, but any
such payment shall not relieve such Underwriter from any of its obligations
under this Agreement.
Subject to the terms and conditions hereof, the Underwriters propose
to make a public offering of their respective portions of the Common Shares as
soon after the effective date of the Registration Statement as in the judgment
of the Representatives is advisable and at the public offering
price set forth on the cover page of and on the terms set forth in the
Prospectus.
SECTION 6. Covenants of the Company. The Company covenants and
------------------------
agrees that:
(a) The Company will use its best efforts to cause the Registration
Statement and any amendment thereof, if not effective at the time and date
that this Agreement is executed and delivered by the parties hereto, to
become effective. If the Registration Statement has become or becomes
effective pursuant to Rule 430A of the Rules and Regulations, or the filing
of the Prospectus is otherwise required under Rule 424(b) of the Rules and
Regulations, the Company will file the Prospectus, properly completed,
pursuant to the applicable paragraph of Rule 424(b) of the Rules and
Regulations within the time period prescribed and will provide evidence
satisfactory to you of such timely filing. The Company will promptly
advise you in writing (i) of the receipt of any comments of the Commission,
(ii) of any request of the Commission for amendment of or supplement to the
Registration Statement (either before or after it becomes effective), any
Preliminary Prospectus or the Prospectus or for additional information,
(iii) when the Registration Statement shall have become effective and (iv)
of the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or of the institution of any
proceedings for that purpose. If the Commission shall enter any such stop
order at any time, the Company will use its best efforts to obtain the
lifting of such order at the earliest possible moment. The Company will not
file any amendment or supplement to the Registration Statement (either
before or after it becomes effective), any Preliminary Prospectus or the
Prospectus of which you have not been furnished with a copy a reasonable
time prior to such filing or to which you reasonably object or which is not
in compliance with the Act and the Rules and Regulations.
(b) The Company will prepare and file with the Commission, promptly
upon your request, any amendments or supplements to the Registration
Statement or the Prospectus which in your judgment may be necessary or
advisable to enable the several Underwriters to continue the distribution
of the Common Shares and will use its best efforts to cause the same to
become effective as promptly as possible. The Company will fully and
completely comply with the provisions of Rule 430A of the Rules and
Regulations with respect to information omitted from the Registration
Statement in reliance upon such Rule.
(c) If at any time within the applicable period referred to in Section
10(a)(3) of the Act or Rule 174 of the Rules and Regulations during which a
prospectus relating to the Common Shares is required to be delivered under
the Act any event occurs, as a result of which the Prospectus, including
any amendments or supplements, would include an untrue statement of a
material fact, or omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading, or if
it is necessary at any time to amend the Prospectus, including any
amendments or supplements, to comply with the Act or the Rules and
Regulations, the Company will promptly advise you thereof and will promptly
prepare and file with the Commission, at its own expense, an amendment or
supplement which will correct such statement or omission or an amendment or
supplement which will effect such compliance and will use its best efforts
to cause the same to become effective as soon as possible; and, in case any
Underwriter is required to deliver a prospectus after the applicable time
period, the Company upon request, but at the expense of such Underwriter,
will promptly prepare such amendment or amendments to the Registration
Statement and such Prospectus or Prospectuses as may be necessary to permit
compliance with the requirements of Section 10(a)(3) of the Act and Rule
174 of the Rules and Regulations, as applicable.
(d) As soon as practicable, but not later than 45 days (or 90 days if
such quarter is the fiscal year end) after the end of the first quarter
ending after one year following the effective date of the Registration
Statement (as defined in Rule 158(c) of the Rules and Regulations), the
Company will make generally available to its security holders an earnings
statement (which need not be audited) covering a period of 12 consecutive
months beginning after the effective date of the Registration Statement
which will satisfy the provisions of the last paragraph of Section 11(a) of
the Act.
(e) During such period as a prospectus is required by law to be
delivered in connection with sales by an Underwriter or dealer, the
Company, at its expense, but only for the applicable period referred to in
Section 10(a)(3) of the Act or Rule 174 of the Rules and Regulations, will
furnish to you or mail to your order copies of the Registration Statement,
the Prospectus, the Preliminary Prospectus and all amendments and
supplements to any such documents in each case as soon as available and in
such quantities as you may reasonably request, for the purposes
contemplated by the Act and the Rules and Regulations.
(f) The Company shall cooperate with you and your counsel in order to
qualify or register the Common Shares for sale under (or obtain exemptions
from the application of) the Blue Sky and Canadian securities laws of such
jurisdictions as you designate, will comply with such laws and will
continue such qualifications, registrations and exemptions in effect so
long as reasonably required for the distribution of the Common Shares,
except that the Company will not be required to qualify as a foreign
corporation or to file a general consent to service of process in any such
jurisdiction where it is not presently qualified or where it would be
subject to taxation as a corporation. The Company will advise you promptly
of the suspension of the qualification or registration of (or any such
exemption relating to) the Common Shares for offering; sale or trading in
any jurisdiction or any initiation or threat of any proceeding for any such
purpose, and in the event of the issuance of any order suspending such
qualification, registration or exemption, the Company, with your
cooperation, will use its best efforts to obtain the withdrawal thereof.
(g) During the period of five years after the date of this Agreement,
the Company will furnish to the Representatives and their counsel and, upon
request of the Representatives, to each of the other Underwriters: (i) as
soon as practicable after the end of each fiscal year, copies of the Annual
Report of the Company containing the balance sheet of the Company as of the
close of such fiscal year and statements of income, shareholders' equity
and cash flows for the year then ended and the opinion thereon of the
Company's independent public accountants; (ii) as soon as
practicable after the filing thereof, copies of each proxy statement,
Annual Report on Form 10-K, Quarterly Report on Form 10-Q, Report on Form
8-K or other report filed by the Company with the Commission, the NASD or
any securities exchange; and (iii) as soon as available, copies of any
report or communication of the Company mailed generally to holders of its
Common Stock.
(h) During the period of 90 days after the first date that any of the
Common Shares are released by you for sale to the public, without your
prior written consent (which consent may be withheld at your sole
discretion), the Company will not, other than as disclosed in the
Prospectus, issue, offer, sell, grant options to purchase or otherwise
dispose of any of the Company's equity securities or any other securities
convertible into or exchangeable with its Common Stock or other equity
security of the Company, except, in each case, to grant options or to sell
shares of Common Stock pursuant to the Company's 1996 Equity Participation
Plan or the Company's Employee Stock Option Plan, each as described in the
Prospectus, to grant options or to sell shares of Common Stock in
connection with the offering and sale of the Notes or to grant options or
to sell or issue shares of Common Stock in connection with the Merger
Agreement.
(i) The Company will apply the net proceeds of the sale of the Common
Shares sold by it in accordance with the statements under the caption "Use
of Proceeds" in the Prospectus.
(j) As necessary, the Company will use its best efforts to qualify or
register its Common Shares for sale in non-issuer transactions under (or
obtain exemptions from the application of) the Blue Sky laws of the State
of California and the provincial laws of Canada as specified by the
Representatives (and thereby permit market making transactions and
secondary trading in the Company's Common Shares in California and such
Canadian provinces as specified by the Representatives), will comply with
such Blue Sky or Canadian provincial laws and continue such qualifications,
registrations and exemptions in effect for a period of five years after the
date hereof.
(k) The Company will use its best efforts to continue the quotation
of the Common Shares as a national market system security on the Nasdaq
National Market.
(l) The Company will maintain a transfer agent and, if necessary
under the jurisdiction of formation of the Company, a registrar (which may
be the same entity as the transfer agent).
You, on behalf of the Underwriters, may, in your sole discretion,
waive in writing the performance by the Company of any one or more of the
foregoing covenants or extend the time for their performance.
SECTION 7. Payment of Expenses. Whether or not the transactions
-------------------
contemplated hereunder are consummated or this Agreement becomes effective or is
terminated, the Company agrees to pay all costs, fees and expenses incurred in
connection with the performance of its obligations hereunder and in connection
with the transactions contemplated hereby, including without limiting the
generality of the foregoing, (i) all expenses incident to the issuance and
delivery of the Common Shares (including all printing and engraving costs), (ii)
all fees and expenses of the registrar and transfer agent of the Common Shares,
(iii) all necessary issue, transfer and other stamp taxes in connection with the
issuance and sale of the Common Shares to the Underwriters, (iv) all fees and
expenses of the Company's counsel and the Company's independent accountants, (v)
all costs and expenses incurred in connection with the preparation, printing,
filing, shipping and distribution of the Registration Statement, each
Preliminary Prospectus and the Prospectus (including all exhibits and financial
statements) and all amendments and supplements provided for herein, this
Agreement, the Agreement Among Underwriters, the Selected Dealers Agreement, the
Underwriters' Questionnaire, the Underwriters' Power of Attorney and the
preliminary and final Blue Sky memoranda, (vi) all filing fees, attorneys' fees
and expenses incurred by the Company or the Underwriters in connection with
qualifying or registering (or obtaining exemptions from the qualification or
registration of) all or any part of the Common Shares for offer and sale under
the Blue Sky laws or the provincial securities laws of Canada, (vii) the filing
fee of the NASD and the fees and expenses related to the inclusion of the Common
Shares on the Nasdaq National Market, and (viii) all other fees, costs and
expenses referred to in Item 13 of Part II of the Registration Statement.
Except as provided in this Section 7, Section 9 and Section 11 hereof, the
Underwriters and the Selling Stockholders shall pay all of their own expenses,
including the fees and disbursements of their counsel (excluding those relating
to qualification, registration or exemption under the Blue Sky and Canadian
provincial securities laws and the preliminary and final Blue Sky memoranda,
which fees shall be paid on the First Closing Date or the Second Closing Date,
as applicable).
This Section 7 shall not affect any agreement between the Company and
the Selling Stockholders relating to the payment of expenses. This Section 7
shall not affect any agreement to which the Company is a party relating to the
payment of expenses incurred in connection with the issuance and sale of the
Notes.
SECTION 8. Conditions of the Obligations of the Underwriters. The
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obligations of the several Underwriters to purchase and pay for the Firm Common
Shares on the First Closing Date and the Option Common Shares on the Second
Closing Date shall be subject to the accuracy of the representations and
warranties on the part of the Company set forth herein as of the date hereof and
as of the First Closing Date or the Second Closing Date, as the case may be, to
the accuracy of the statements of the Company's officers and the Selling
Stockholders made pursuant to the provisions hereof, to the performance of the
Company and the Selling Stockholders of their respective obligations hereunder,
and to the following additional conditions:
(a) The Registration Statement shall have become effective not later
than 5:00 P.M. (or, in the case of a registration statement filed pursuant
to Rule 462(b) of the Rules and Regulations relating to the Common Shares,
not later than 10:00 P.M.), Washington, D.C. Time, on the date of this
Agreement, or at such later time as shall have been consented to by you; if
the filing of the Prospectus, or any supplement thereto, is required
pursuant to Rule 424(b) of the Rules and Regulations, the Prospectus shall
have been filed in the manner and within the time period required by Rule
424(b) of the Rules and Regulations; and prior to such Closing Date, no
stop order suspending the effectiveness of the Registration Statement shall
have been issued and no proceedings for that purpose shall have been
instituted or
shall be pending or, to the knowledge of the Company or you, shall be
contemplated by the Commission; and any request of the Commission for
inclusion of additional information in the Registration Statement, or
otherwise, shall have been complied with to your satisfaction.
(b) There shall have been furnished to you, as Representatives of the
Underwriters, on each Closing Date, in form and substance satisfactory to
you, except as otherwise expressly provided below:
(i) An opinion of Xxxxxx & Xxxxxxx, counsel for the Company
(exclusive of environmental matters, matters relating to real property
ownership and condition, indebtedness of the Company or its affiliates
or subsidiaries, regulation of the Company's business and property or
that of its affiliates or subsidiaries, the Company's or its
affiliates' or subsidiaries' relationship with Promus Hotels
Corporation and Westin Hotels & Resorts and any matters relating to
AVCOM and its subsidiaries and affiliates) addressed to the
Underwriters and dated the First Closing Date, or the Second Closing
Date, as the case may be, to the effect that:
(1) Except as disclosed in or specifically contemplated by
the Prospectus and except for the Notes, to such counsel's
knowledge there are no outstanding options, warrants or other
rights calling for the issuance of any shares of capital stock of
the Company or any security convertible into or exchangeable for
capital stock of the Company;
(2)(a)(i) The Registration Statement has become effective
under the Act; (ii) to such counsel's knowledge, no stop order
suspending the effectiveness of the Registration Statement or
preventing the use of the Prospectus has been issued; (iii) to
such counsel's knowledge, no proceedings for that purpose have
been instituted by the Commission; and (iv) any required filing
of the Prospectus and any supplement thereto pursuant to Rule
424(b) of
the Rules and Regulations has been made in the manner and within
the time period required by such Rule 424(b);
(b) The Registration Statement and the Prospectus comply as
to form in all material respects with the applicable requirements
for registration statements on Form S-1 under the Act and the
Rules and Regulations, it being understood that such counsel need
not express any opinion with respect to the financial statements,
schedules and other financial and statistical data included in
the Registration Statement or the Exhibits thereto;
(c) To such counsel's knowledge, there are no contracts,
agreements, documents, franchises, leases or licenses of a
character required to be disclosed in the Registration Statement
or Prospectus which are not disclosed or filed, as required
(which opinion may be rendered by the Company's general counsel);
and
(d) To such counsel's knowledge, there are no legal or
governmental actions, suits or proceedings pending or threatened
against the Company which are required to be described in the
Prospectus which are not described as required (which opinion may
be rendered by the Company's general counsel);
(3) This Agreement is a valid and binding agreement of the
Company, enforceable in accordance with its terms, except as
enforceability may be limited by general equitable principles,
bankruptcy, insolvency, reorganization, moratorium or other laws
affecting creditors' rights generally and except as to those
provisions relating to indemnity or contribution
for liabilities arising under the Act as to which no opinion need
be expressed;
(4) No approval, authorization, order, consent,
registration, filing, qualification, license or permit of or with
any court, regulatory, administrative or other governmental body
is required for the execution and delivery of this Agreement by
the Company or the consummation of the transactions contemplated
by this Agreement, except (i) such as have been obtained and are
in full force and effect under the Act, (ii) such as may be
required under applicable Blue Sky or Canadian securities laws in
connection with the purchase and distribution of the Common
Shares by the Underwriters; (iii) clearing of such offering with
the NASD; and (iv) such as to which the failure to so obtain
would not have a Material Adverse Effect;
(5) The execution and performance of this Agreement and the
consummation of the transactions herein contemplated will not
conflict with, result in the breach of, or constitute, either by
itself or upon notice or the passage of time or both, a default
under any of the material agreements filed under Rule 601(b)(10)
of Regulation S-K under the Act as exhibits to the Registration
Statement, except as would not have a Material Adverse Effect;
(6) Except for the holders of the Company's Common Stock
who are parties to the Company's Registration Rights Agreement
dated August 19, 1996 and except as otherwise set forth in the
Prospectus, no holders of securities of the Company have rights
to register shares of Common Stock or other securities because of
the filing of the Registration Statement by the Company or the
offering or other transactions contemplated hereby; and
(7) The Company is not an "investment company" within the
meaning of the 1940 Act.
Such counsel shall also include a statement to the effect that
nothing has come to such counsel's attention that would lead such
counsel to believe that either at the effective date of the
Registration Statement or at the applicable Closing Date the
Registration Statement or the Prospectus, or any amendment or
supplement thereto, contains any untrue statement of a material fact
or omits to state any material fact required to be stated therein or
necessary to make the statements therein not misleading, it being
understood that, in addition to the matters excluded in paragraph
(b)(i) above, such counsel express no belief as to the financial
statements, schedules and other financial, statistical, numerical and
accounting data included in the Registration Statement or Prospectus
or in the exhibits to the Registration Statement.
In rendering such opinion, such counsel may rely as to matters of
fact, on certificates of the Company and the Company Affiliates and
Subsidiaries, officers of the Company and the Company Affiliates and
Subsidiaries, and governmental officials, in which case their opinion
is to state that they are so doing and that the Underwriters are
justified in relying on such opinions or certificates and copies of
each of said opinions or certificates are to be attached to the
opinion.
(ii) An opinion of Ballard, Spahr, Xxxxxxx & Xxxxxxxxx, local
counsel for the Company, on matters of Maryland law, addressed to the
Underwriters and dated the First Closing Date, or the Second Closing
Date, as the case may be, to the effect that:
(1) The Company has been duly formed and is validly
existing as a corporation, is in good standing under the laws of
the State of Maryland, and is duly qualified to do business as a
foreign corporation and is in good standing in those
jurisdictions where the conduct of the Company's
business requires it to be qualified, and has the requisite
corporate power and authority to own its Existing Resorts and
conduct its business as described in the Registration Statement;
(2) The authorized, issued and outstanding capital stock of
the Company is as set forth in the Prospectus; all outstanding
shares of Common Stock (including the Common Shares), have been
duly and validly issued, are fully paid and nonassessable, have
been issued in compliance with federal and state securities laws,
were not issued in violation of or subject to any preemptive
rights or other rights to subscribe for or purchase any
securities; and the certificates representing the Common Shares
to be delivered hereunder are in due and proper form under
Maryland law, and when duly countersigned by the Company's
transfer agent and registrar, and delivered to you or upon your
order against payment of the agreed consideration therefor in
accordance with the provisions of this Agreement, the Common
Shares represented thereby will be duly authorized and validly
issued, fully paid and nonassessable, will not have been issued
in violation of or subject to any preemptive rights or other
rights to subscribe for or purchase securities granted under the
laws of the State of Maryland, the Articles of Incorporation or
Bylaws of the Company or any agreement or instrument filed with
the Commission as an exhibit to the Registration Statement; and
will conform in all material respects to the description thereof
contained in the Registration Statement;
(3) This Agreement has been duly and validly authorized by
all necessary action by the Company, has been duly and validly
executed and delivered by and on behalf of the Company; and
(4) The information set forth in the Prospectus under the
headings "Description of Capital Stock", "Certain Provisions of
Maryland Law and of the Company's Charter and Bylaws" and
"Shares Eligible for Future Sale" to the extent that such
information constitutes matters of Maryland law or legal
conclusions involving Maryland law, has been reviewed by such
counsel and is correct in all material respects.
(iii) Opinions of Paul, Hastings, Xxxxxxxx & Xxxxxx and/or
Xxxxxxxxx, Xxxxxxx & Xxxxx (or other counsel acceptable to you), each
a special real estate and timeshare counsel for the Company, addressed
to the Underwriters and dated as of the First Closing Date, or the
Second Closing Date, which opinions shall state to the effect that (it
being understood that such counsel shall only have to opine as to the
laws of the jurisdictions in which it is duly licensed to practice law
in):
(1) The Company has obtained the material approvals and
permits from the timeshare authority of the state in which the
subject Existing Resort is located ("Home State") necessary to
offer for sale and sell timeshare interests and offer purchase
money financing in connection with such sales ("Home State
Approvals") in accordance with the applicable laws and
regulations of the state in which the resort is located
specifically governing the marketing and sale of timeshare
interests in real property ("Home State Timeshare Laws");
(2) All of the permits and/or approvals issued by timeshare
authorities of states other than the state where each applicable
resort is located ("Foreign State") for the offering for sale and
sale of timeshare interests in such resort (collectively, the
"Foreign State Approvals"), constitute the material approvals and
permits necessary to be issued by such Foreign State to permit
the offering for sale and sale of timeshare interests in such
resort in accordance with the laws and regulations of the Foreign
State specifically governing the offering for sale and sale of
timeshare interests in real property
located outside of the Foreign State ("Foreign State Timeshare
Laws");
(3) To such counsel's knowledge and based upon its review of
certificates and letters from state timeshare authorities, the
Company and other pertinent parties (collectively, "Reliance
Certificates and Letters"), the Company has not received any
written notice from any regulatory authority that it is in
violation of any applicable federal or state law or regulation
regarding the offering for sale and sale of timeshare interests
in the resorts, the violation of which would have a Material
Adverse Effect on the ownership or operation of the Existing
Resorts;
(4) To such counsel's knowledge, there are no material
franchises, licenses, leases, contracts, agreements or other
documents (collectively, the "Material Agreements") entered into
by the Company outside the ordinary course of business, which
involve matters relating to the ownership, purchase money
financing and/or use of real property and/or the offering for
sale or sale of timeshare interests in the Existing Resorts,
which are of a character required to be disclosed in the
Registration Statement or to be filed as exhibits to the
Registration Statement which are not disclosed or filed;
(5) To such counsel's knowledge and based upon such
counsel's review of Reliance Certificates and Letters, there are
no real estate or timeshare related governmental actions,
governmental suits or governmental proceedings pending or
threatened against the Company with respect to the business and
property relating to the Existing Resorts except (a) those which
have been disclosed in the Registration Statement, and
(b) those which would not have a Material Adverse Effect;
(6) The consummation by the Company of the transactions
contemplated by the Underwriting Agreement do not require the
consent, approval, authorization, registration or qualification
of (i) any governmental agency or authority of the timeshare
authority of the states where each of the Existing Resorts are
located, (ii) any lender which has a recorded security interest
in the Existing Resorts, (iii) Westin Hotels & Resorts or any
related entities under that certain agreement by and between W &
S Hotel L.L.C. and Argosy/Koar Group, Inc., dated May 3, 1996
("Westin Agreement"), (iv) Promus Hotels, Inc. (or any subsidiary
or affiliate of Promus Hotels, Inc.) under any Licensee
Agreements and Management Agreements with Promus Hotels, Inc. (or
any of its subsidiaries or affiliates) (collectively, the
"Embassy License Agreements and Management Agreements"), except
those which have been obtained and are in full force and effect
and those as to which the failure to so obtain would not have a
Material Adverse Effect;
(7) The consummation by the Company of the transactions
contemplated by the Underwriting Agreement as they relate to the
Existing Resorts do not conflict with or result in a material
breach or violation by the Company of: (i) any of the terms and
provisions of any loans which encumber the Existing Resorts, (ii)
any terms or provisions of the Home State Approvals where each of
the Existing Resorts are located; (iii) any terms or provisions
of the Foreign State Approvals; (iv) the Westin Agreement; (v)
the Embassy License Agreements and Management Agreements, or if
such transactions would have constituted such a breach, violation
or default had the necessary consents or approvals not been
obtained, consents or approvals have been obtained and are in
full force and effect;
(8) The owner of each of the Existing Resorts, if required
by law, has obtained a brokerage or sales license from the state
timeshare authority in order to offer purchase money financing in
connection with the sale of timeshare interests in the applicable
resorts. The owner of each of the Existing Resorts, if required
by law, has obtained a brokerage or sales license from the state
timeshare authority in order to offer for sale and sell timeshare
interests in the State of California or has contracted with a
licensed broker to provide any of the aforementioned services;
and
(9) A statement to the effect that although such counsel is
not passing upon, and does not assume any responsibility for, the
accuracy, completeness or fairness of the statements contained in
the Registration Statement or the Prospectus and has not made any
independent check or verification thereof, during the course of
such participation (relying as to the factual matters upon the
Reliance Certificates and Letters), no facts came to the
counsel's attention that have caused it to believe that the
Registration Statement at the time it became effective and as of
the date hereof or the Prospectus contained an untrue statement
of a material fact or omitted to state a material fact required
to be stated therein or necessary to make the statements therein
in light of the circumstances under which they were made, not
misleading; provided, however, that this statement is limited
solely to the statements or omissions relating to (i)
indebtedness secured by the Existing Resorts (it being understood
that the counsel's review of the Registration Statement has been
limited to legal and other non-financial matters with respect
thereto), (ii) environmental matters with respect to the Existing
Resorts (it being understood that our involvement with respect
thereto has been limited to environmental matters that have come
to the counsel's attention since the acquisition of such Existing
Resorts by the Company), (iii) ownership of the Existing Resorts
(it being understood that our review thereof has been limited to
the review of certain title reports),
(iv) regulation by each Home State and each Foreign State with
respect to the issuance of the Home State Approvals and the
Foreign State Approvals, (v) the Property Partnerships' and the
Company's contractual relationships with Promus or Westin, and
(vi) the statements in the Prospectus under the caption "Business
- Governmental Regulation," to the extent that such information
constitutes matters of law or legal conclusions as it pertains to
the ownership, operation, sale and offering of sale of timeshare
interests in the Existing Resorts.
In rendering such opinions, each such counsel may rely as to
matters of local law, on opinions of local counsel, and as to
matters of fact, on certificates of officers of the Company as
applicable, and of governmental officials, in which case their
opinion is to state that they are doing so and certificates and
copies of each of said opinions or certificates are attached to
the opinion.
(iv) An opinion of Sidley & Austin, as counsel for the Selling
Stockholders separately identified in Schedule A hereto addressed to
the Underwriters and dated as of the First Closing Date, or the Second
Closing Date, which opinions shall state to the effect that:
(1) The Selling Stockholder has all right, power and
authority to enter into this Agreement, the Power of Attorney and
the Custody Agreement and to consummate the transactions
contemplated hereby and thereby, including, without limitation,
the sale, assignment, transfer and delivery of the Shares to be
sold by the Selling Stockholder pursuant to this Agreement. Each
of this Agreement, the Power of Attorney and the Custody
Agreement has been duly authorized, executed and delivered by or
on behalf of the Selling Stockholder and constitutes the valid
and binding instrument or agreement of the Selling Stockholder
enforceable in accordance with its terms except as
such enforceability may be limited by general equitable
principles, bankruptcy, insolvency, reorganization, moratorium or
other laws affecting creditors' rights generally;
(2) The execution, delivery and performance of this
Agreement, the Power of Attorney and the Custody Agreement by the
Selling Stockholder (i) requires no action, consent or approval
by or in respect of, or filing with, any governmental body,
agency, official or authority or any individual, corporation,
partnership, association, trust or other entity or organization
which has not been made or obtained and (ii) does not constitute
a default under or give rise to any right of termination,
cancellation or acceleration of any right or obligation of such
party or a loss of any benefit to which such party is entitled
under any provision of any material agreement, contract,
indenture, lease or other instrument binding upon such party
(with such material agreements to be identified by the Selling
Stockholders) or any material license, franchise, permit or other
similar authorization held by such party or result in the
creation or imposition of any mortgage, life interest, lien,
pledge, charge, security interest, fiduciary assignment,
attachment, encumbrance or other adverse claim of any kind in
respect of any asset of such party; and
(3) Upon delivery of such Common Shares and payment thereof
pursuant to this Agreement, and assuming the Underwriters are
purchasers in good faith and without notice of any adverse claim,
good and valid title to such Common Shares, free and clear of all
liens, encumbrances, equities or claims of any nature will pass
to the several Underwriters.
(v) Opinion of Xxxxxxxxx, Xxxxxxx & Xxxxx, in addition to the
opinion set forth above in section 8(c)(iii), as counsel for the
Company in connection with the Merger Agreement, addressed to the
Underwriters and dated as of the First Closing Date, or
the Second Closing Date, which opinions shall state to the effect
that:
(1) The Company had the corporate power and authority to
enter into the Merger Agreement and to consummate the
transactions contemplated therein; the Merger Agreement has been
duly and validly authorized by all necessary action by the
Company, has been duly and validly executed and delivered by and
on behalf of the Company, and is a valid and binding agreement of
the Company, enforceable in accordance with its terms, except as
enforceability may be limited by general equitable principles,
bankruptcy, insolvency, reorganization, moratorium or other laws
affecting creditors' rights generally and except as to those
provisions relating to indemnity or contribution for liabilities
arising under the Act as to which no opinion need be expressed;
(2) The registration statement and the prospectus filed
with the Commission on November 20, 1996, and the Merger
Agreement were duly and validly authorized by all necessary
action by the Company and conformed in all material respects with
the applicable requirements for registration statements on Form
S-4 under the Act and the Rules and Regulations; and
(3) The Merger has been duly and validly approved by the
shareholders of Avcom.
(vi) An opinion of Xxxxxxxxx & Xxxxxxx, counsel to AVCOM,
substantially in the form required by Section 6.1(c) of the Merger
Agreement.
(vii) Such opinion or opinions of O'Melveny & Xxxxx LLP, counsel
for the Underwriters, dated the First Closing Date or the Second
Closing Date, as the case may be, with respect to the formation of the
Company and other legal matters relating to this Agreement, the
validity of the Common Shares, the Registration Statement and the
Prospectus and other related matters as you may reasonably require,
and the
Company shall have furnished to such counsel such documents and shall
have exhibited to them such papers and records as they may reasonably
request for the purpose of enabling them to pass upon such matters. In
connection with such opinions, such counsel may rely on
representations or certificates of officers of the Company and
governmental officials, as applicable.
(viii) A certificate of the Company, executed by the Chairman of
the Board or President and the chief financial or accounting officer
of the Company, dated the First Closing Date or the Second Closing
Date, as the case may be, to the effect that:
(1) The representations and warranties of the Company set
forth in Section 2 of this Agreement are true and correct as of
the date of this Agreement and as of the First Closing Date or
the Second Closing Date, as the case may be, and the Company has
complied with each of the agreements and satisfied all of the
conditions on its part to be performed or satisfied on or prior
to such Closing Date;
(2) The Commission has not issued any order preventing or
suspending the use of the Prospectus or any Preliminary
Prospectus filed as a part of the Registration Statement or any
amendment thereto; no stop order suspending the effectiveness of
the Registration Statement has been issued; and to the knowledge
of the Company no proceedings for that purpose have been
instituted or are pending or contemplated under the Act;
(3) Each of the respective signers of each certificate has
carefully examined the Registration Statement and the Prospectus;
in his opinion and to the knowledge of the Company, the
Registration Statement and the Prospectus and any amendments or
supplements thereto contain all statements required to be stated
therein; and neither the Registration Statement nor the
Prospectus nor any amendment or supplement thereto
includes any untrue statement of a material fact or omits to
state any material fact required to be stated therein or
necessary to make the statements therein not misleading,
provided, however, that such certificate does not require any
representation concerning statements in, or omissions from, the
Registration Statement or Prospectus, which are based upon and
conform to information furnished by the Underwriters pursuant to
Section 4 hereof;
(4) Since the initial date on which the Registration
Statement was filed, no agreement, written or oral, transaction
or event has occurred which should have been set forth in an
amendment to the Registration Statement or in a supplement to or
amendment of any prospectus which has not been disclosed in such
a supplement or amendment;
(5) Since the respective dates as of which information is
given in the Registration Statement and the Prospectus, and
except as specifically disclosed in or contemplated by the
Prospectus and except for Note Offering, there has not been any
Material Adverse Change or a development involving a Material
Adverse Change; and no legal or governmental action, suit or
proceeding is pending or threatened against the Company, or, to
the knowledge of the Company, any of the Existing Resorts which
would have a Material Adverse Effect; since such dates and except
as so disclosed, the Company has not entered into any verbal or
written agreement or other transaction which is not in the
ordinary course of business, incurred any liability or
obligation, direct, contingent or indirect, made any change in
its capital stock, made any change in its short-term debt or
funded debt or repurchased or otherwise acquired any of the
Company's capital stock which could be reasonably expected to
have a Material Adverse Effect; and the Company has not declared
or paid any dividend, or made any other distribution (other than
dividends or distributions paid to shareholders to satisfy tax
liabilities), upon its capital stock payable to shareholders of
record on a date prior to the First Closing Date or the Second
Closing Date, as the case may be; and
(6) Since the respective dates as of which information is
given in the Registration Statement and the Prospectus and except
as disclosed in or contemplated by the Prospectus, none of the
Existing Resorts has sustained a material loss or damage by
strike, fire, flood, windstorm, hurricane, typhoon, accident or
other calamity (whether or not insured).
(ix) On the date that this Agreement is executed and also on the
First Closing Date and the Second Closing Date a letter addressed to
you, as Representatives of the Underwriters, from E & Y and Xxxxxx
Xxxxxxxx, as applicable, independent accountants, the first one to be
dated the day of this Agreement, the second one to be dated the First
Closing Date and the third one (in the event of a Second Closing) to
be dated the Second Closing Date, in form and substance satisfactory
to the Representatives, to the effect that:
(1) E & Y and Xxxxxx Xxxxxxxx are independent certified
public accountants with respect to the Company within the meaning
of the Act and the Rules and Regulations;
(2) It is their opinion that the financial statements
included in the Registration Statement audited by them comply as
to form in all material respects with the applicable accounting
requirements of the Act and the Rules and Regulations;
(3) The financial statements for the nine months ended
September 30, 1996 and the nine months ended September 30, 1995,
to the extent applicable, were reviewed by them in accordance
with the standards established by the American Institute of
Certified Public Accountants and
based upon their review they are not aware of any material
modifications that should be made to such financial statements
for them to be in conformity with generally accepted accounting
principles currently in effect in the United States to comply as
to form in all material respects with the applicable requirements
of the Act and the Rules and Regulations;
(4) Based upon procedures set forth in detail in such
letter with respect to the period from October 1, 1996 to
December 31, 1996, including a reading of the latest available
interim financial statements of the Company and inquiries of
officials of the Company responsible for financial and accounting
matters, nothing has come to their attention which causes them to
believe that:
(a) at December 31, 1996, there was any change in the
capital stock, increase in long-term debt, or decrease in
consolidated net current assets or stockholders' equity of the
consolidated companies as compared with amounts shown in the
September 30, 1996, unaudited condensed consolidated balance
sheet included in the Registration Statement;
(b) for the period from October 1, 1996, to December 31,
1996, there were any decreases, as compared to the corresponding
period in the preceding year, in consolidated net sales or in the
total or per-share amounts of income before extraordinary items
or of net income, except in all instances for changes, increases,
or decreases that the Registration Statement discloses have
occurred or may occur;
(c) at a specified date not more than five days prior to
the date of this Agreement, other than changes resulting from the
offering and sale of the Notes or the Merger Agreement, (i) there
has been any change in capital stock, increase in long-term debt
or any decreases in consolidated
net current assets or stockholders' equity of the Company as
compared with the amounts shown in the September 30, 1996 balance
sheet of the Company included in the Registration Statement, (ii)
or for the period from October 1, 1996 to a date not to exceed
five days prior to the date of this Agreement there were any
decreases, as compared with the corresponding period in the
preceding year, in consolidated net revenues or in the total per
share amounts of income before extraordinary items or of net
income of the Existing Resorts, except in all instances for
changes, increases or decreases which the Registration Statement
discloses have occurred or may occur; and
(5) In addition to the examination referred to in their
opinions and the procedures referred to above, they have carried
out certain specified procedures, not constituting an audit, with
respect to certain amounts, percentages and financial information
which are included in the Registration Statement and Prospectus
and which were specified by you, and have found such amounts,
percentages and financial information to be in agreement with, or
derived from, the relevant accounting, financial and other
records of the Company and each of the Property Partnerships.
(d) The Firm Common Shares and the Option Common Shares shall have
been approved for listing on the Nasdaq National Market, subject to
official notice of issuance, and the NASD, upon review of the terms of the
public offering, shall not have objected to such offering, such terms or
the Underwriters' participation in the same.
(e) The Company shall have furnished to you such further certificates
and documents as you shall have reasonably requested.
(f) There shall have been delivered to you the Firm Common Shares
and, if any Option Common Shares are purchased, the Option Common Shares in
the manner required pursuant to Section 5 hereof.
All such opinions, certificates, letters and documents shall be in
compliance with the provisions hereof only if they are satisfactory to you and
to O'Melveny & Xxxxx LLP, counsel for the Underwriters. The Company shall
furnish you with such manually signed or conformed copies of such opinions,
certificates, letters and documents as you request. Any certificate signed by
any officer of the Company and delivered to the Representatives or to counsel
for the Underwriters shall be deemed to be a representation and warranty by the
Company to the Underwriters as to each of the statements made therein.
If any condition to the Underwriters' obligations hereunder to be
satisfied prior to or at the First Closing Date is not so satisfied, this
Agreement at your election will terminate upon notification by you as
Representatives to the Company and the Selling Stockholders without liability on
the part of any Underwriter, the Company or the Selling Stockholders, except for
the expenses to be paid or reimbursed by the Company pursuant to Sections 7 and
9 hereof and except to the extent provided in Section 10 hereof.
SECTION 9. Reimbursement of Underwriters' Expenses. Notwithstanding
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any other provisions hereof, if this Agreement shall be terminated by you
pursuant to Section 14, or if the sale to the Underwriters of the Common Shares
at the First Closing is not consummated because of any willful refusal,
inability or failure on the part of the Company or any Selling Stockholder to
perform any agreement herein or to comply with any provision hereof without
reasonable justification therefor, the Company agrees to reimburse, you and the
other Underwriters upon demand for all out-of-pocket expenses that shall have
been reasonably incurred by you and them in connection with the proposed
purchase and the sale of the Common Shares, including but not limited to fees
and disbursements of counsel relating directly to the offering contemplated by
the Prospectus. Any such termination shall be without liability of any party to
any other party except that the provisions of this Section 9, Section 7 and
Section 11 shall at all times be effective and shall apply.
SECTION 10. Effectiveness of Registration Statement. You and the
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Company will use your and its best efforts to cause the Registration Statement
to become effective, to prevent the issuance of any stop order suspending the
effectiveness of the
Registration Statement and, if such stop order be issued, to obtain as soon as
possible the lifting thereof.
SECTION 11. Indemnification. (a) The Company agrees to indemnify
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and hold harmless each Underwriter and each person, if any, who controls any
Underwriter within the meaning of the Act against any losses, claims, damages,
liabilities or expenses, joint or several, to which such Underwriter or such
controlling person may become subject, under the Act, the Exchange Act or other
federal, state or Canadian statutory laws or regulations, or at common law or
otherwise (including in settlement of any litigation, if such settlement is
effected with the written consent of the Company), insofar as such losses,
claims, damages, liabilities or expenses (or actions in respect thereof as
contemplated below) arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact contained in the Registration
Statement, any Preliminary Prospectus, the Prospectus or any amendment or
supplement thereto, or arise out of or are based upon the omission or alleged
omission to state in any of them a material fact required to be stated therein
or necessary to make the statements in any of them not misleading, or arise out
of or are based in whole or in part on any inaccuracy in the representations and
warranties of the Company contained herein or any failure of the Company to
perform its obligations hereunder or under law and will reimburse each
Underwriter and each such controlling person for any legal and other expenses as
such expenses are reasonably incurred by such Underwriter or such controlling
person in connection with investigating, defending, settling, compromising or
paying any such loss, claim, damage, liability, expense or action; provided,
however, that the Company will not be liable in any such case to the extent that
any such loss, claim, damage, liability, expense or action arises out of or is
based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in the Registration Statement, any Preliminary Prospectus,
the Prospectus or as a result of or any amendment or supplement thereto in
reliance upon and in conformity with the information furnished to the Company
pursuant to Section 4 hereof or to the Company by any Selling Stockholder; and
provided the indemnity agreement contained in this Section 11(a) shall not inure
to the benefit of any Underwriter from whom the person asserting any such
losses, claims, damages, liabilities or expenses purchased the Common Shares
concerned to the extent that any such loss, claim, damage, liability or expense
of such Underwriter results
from the fact that a copy of the Prospectus was not sent or given to such person
at or prior to the written confirmation of sale of such Common Shares to such
person as required by the Act. In addition to its other obligations under this
Section 11(a) the Company agrees that it will reimburse expenses as provided in
this Section 11(a) as incurred, but no less frequently than quarterly,
notwithstanding the absence of a judicial determination as to the propriety and
enforceability of the Company's obligations to reimburse each Underwriter for
such expenses and the possibility that such payments might later be held to have
been improper by a court of competent jurisdiction. To the extent that any such
interim reimbursement payment is so held to have been improper, each Underwriter
shall promptly return it to the Company, together with interest, compounded
daily, determined on the basis of the prime rate (or other commercial lending
rate for borrowers of the highest credit standing) announced from time to time
by Bank of America NT&SA, San Francisco, California (the "Prime Rate"). Any such
interim reimbursement payments which are not made to an Underwriter within 30
days of a request for reimbursement shall bear interest at the Prime Rate from
the date of such request. This indemnity agreement will be in addition to any
liability which the Company may otherwise have.
(b) Each Selling Stockholder, severally in proportion to the number of
Common Shares to be sold by such Selling Shareholder hereunder, will indemnify
and hold harmless each Underwriter and each person, if any, who controls any
Underwriter within the meaning of the Act against any losses, claims, damages,
liabilities or expenses, joint or several, to which such Underwriter or such
controlling person may become subject, under the Act, the Exchange Act or other
federal, state or Canadian statutory laws or regulation, or at common law or
otherwise (including in settlement of any litigation, if such settlement is
effected with the written consent of the Selling Stockholder), insofar as such
losses, claims, damages, liabilities or expenses arise out of or are based in
whole or in part on any inaccuracy in the representations and warranties of the
Selling Stockholders contained herein or any failure of the Selling Stockholders
to perform their obligations hereunder or under law and will reimburse each
Underwriter and each such controlling person for any legal and other expenses as
such expenses are reasonably incurred by such Underwriter or such controlling
person in connection with investigating, defending, settling, compromising
or paying any such loss, claim, damage, liability, expense or action; provided,
however, that the Selling Stockholders will not be liable in any such case to
the extent that any such loss, claim, damage, liability, expense or action
arises out of or is based upon an untrue statement or alleged untrue statement
or omission or alleged omission made in the Registration Statement, any
Preliminary Prospectus, the Prospectus or as a result of or any amendment or
supplement thereto in reliance upon and in conformity with the information
furnished to the Company pursuant to Section 4 hereof; and provided the
indemnity agreement contained in this Section 11(a) shall not inure to the
benefit of any Underwriter from whom the person asserting any such losses,
claims, damages, liabilities or expenses purchased the Common Shares concerned
to the extent that any such loss, claim, damage liability or expense of such
Underwriter results from the fact that a copy of the Prospectus was not sent or
given to such person at or prior to the written confirmation of sale of such
Common Shares to such person as required by the Act; and provided further that
each Selling Stockholder's liability shall not exceed in the aggregate the
purchase price per share set forth in Section 5 hereof, multiplied by the number
of Common Shares sold by each Selling Stockholder to the Underwriters.
(c) Each Underwriter will severally indemnify and hold harmless the
Company, the Selling Stockholders, each of its directors, each of its officers
who signed the Registration Statement, each person, if any, who controls the
Company within the meaning of the Act, against any losses, claims, damages,
liabilities or expenses to which the Company, the Selling Stockholders, any such
director, officer, or controlling person may become subject under the Act, the
Exchange Act or other federal or state statutory laws or regulations, or at
common law or otherwise (including in settlement of any litigation, if such
settlement is effected with the written consent of such Underwriter), insofar as
such losses, claims, damages, liabilities or expenses (or actions in respect
thereof as contemplated below) arise out of or are based upon any untrue or
alleged untrue statement of any material fact contained in the Registration
Statement, any Preliminary Prospectus, the Prospectus, or any amendment or
supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, in each case to the
extent, but only to the extent, that such untrue
statement or alleged untrue statement or omission or alleged omission was made
in the Registration Statement, any Preliminary Prospectus, the Prospectus, or
any amendment or supplement thereto, in reliance upon and in conformity with the
information furnished to the Company pursuant to Section 4 hereof; and will
reimburse the Company, any Selling Stockholder, or any such director, officer or
any controlling person of the Company for any legal and other expense reasonably
incurred by the Company, such Selling Stockholder, any such director, officer or
controlling person of the Company in connection with investigating, defending,
settling, compromising or paying any such loss, claim, damage, liability,
expense or action. In addition to its other obligations under this Section
11(c), each Underwriter severally agrees that it will reimburse expenses as
provided in this Section 11(c) as incurred, but no less frequently than
quarterly, notwithstanding the absence of a judicial determination as to the
propriety and enforceability of the Underwriters, obligation to reimburse the
Company (and, to the extent applicable, each Selling Stockholder, each officer,
director or controlling person of the Company) for such expenses and the
possibility that such payments might later be held to have been improper by a
court of competent jurisdiction. To the extent that any such interim
reimbursement payment is so held to have been improper, the Company (and, to the
extent applicable, each Selling Stockholder, each officer, director or
controlling person of the Company) shall promptly return it to the Underwriters
together with interest, compounded daily, determined on the basis of the Prime
Rate. Any such interim reimbursement payments which are not made within 30 days
of a request for reimbursement, shall bear interest at the Prime Rate from the
date of such request. This indemnity agreement will be in addition to any
liability which such Underwriter may otherwise have.
(d) Promptly after receipt by an indemnified party under this Section
of notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against an indemnifying party under this
Section, notify the indemnifying party in writing of the commencement thereof;
but the omission to notify the indemnifying party will not relieve it from any
liability which it may have to any indemnified party for contribution or
otherwise under the indemnity agreement contained in this Section or to the
extent it is not prejudiced as a proximate result of such failure. In case
any such action is brought against any indemnified party and such indemnified
party seeks or intends to seek indemnity from an indemnifying party, the
indemnifying party will be entitled to participate in, and, to the extent that
it may wish, jointly with all other indemnifying parties similarly notified, to
assume the defense thereof with counsel reasonably satisfactory to such
indemnified party; provided, however, that if the defendants in any such action
include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that there may be a conflict
between the positions of the indemnifying party and the indemnified party in
conducting the defense of any such action or that there may be legal defenses
available to it and/or other indemnified parties which are different from or
additional to those available to the indemnifying party, the indemnified party
or parties shall have the right to select separate counsel to assume such legal
defenses and to otherwise participate in the defense of such action on behalf of
such indemnified party or parties. Upon receipt of notice from the indemnifying
party to such indemnified party of its election so to assume the defense of such
action and approval by the indemnified party of counsel, the indemnifying party
will not be liable to such indemnified party under this Section for any legal or
other expenses subsequently incurred by such indemnified party in connection
with the defense thereof unless (i) the indemnified party shall have employed
such counsel in connection with the assumption of legal defenses in accordance
with the proviso to the next preceding sentence (it being understood, however,
that the indemnifying party shall not be liable for the expenses of more than
one separate counsel representing all indemnified parties who are parties to
such action or set of related actions) or (ii) the indemnifying party shall not
have employed counsel reasonably satisfactory to the indemnified party to
represent the indemnified party within a reasonable time after notice of
commencement of the action, in each of which cases the fees and expenses of
counsel shall be at the expense of the indemnifying party.
(e) If the indemnification provided for in this Section is required by
its terms, but is for any reason held to be unavailable to or otherwise
insufficient to hold harmless an indemnified party under Sections 11(a), 11(b),
11(c) or 11(d) hereof in respect of any losses, claims, damages, liabilities or
expenses referred to herein, then each applicable indemnifying party shall
contribute to the amount paid or payable by such
indemnified party as a result of any losses, claims, damages, liabilities or
expenses referred to herein (i) in such proportion as is appropriate to reflect
the relative benefits received by the Company, the Selling Stockholders and the
Underwriters from the offering of the Common Shares or (ii) if the allocation
provided by clause (i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred
to in clause (i) above but also the relative fault of the Company, the Selling
Stockholders and the Underwriters in connection with the statements or omissions
or inaccuracies in the representations and warranties herein which resulted in
such losses, claims, damages, liabilities or expenses, as well as any other
relevant equitable considerations. The respective relative benefits received by
the Company, the Selling Stockholders and the Underwriters shall be deemed to be
in the same proportion, in the case of the Company and the Selling Stockholders
as the total price paid to the Company and the Selling Stockholders for the
Common Shares sold by it and them, respectively, to the Underwriters (net of
underwriting commissions, but before deducting expenses), and in the case of the
Underwriters as the underwriting commissions received by them bears to the total
of such amounts paid to the Company and the Selling Stockholders and received by
the Underwriters as underwriting commissions. The relative fault of the Company,
the Selling Stockholders, and the Underwriters shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact or
the inaccurate or the alleged inaccurate representation and/or warranty relates
to information supplied by the Company, the Selling Stockholders or the
Underwriters and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission. The amount
paid or payable by a party as a result of the losses, claims, damages,
liabilities and expenses referred to above shall be deemed to include, subject
to the limitations set forth in Section (d) of this Section, any legal or other
fees or expenses reasonably incurred by such party in connection with
investigating or defending any action or claim. The provisions set forth in
Section (d) of this Section with respect to notice of commencement of any action
shall apply if a claim for contribution is to be made under this Section (e);
provided, however, that no additional notice shall be required with respect to
any action for which notice has been given under Section (d) of this Section for
purposes of indemnification. The
Company, the Selling Stockholders and the Underwriters agree that it would not
be just and equitable if contribution pursuant to this Section were determined
solely by pro rata allocation (even if the Underwriters were treated as one
entity for such purpose) or by any other method of allocation which does not
take account of the equitable considerations referred to in this paragraph.
Notwithstanding the foregoing, the Underwriters shall be entitled to
contribution from the Selling Stockholders only to the extent that contribution
from the Company to the Underwriters does not fully hold harmless the
Underwriters in respect of all losses, claims, liabilities, or expenses referred
to in this Section, no Selling Stockholder shall be required to give
contribution with respect to any claim for which they would not be required to
provide indemnification as a result of any proviso to Section 11(b) and no
Selling Stockholder shall be required to provide contribution in an amount that,
together with any amounts paid in indemnification pursuant to Section 11(b),
would exceed the limitation on amounts set forth in the third proviso to Section
11(b). Notwithstanding the provisions of this Section, no Underwriter shall be
required to contribute any amount in excess of the amount of the total
underwriting commissions received by such Underwriter in connection with the
Common Shares underwritten by it and distributed to the public. No person guilty
of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Underwriters' obligations to contribute
pursuant to this Section are several in proportion to their respective
underwriting commitments and not joint.
(f) It is agreed that any controversy arising out of the operation of
the interim reimbursement arrangements set forth in Sections 11(a), 11(b) or
11(c) hereof, including the amounts of any requested reimbursement payments and
the method of determining such amounts, shall be settled by arbitration
conducted under the provisions of the Constitution and Rules of the Board of
Governors of the New York Stock Exchange, Inc. or pursuant to the Code of
Arbitration Procedure of the NASD. Any such arbitration must be commenced by
service of a written demand for arbitration or written notice of intention to
arbitrate, therein electing the arbitration tribunal. In the event the party
demanding arbitration does not make such designation of an arbitration tribunal
in such demand or notice, then the party responding to said demand or notice is
authorized to do so. Such
an arbitration would be limited to the operation of the interim reimbursement
provisions contained in Sections 11(a), 11(b) and 11(c) hereof and would not
resolve the ultimate propriety or enforceability of the obligation to reimburse
expenses which is created by the provisions of such Sections 11(a), 11(b) or
11(c) hereof.
SECTION 12. Default of Underwriters. It shall be a condition to this
-----------------------
Agreement and the obligation of the Company and each of the Selling Stockholders
to sell and deliver the Common Shares hereunder, and of each Underwriter to
purchase the Common Shares in the manner as described herein, that, except as
hereinafter in this Section provided, each of the Underwriters shall purchase
and pay for all the Common Shares agreed to be purchased by such Underwriter
hereunder upon tender to the Representatives of all such shares in accordance
with the terms hereof. If any Underwriter or Underwriters default in its or
their obligations to purchase the Common Shares hereunder on either the First or
Second Closing Date and the aggregate number of Common Shares which such
defaulting Underwriter or Underwriters agreed but failed to purchase on such
Closing Date does not exceed 10% of the total number of Shares which the
Underwriters are obligated to purchase on such Closing Date, the non-defaulting
Underwriters shall be obligated severally, in proportion to their respective
commitments hereunder, to purchase the Common Shares which such defaulting
Underwriters agreed but failed to purchase on such Closing Date. If any
Underwriter or Underwriters so default and the aggregate number of Common Shares
with respect to which such default occurs is more than 10% of the total number
of Common Shares which the Underwriters are obligated to purchase on such
Closing Date, and arrangements satisfactory to the Representatives and the
Company for the purchase of such Common Shares or Notes by other persons are not
made within 48 hours after such default, this Agreement will terminate without
liability on the part of any non-defaulting Underwriters, the Company or the
Selling Stockholders except for the expenses to be paid by the Company and the
Selling Stockholders pursuant to Section 7 hereof and except to the extent
provided in Section 11 hereof.
In the event that the Common Shares to which a default relates are to
be purchased by the non-defaulting Underwriters or by another party or parties,
the Representatives or the Company shall have the right to postpone the First
Closing Date or the
Second Closing Date, as the case may be, for not more than five business days in
order that the necessary changes in the Registration Statement, Prospectus and
any other documents, as well as any other arrangements, may be effected. As used
in this Agreement, the term "Underwriter" includes any person substituted for an
Underwriter under this Section. Nothing herein will relieve a defaulting
Underwriter from liability for its default.
SECTION 13. Effective Date. This Agreement shall become effective
--------------
immediately as to Sections 7, 9, 11, 14 and 15 and, as to all other provisions,
(i) if at the time of execution of this Agreement the Registration Statement has
not become effective, at 2:00 P.M., California time, on the first full business
day following the effectiveness of the Registration Statement, or (ii) if at the
time of execution of this Agreement the Registration Statement has been declared
effective, at 2:00 P.M., California time, on the first full business day
following the date of execution of this Agreement; but this Agreement shall
nevertheless become effective at such earlier time after the Registration
Statement becomes effective as you may determine on and by notice to the Company
or by release of any of the Common Shares for sale to the public. For the
purposes of this Section 13, the Common Shares shall be deemed to have been so
released upon the release for publication of any newspaper advertisement
relating to the Common Shares or upon the release by you of telegrams (i)
advising Underwriters that the Common Shares are released for public offering or
(ii) offering the Common Shares for sale to securities dealers, whichever may
occur first.
SECTION 14. Termination. Without limiting the right to terminate
-----------
this Agreement pursuant to any other provision hereof:
(a) This Agreement may be terminated by the Company by notice to you
and the Selling Stockholders or by you by notice to the Company and the
Selling Stockholders at any time prior to the time this Agreement shall
become effective as to all its provisions, and any such termination shall
be without liability on the part of the Company and the Selling
Stockholders to any Underwriter (except for the expenses to be paid or
reimbursed by the Company pursuant to Sections 7 and 9 hereof and except to
the extent provided in Section 11 hereof) or of any Underwriter to the
Company and the Selling
Stockholders (except to the extent provided in Section 11 hereof).
(b) This Agreement may also be terminated by you prior to the First
Closing Date by notice to the Company (i) if additional material
governmental restrictions, not in force and effect on the date hereof,
shall have been imposed upon trading in securities generally or minimum or
maximum prices shall have been generally established on the New York Stock
Exchange or on the American Stock Exchange or in the over the counter
market by the NASD, or trading in securities generally shall have been
suspended on either such Exchange or in the over the counter market by the
NASD, or a general banking moratorium shall have been established by
federal, New York or California authorities; (ii) if an outbreak of major
hostilities or other national or international calamity or any substantial
change in political, financial or economic conditions shall have occurred
or shall have accelerated or escalated to such an extent, as, in the
judgment of the Representatives, to affect adversely the marketability of
the Common Shares; (iii) if any adverse event shall have occurred or shall
exist which makes untrue or incorrect in any material respect any statement
or information contained in the Registration Statement or Prospectus or
which is not reflected in the Registration Statement or Prospectus but
should be reflected therein in order to make the statements or information
contained therein not misleading in any material respect; or (iv) if there
shall be any action, suit or proceeding pending or threatened, or there
shall have been any development involving particularly the business or
properties or securities of the Company or the transactions contemplated by
this Agreement, which, in the reasonable judgment of the Representatives,
may materially and adversely affect the Company's business or earnings and
makes it impracticable or inadvisable to offer or sell the Common Shares.
Any termination pursuant to this Section 14(b) shall be without liability
on the part of any Underwriter to the Company or the Selling Stockholders
or on the part of the Company or the Selling Stockholder to any Underwriter
(except for expenses to be paid or reimbursed by the Company and the
Selling Stockholders pursuant to Sections 7 and 9 hereof and except to the
extent provided in Section 11 hereof).
SECTION 15. Failure of the Selling Stockholders to Sell and Deliver.
-------------------------------------------------------
If any of the Selling Stockholders shall fail to sell and deliver to the
Underwriters the Common Shares to be sold and delivered by such Selling
Stockholder under the terms of this Agreement, then the Underwriters may at
their option, by written notice from you to the Company and such Selling
Stockholder, either (i) terminate this Agreement without any liability on the
part of any Underwriter or, except as provided in Sections 7, 9 and 11 thereof,
the Company or the Selling Stockholders, or (ii) purchase the shares which the
Company and the non-defaulting Selling Stockholders have agreed to sell and
deliver in accordance with the terms hereof. In the event of a failure by a
Selling Stockholder to sell and deliver as referred to in this Section, either
you or the company shall have the right to postpone the Closing Date for a
period not exceeding seven business days in order that the necessary changes in
the Registration Statement, the Prospectus and any other documents, as well as
any other arrangements, may be effected.
SECTION 16. Representations and Indemnities to Survive Delivery. The
---------------------------------------------------
respective indemnities, agreements, representations, warranties and other
statements of the Company, of the Company's officers, of the Selling
Stockholders and of the several Underwriters set forth in or made pursuant to
this Agreement will remain in full force and effect, regardless of any
investigation made by or on behalf of any Underwriter or the Company or any of
its or their partners, officers or directors or any controlling person, or the
Selling Stockholders as the case may be, and will survive delivery of and
payment for the Common Shares sold hereunder and any termination of this
Agreement.
SECTION 17. Notices. All communications hereunder shall be in
-------
writing and, if sent to the Representatives shall be mailed, delivered,
telecopied or telegraphed and confirmed to Xxxxxxxxxx Securities at 000
Xxxxxxxxxx Xxxxxx, Xxx Xxxxxxxxx, Xxxxxxxxxx 00000, Telecopier: (415) 249-
5513, Attention: Xxxx X. Xxxxxxxx, and Xxxxxxx, Xxxxx & Co. at 00 Xxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000, Telecopier: (000) 000-0000, Attention: Xxxx X.
Xxxxxxx with a copy to O'Melveny & Xxxxx LLP, Embarcadero Center West 000
Xxxxxxx Xxxxxx, Xxx Xxxxxxxxx, Xxxxxxxxxx 00000, Telecopier: (000) 000-0000,
Attention: Xxxxx X. Xxxxx, Esq.; and if sent to the Company or the Selling
Stockholders shall be mailed, delivered or telegraphed and confirmed to the
Company or the Selling Stockholder, as applicable at 0000 Xxxx Xxxxxxx
Xxxxxxxxx, Xxxxx 000, Xxx Xxxxxxx, Xxxxxxxxxx 00000 Telecopier: (000) 000-0000
Attention: Xxxxxx X. Xxxxxx with a copy to Xxxxxx & Xxxxxxx, 000 X. Xxxxx
Xxxxxx, Xxxxx 0000, Xxx Xxxxxxx, Xxxxxxxxxx 00000 Telecopier: (000) 000-0000,
Attention: Xxxxxx Xxxxxxxxxxxx, Xx., Esq. The Company, the Selling Stockholder
or you may change the address for receipt of communications hereunder by giving
notice to the others.
SECTION 18. Successors. This Agreement will inure to the benefit of
----------
and be binding upon the parties hereto, including any substitute Underwriters
pursuant to Section 12 hereof, and to the benefit of the officers and directors
and controlling persons referred to in Section 12, and in each case their
respective successors, personal representatives and assigns, and no other person
will have any right or obligation hereunder. No such assignment shall relieve
any party of its obligations hereunder. The term "successors" shall not include
any purchaser of the Common Shares as such from any of the Underwriters merely
by reason of such purchase.
SECTION 19. Underwriters' Representatives. You will act as
-----------------------------
Representatives for the several Underwriters in connection with all dealings
hereunder, and any action under or in respect of this Agreement taken by you, as
Representatives, will be binding upon all of the Underwriters.
SECTION 20. Partial Unenforceability. The invalidity or
------------------------
unenforceability of any section, paragraph or provision of this Agreement shall
not affect the validity or enforceability of any other section, paragraph or
provision hereof. If any section, paragraph or provision of this Agreement is
for any reason determined to be invalid or unenforceable, there shall be deemed
to be made such minor changes (and only such minor changes) as are necessary to
make it valid and enforceable.
SECTION 21. Applicable Law. This Agreement shall be governed by and
--------------
construed in accordance with the internal laws (and not the laws pertaining to
conflicts of laws) of the State of California.
SECTION 22. Knowledge. As used in this Agreement, the term knowledge
---------
or best knowledge on the part of an entity shall include the knowledge of such
entity's officers and any other employees with managerial responsibilities and
such entity shall
only make such statement after conducting a diligent investigation on the
subject matter thereof.
SECTION 23. General. This Agreement constitutes the entire agreement
-------
of the parties to this Agreement and supersedes all prior written or oral and
all contemporaneous oral agreements, understandings and negotiations with
respect to the subject matter hereof. This Agreement may be executed in several
counterparts, each one of which shall be an original, and all of which shall
constitute one and the same document.
In this Agreement, the masculine, feminine and neuter genders and the
singular and the plural include one another. The section headings in this
Agreement are for the convenience of the parties only and will not affect the
construction or interpretation of this Agreement. This Agreement may be amended
or modified, and the observance of any term of this Agreement may be waived,
only by a writing signed by the Company, the Selling Stockholder and you.
If the foregoing is in accordance with your understanding of our
agreement, kindly sign and return to us the enclosed copies hereof, whereupon it
will become a binding agreement among the Company, the Selling Stockholders and
the several Underwriters, including you, all in accordance with its terms.
[Signature Page to Follow]
Very truly yours,
SIGNATURE RESORTS, INC.
By:
-----------------------------
Its
--------------------------
--------------------------------
As Attorney-In-Fact for each of the Selling
Stockholders named in the attached Schedule A
The foregoing Underwriting Agreement is hereby
confirmed and accepted by us in San Francisco,
California as of the date first above written.
XXXXXXXXXX SECURITIES
XXXXXXX, SACHS & CO.
XXXXXXXX XXXXXXXX & CO.
XXXXX XXXXXX INC.
Acting as Representatives of the
several Underwriters named in
the attached Schedule B.
By: XXXXXXXXXX SECURITIES
By:
-----------------------------
Managing Director
SCHEDULE A
Number of
Shares Over-
Selling Stockholder to be Sold allotment
------------------- ---------- ---------
Canpartners Incorporated* 1,126,479 176,371
Xxxx Xxxxxxxx* 224,274 35,079
Xxxxxxx Xxxxxxx* 224,274 35,079
Xxxxxxxx X. Xxxxx* 224,274 35,079
X.X. Investment & Realty, Inc. 78,229 12,236
Peach Tree, Ltd. 100,000
Shinko Sangyou Co. Ltd. 52,212 8,434
Community Funds, Inc. 83,862 12,579
Xxxxxx X. Xxxxxx 59,257 9,399
Kenpoh, Inc. 70,407 11,013
Brains-Heart, Ltd. 23,710 3,831
EKC Corporation 826 134
The California Community Foundation 35,203 5,510
Xxxxx X. Xxxxx 13,889 2,244
Tadaaki Chigusa 21,315 3,334
Xxxxxxx X. Xxxxx 14,069 2,201
Xxxxx Xxxxxx 14,066 2,200
Xxxxxxx X. Xxxxxx 4,678 732
Xxxxxxx X. Xxxxxxxx 2,237 362
Sook Xx Xxx 8,526 1,334
Xxxxxxx Xxxxxxx 8,080 1,264
Xxxxx X. Xxxxxxxx 1,956 306
Xxxx Xxxxxxxx 4,686 733
Xxxxxxx X. Xxxxxx 1,616 252
Xxxxxxx X. Xxxxxx 1,875 294
--------- -------
2,400,000 360,000
--------- -------
*Separately identified for purposes of Section 8(b)(iv)
SCHEDULE B
Amount of
Securities
to be
Underwriter Purchased
----------- ----------
Xxxxxxxxxx Securities [_______]
Xxxxxxx, Sachs & Co. [_______]
Xxxxxxxx Xxxxxxxx & Co. [_______]
Xxxxx Xxxxxx Inc. [_______]
Total 4,000,000
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