$80,000,000
XXXXX XXXXX INC.
___% Senior Subordinated Notes Due 2008
UNDERWRITING AGREEMENT
February __, 1998
XXXXXXXXX, LUFKIN & XXXXXXXX
SECURITIES CORPORATION
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
Xxxxx Xxxxx Inc., a Delaware corporation (the "Company"), proposes to
issue and sell $80,000,000 principal amount of its ___% Senior Subordinated
Notes Due 2005 (the "Securities") to Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities
Corporation (the "Underwriter" or "DLJ"). The Company's obligations with
respect to the Securities are guaranteed (the "Guarantees") by the Company's
subsidiaries, DRI I, Inc., a Delaware corporation ("DRII"), and Xxxxx Xxxxx, a
New York general partnership ("DR" and, collectively with the Company and DRII,
the "Issuers"). The Securities are to be issued pursuant to the provisions of
an Indenture to be dated as of February __, 1998 (the "Indenture") between the
Issuers and State Street Bank and Trust Company of Connecticut, N.A., as
Trustee (the "Trustee").
The Company is concurrently executing and delivering to DLJ, Xxxxxxx,
Xxxxx & Co. and Xxxxx Xxxxxx Inc. an underwriting agreement, dated of even date
herewith (the "Equity Underwriting Agreement"), with respect to the sale by the
Company to the underwriters named therein of an aggregate of 6,700,000 shares
(the "Shares") of common stock, par value $.01 per share, of the Company
("Common Stock"), plus an option to purchase up to an additional 1,005,000
shares of Common Stock to cover over-allotments, if any.
SECTION 1. REGISTRATION STATEMENT AND PROSPECTUS. The Company has
prepared and filed with the Securities and Exchange Commission (the
"Commission"), in accordance with the provisions of the Securities Act of 1933,
as amended, and the rules and regulations of the Commission thereunder
(collectively, the "Act"), a registration statement on Form S-1, including a
prospectus, relating to the Securities. The registration statement, as amended
at the time it became effective, including the information (if any) deemed to
be part of the registration statement at the time of effectiveness pursuant to
Rule 430A under the Act, is hereinafter referred to as the "Registration
Statement"; and the prospectus in the form first used to confirm sales of
Securities is hereinafter referred to as the "Prospectus". If the Company has
filed or is required pursuant to the terms hereof to file a registration
statement pursuant to Rule 462(b) under the Act registering additional ____%
Senior Subordinated Notes Due 2008 (a "Rule 462(b) Registration Statement"),
then, unless otherwise specified, any reference herein to the term
"Registration Statement" shall be deemed to include such Rule 462(b)
Registration Statement.
SECTION 2. AGREEMENTS TO SELL AND PURCHASE. On the basis of the
representations and warranties contained in this Agreement, and subject to its
terms and conditions, the Company agrees to issue and sell to the Underwriter,
and the Underwriter agrees to purchase from the Company, $80,000,000 aggregate
principal amount of the Securities at _____% of the principal amount thereof
(the "Purchase Price").
The Company hereby confirms its engagement of Xxxxxxx, Xxxxx
& Co. ("GS&Co.") as, and GS&Co. hereby confirms its agreement with the Company
to render services as, a "qualified independent underwriter", within the
meaning of Section (b)(15) of Rule 2720 of the National Association of
Securities Dealers, Inc. (the "NASD") with respect to the offering and sale of
the Securities. GS&Co., solely in its capacity as the qualified independent
underwriter and not otherwise, is referred to herein as the "QIU". As
compensation for the services of the QIU hereunder, the Company agrees to pay
the QIU $125,000 on the Closing Date. The yield at which the Securities will
be sold to the public shall not be lower than the minimum yield recommended by
the QIU.
SECTION 3. TERMS OF PUBLIC OFFERING. The Company is advised by you
that the Underwriter proposes (i) to make a public offering of the Securities
as soon after the execution and delivery of this Agreement as in your judgment
is advisable and (ii) initially to offer the Securities upon the terms set
forth in the Prospectus.
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SECTION 4. DELIVERY AND PAYMENT. The Securities shall be represented
by definitive certificates and shall be issued in such authorized denominations
and registered in such names as the Underwriter shall request no later than two
business days prior to the Closing Date (as defined below). The Company shall
deliver the Securities, with any transfer taxes thereon duly paid by the
Company, to the Underwriter through the facilities of The Depository Trust
Company ("DTC"), for the account of the Underwriter, against payment to the
Company of the Purchase Price therefore by wire transfer of Federal or other
funds immediately available in New York City. The certificates representing the
Securities shall be made available for inspection not later than 9:30 A.M., New
York City time, on the business day prior to the Closing Date (as defined
below), at the office of DTC or its designated custodian (the "Designated
Office"). The time and date of delivery and payment for the Securities shall be
9:00 A.M., New York City time, on February ___, 1998 or such other time on the
same or such other date as the Underwriter and the Company shall agree in
writing. The time and date of such delivery and payment are hereinafter
referred to as the "Closing Date".
The documents to be delivered on the Closing Date on behalf of the
parties hereto pursuant to Section 9 of this Agreement shall be delivered at
the offices of Xxxxxx & Xxxxxxx, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 and
the Securities shall be delivered at the Designated Office, all on the Closing
Date.
SECTION 5. AGREEMENTS OF THE COMPANY. The Company agrees with you:
(a) To advise you promptly and, if requested by you, to confirm such
advice in writing, (i) of any request by the Commission for amendments to the
Registration Statement or amendments or supplements to the Prospectus or for
additional information, (ii) of the issuance by the Commission of any stop
order suspending the effectiveness of the Registration Statement or of the
suspension of qualification of the Securities for offering or sale in any
jurisdiction, or the initiation of any proceeding for such purposes, (iii) when
any amendment to the Registration Statement becomes effective, (iv) if the
Company is required to file a Rule 462(b) Registration Statement after the
effectiveness of this Agreement, when the Rule 462(b) Registration Statement
has become effective and (v) of the happening of any event during the period
referred to in Section 5(d) below which makes any statement of a material fact
made in the Registration Statement or the Prospectus untrue or which requires
any additions to or changes in the Registration Statement or the Prospectus in
order to make the statements therein not misleading. If at any time the
Commission shall issue any stop order suspending the effectiveness of the
Registration Statement, the Company will use its best efforts to obtain the
withdrawal or lifting of such order at the earliest possible time.
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(b) To furnish to you three signed copies of the Registration
Statement as first filed with the Commission and of each amendment to it,
including all exhibits, and to furnish to you and each Underwriter designated
by you such number of conformed copies of the Registration Statement as so
filed and of each amendment to it, without exhibits, as you may reasonably
request.
(c) To prepare the Prospectus, the form and substance of which shall
be satisfactory to you, and to file the Prospectus in such form with the
Commission within the applicable period specified in Rule 424(b) under the Act;
during the period specified in Section 5(d) below, not to file any further
amendment to the Registration Statement and not to make any amendment or
supplement to the Prospectus of which you shall not previously have been
advised or to which you shall reasonably object after being so advised; and,
during such period, to prepare and file with the Commission, promptly upon your
reasonable request, any amendment to the Registration Statement or amendment or
supplement to the Prospectus which may be necessary or advisable in connection
with the distribution of the Securities by you, and to use its best efforts to
cause any such amendment to the Registration Statement to become promptly
effective.
(d) Prior to 10:00 A.M., New York City time, on the first business day
after the date of this Agreement and from time to time thereafter for such
period as in the opinion of counsel for the Underwriter a prospectus is
required by law to be delivered in connection with sales by the Underwriter or
a dealer, to furnish in New York City to the Underwriter and any dealer as many
copies of the Prospectus (and of any amendment or supplement to the Prospectus)
as the Underwriter or such dealer may reasonably request.
(e) If during the period specified in Section 5(d) above, any event
shall occur or condition shall exist as a result of which, in the opinion of
counsel for the Underwriter, it becomes necessary to amend or supplement the
Prospectus in order to make the statements therein, in the light of the
circumstances when the Prospectus is delivered to a purchaser, not misleading,
or if, in the opinion of counsel for the Underwriter, it is necessary to amend
or supplement the Prospectus to comply with applicable law, forthwith to
prepare and file with the Commission an appropriate amendment or supplement to
the Prospectus so that the statements in the Prospectus, as so amended or
supplemented, will not in the light of the circumstances when it is so
delivered, be misleading, or so that the Prospectus will comply with applicable
law, and to furnish to the Underwriter and to any dealer as many copies thereof
as the Underwriter or such dealer may reasonably request.
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(f) Prior to any public offering of the Securities, to cooperate with
you and counsel for the Underwriter in connection with the registration or
qualification of the Securities for offer and sale by the Underwriter and by
dealers under the state securities or Blue Sky laws of such jurisdictions as
you may request, to continue such registration or qualification in effect so
long as required for distribution of the Securities and to file such consents
to service of process or other documents as may be necessary in order to effect
such registration or qualification; provided, however, that the Company shall
not be required in connection therewith to qualify as a foreign corporation in
any jurisdiction in which it is not now so qualified or to take any action that
would subject it to general consent to service of process or taxation other
than as to matters and transactions relating to the Prospectus, the
Registration Statement, any preliminary prospectus or the offering or sale of
the Securities, in any jurisdiction in which it is not now so subject.
(g) To mail and make generally available to its security holders as
soon as practicable an earnings statement covering the twelve-month period
ending February __, 1999 that shall satisfy the provisions of Section 11(a) of
the Act, and to advise you in writing when such statement has been so made
available.
(h) So long as the Securities are outstanding, (i) to mail and make
generally available as soon as practicable after the end of each fiscal year to
the record holders of the Securities a financial report of the Company and its
subsidiaries on a consolidated basis (and a similar financial report of all
unconsolidated subsidiaries, if any), all such financial reports to include a
consolidated balance sheet, a consolidated statement of operations, a
consolidated statement of cash flows and a consolidated statement of
shareholders' equity as of the end of and for such fiscal year, together with
comparable information as of the end of and for the preceding year, certified
by independent public accountants and (ii) to mail and make generally available
as soon as practicable after the end of each quarterly period (except for the
last quarterly period of each fiscal year) to such holders, a consolidated
balance sheet, a consolidated statement of operations and a consolidated
statement of cash flows (and similar financial reports of all unconsolidated
subsidiaries, if any) as of the end of and for such period, and for the period
from the beginning of such year to the close of such quarterly period, together
with comparable information for the corresponding periods of the preceding
year.
(i) So long as the Securities are outstanding, to furnish to you as
soon as available copies of all reports or other communications furnished to
its security holders or furnished to or filed with the Commission or any
national securities exchange on which any class of securities of the Company or
any of its subsidiaries is listed and such other publicly
5
available information concerning the Company and its subsidiaries as you may
reasonably request.
(j) Whether or not the transactions contemplated in this Agreement are
consummated or this Agreement is terminated, to pay or cause to be paid all
expenses incident to the performance of its obligations under this Agreement,
including: (i) the reasonable fees and the disbursements and expenses of the
Company's counsel and the Company's accountants in connection with the
registration and delivery of the Securities under the Act and all other fees
and expenses in connection with the preparation, printing, filing and
distribution of the Registration Statement (including financial statements and
exhibits), any preliminary prospectus, the Prospectus and all amendments and
supplements to any of the foregoing, including the mailing and delivering of
copies thereof to the Underwriters and dealers in the quantities specified
herein, (ii) all costs and expenses related to the transfer and delivery of the
Securities to the Underwriter, including any transfer or other taxes payable
thereon, (iii) all costs of printing or producing this Agreement and any other
agreements or documents in connection with the offering, purchase, sale or
delivery of the Securities, (iv) all expenses in connection with the
registration or qualification of the Securities for offer and sale under the
securities or Blue Sky laws of the several states and all costs of printing or
producing any Preliminary and Supplemental Blue Sky Memoranda in connection
therewith (including the filing fees and fees and disbursements of counsel for
the Underwriter in connection with such registration or qualification and
memoranda relating thereto), (v) the filing fees and disbursements of counsel
for the Underwriter in connection with the review and clearance of the offering
of the Securities by the NASD, (vi) all fees and expenses in connection with
the registration of the Securities under the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), (vii) the cost of printing certificates
representing the Securities, (viii) the costs and charges of any transfer
agent, registrar and/or depositary (including DTC), (ix) any fees charged by
rating agencies for the rating of the Securities, (x) the fees and expenses of
the Trustee and the Trustee's counsel in connection with the Indenture and the
Securities, (xi) the fees and expenses of the QIU (including the fees and
disbursements of counsel to the QIU), and (xii) all other costs and expenses
incident to the performance of the obligations of the Company hereunder for
which provision is not otherwise made in this Section.
(k) To use its best efforts to list, subject to notice of issuance,
the Common Stock on the New York Stock Exchange (the "NYSE") and to maintain
the listing of the Common Stock on the NYSE for so long as the Securities are
outstanding.
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(l) During the period beginning on the date hereof and continuing to
and including the Closing Date, not to offer, sell, contract to sell or
otherwise transfer or dispose of any debt securities of the Company or any
warrants, rights or options to purchase or otherwise acquire debt securities of
the Company substantially similar to the Securities (other than (i) the
Securities and (ii) commercial paper issued in the ordinary course of
business), without the prior written consent of DLJ.
(m) Not to voluntarily claim, and to actively resist any attempts to
claim, the benefit of any usury laws against the holders of the Securities.
(n) To use its best efforts to do and perform all things required or
necessary to be done and performed under this Agreement by the Company on or
prior to the Closing Date and to satisfy all conditions precedent to the
delivery of the Securities.
(o) If the Registration Statement at the time of the effectiveness of
this Agreement does not cover all of the Securities, to file a Rule 462(b)
Registration Statement with the Commission registering the Securities not so
covered in compliance with Rule 462(b) by 10:00 P.M., New York City time, on
the date of this Agreement and to pay to the Commission the filing fee for such
Rule 462(b) Registration Statement at the time of the filing thereof or to give
irrevocable instructions for the payment of such fee pursuant to Rule 111(b)
under the Act.
(p) That it will, for so long as any of the Securities are outstanding
and if, in the reasonable judgment of the Underwriter (after consultation with
counsel), the Underwriter or any of its affiliates (as defined in the Act) is
required by the Act to deliver a prospectus in connection with sales of
Securities, (i) periodically amend the Registration Statement so that the
information contained in the Registration Statement complies with the
requirements of Section 10(a) of the Act, (ii) amend the Registration Statement
or amend or supplement the Prospectus when necessary to reflect any material
changes in the information provided therein and promptly file such amendment or
supplement with the Commission, (iii) provide the Underwriter with copies of
each amendment or supplement so filed and such other documents, including
opinions of counsel and "comfort" letters, as the Underwriter may reasonably
request and (iv) indemnify the Underwriter and if applicable, contribute to any
amount paid or payable by the Underwriter in a manner substantially similar to
that specified in Section 7 hereof (with appropriate modifications).
(q) That it will, on or as soon as practicable following the Closing
Date, apply the proceeds of the offerings contemplated by this Agreement and
the Equity Underwriting Agreement as set forth in the Prospectus under the
caption "Use of Proceeds".
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SECTION 6. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
represents and warrants to the Underwriter that:
(a) The Registration Statement has become effective (other than any
Rule 462(b) Registration Statement to be filed by the Company after the
effectiveness of this Agreement); any Rule 462(b) Registration Statement filed
after the effectiveness of this Agreement will become effective no later than
10:00 P.M., New York City time, on the date of this Agreement; and no stop
order suspending the effectiveness of the Registration Statement is in effect,
and no proceedings for such purpose are pending before or threatened by the
Commission.
(b) (i) The Registration Statement (other than any Rule 462(b)
Registration Statement to be filed by the Company after the effectiveness of
this Agreement), when it became effective, did not contain and, as amended, if
applicable, 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, (ii) the Registration Statement (other than
any Rule 462(b) Registration Statement to be filed by the Company after the
effectiveness of this Agreement) and the Prospectus comply and, as amended or
supplemented, if applicable, will comply in all material respects with the Act,
(iii) if the Company is required to file a Rule 462(b) Registration Statement
after the effectiveness of this Agreement, such Rule 462(b) Registration
Statement and any amendments thereto, when they become effective (A) 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 and (B) will comply in all material respects with the Act and
(iv) the Prospectus does not contain and, as amended or supplemented, if
applicable, will not contain any untrue statement of a material fact or omit to
state a material fact necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading, except that the
representations and warranties set forth in this paragraph do not apply to
statements or omissions in the Registration Statement or the Prospectus based
upon information relating to the Underwriter furnished to the Company in
writing by the Underwriter expressly for use therein.
(c) Each preliminary prospectus filed as part of the registration
statement as originally filed or as part of any amendment thereto, or filed
pursuant to Rule 424 under the Act, complied when so filed in all material
respects with the Act, and did not contain an untrue statement of a material
fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, except that the representations and
warranties set forth in this paragraph do not apply to statements or omissions
in any
8
preliminary prospectus based upon information relating to the Underwriter
furnished to the Company in writing by the Underwriter expressly for use
therein.
(d) Each of the Company and its subsidiaries has been duly organized
and is validly existing and in good standing under the laws of its jurisdiction
of incorporation or formation, as the case may be, and has the corporate or
partnership, as the case may be, power and authority to carry on its business
as described in the Prospectus and to own, lease and operate its properties,
and each of the Company and the subsidiaries that are corporations is duly
qualified and is in good standing as a foreign corporation, authorized to do
business in each jurisdiction in which the nature of its business or its
ownership or leasing of property requires such qualification, except where the
failure to be so qualified would not have a material adverse effect on the
business, prospects, financial condition or results of operations of the
Company and its subsidiaries, taken as a whole (a "Material Adverse Effect").
The Company has no subsidiaries except as listed on Exhibit 21 to the
Registration Statement.
(e) All the outstanding shares of capital stock of the Company have
been duly authorized and validly issued and are fully paid, non-assessable and
not subject to any preemptive or similar rights.
(f) All of the outstanding shares of capital stock of each of the
Company's subsidiaries have been duly authorized and validly issued and are
fully paid and non-assessable, and are owned by the Company, directly or
indirectly through one or more subsidiaries, free and clear of any security
interest, claim, lien, encumbrance or adverse interest of any nature (each, a
"Lien") except as set forth in the Prospectus. The Company, through its direct
wholly-owned subsidiary Daboco, and Daboco's direct wholly-owned subsidiary
DRII, owns all of the partnership interests in DR, free and clear of any Lien
except as set forth in the Prospectus.
(g) The Indenture has been duly qualified under the Trust Indenture
Act of 1939, as amended (the "Trust Indenture Act"), and has been duly
authorized, executed and delivered by the Issuers, and is a valid and binding
agreement of the Issuers, enforceable in accordance with its terms except as
(A) the enforceability thereof may be limited by bankruptcy, insolvency or
similar laws affecting creditors' rights generally and (B) rights of
acceleration and the availability of equitable remedies may be limited by
equitable principles of general applicability.
9
(h) (i) The Securities have been duly authorized and, on the Closing
Date, will have been validly executed and delivered by the Company. When the
Securities have been executed and authenticated in accordance with the
provisions of the Indenture and delivered to and paid for by the Underwriter in
accordance with the terms of this Agreement, the Securities will be entitled to
the benefits of the Indenture and will be valid and binding obligations of the
Company, enforceable in accordance with their terms except as (A) the
enforceability thereof may be limited by bankruptcy, insolvency or similar laws
affecting creditors' rights generally and (B) rights of acceleration and the
availability of equitable remedies may be limited by equitable principles of
general applicability.
(ii) The Guarantees have been duly authorized and, on the Closing
Date, will have been validly executed and delivered by DRII and DR (the
"Guarantors") and, when the Securities have been executed and authenticated in
accordance with the provisions of the Indenture and delivered to and paid for
by the Underwriter in accordance with the terms of this Agreement and the
Guarantees executed and delivered, the Guarantees will be valid and binding
obligations of each of the Guarantors, enforceable against each Guarantor in
accordance with their terms except as (A) the enforceability thereof may be
limited by bankruptcy, insolvency or similar laws affecting creditors' rights
generally and (B) rights of acceleration and the availability of equitable
remedies may be limited by equitable principles of general applicability.
(i) The Securities conform as to legal matters to the description
thereof contained in the Prospectus in all material respects.
(j) Neither the Company nor any of its subsidiaries is in violation of
its respective charter, by-laws or partnership agreement, or, except as could
not reasonably be expected to have a Material Adverse Effect, is in default in
the performance of any obligation, agreement, covenant or condition contained
in any indenture, loan agreement, mortgage, lease or other agreement or
instrument that is material to the Company and its subsidiaries, taken as a
whole, to which the Company or any of its subsidiaries is a party or by which
the Company or any of its subsidiaries or any of their respective property is
bound.
(k) The execution, delivery and performance of this Agreement, the
Indenture, the Securities and the Guarantees by the Issuers, the compliance by
the Issuers with all the provisions hereof and thereof and the consummation of
the transactions contemplated hereby (including application of the proceeds of
the offerings contemplated by this Agreement and the Equity Underwriting
Agreement as set forth in the Prospectus under
10
the caption "Use of Proceeds") and thereby will not (i) require any consent,
approval, authorization or other order of, or qualification with, any court or
governmental body or agency (except such as may be required from the NASD under
the securities or Blue Sky laws of the various states), (ii) conflict with,
constitute a breach of, default under or accelerate the rights of any person or
entity under, any provision of the charter, by-laws or partnership agreement of
the Company or any of its subsidiaries or, except as could not reasonably be
expected to have a Material Adverse Effect or materially adversely effect the
ability of the Company and its subsidiaries to consummate the transactions
contemplated hereby, any indenture, loan agreement, mortgage, lease or other
agreement or instrument that is material to the Company and its subsidiaries to
which the Company or any of its subsidiaries is a party or by which the Company
or any of its subsidiaries or any of their respective property is bound, (iii)
violate or conflict with any applicable law or any rule, regulation, judgment,
order or decree of any court or any governmental body or agency having
jurisdiction over the Company, any of its subsidiaries or any of their
respective property except as could not reasonably be expected to have a
Material Adverse Effect or materially adversely effect the ability of the
Company and its subsidiaries to consummate the transactions contemplated
hereby, (iv) result in the imposition or creation of (or the obligation to
create or impose) a Lien under any agreement or instrument to which the Company
or any of its subsidiaries is a party or by which the Company or any of its
subsidiaries or any of their respective property is bound or (v) result in the
suspension, termination or revocation of any Authorization (as defined below)
of the Company or any of its subsidiaries or any other impairment of the rights
of the holder of any such Authorization except as could not reasonably be
expected to have a Material Adverse Effect or materially adversely effect the
ability of the Company and its subsidiaries to consummate the transactions
contemplated hereby.
(l) There are no legal or governmental proceedings pending or, to the
knowledge of the Company, threatened to which the Company or any of its
subsidiaries is or is reasonably likely to be a party or to which any of their
respective property is or is reasonably likely to be subject that are required
to be described in the Registration Statement or the Prospectus and are not so
described; nor are there any statutes, regulations, contracts or other
documents that are required to be described in the Registration Statement or
the Prospectus or to be filed as exhibits to the Registration Statement that
are not so described or filed as required.
(m) Neither the Company nor any of its subsidiaries has violated any
foreign, federal, state or local law or regulation relating to the protection
of human health and safety, the environment or hazardous or toxic substances or
wastes, pollutants or contaminants ("Environmental Laws"), any provisions of
the Employee Retirement Income
11
Security Act of 1974, as amended, or any provisions of the Foreign Corrupt
Practices Act or the rules and regulations promulgated thereunder, except for
such violations which, singly or in the aggregate, could not reasonably be
expected to have a Material Adverse Effect. There are no costs or liabilities
associated with Environmental Laws (including, without limitation, any capital
or operating expenditures required for clean-up, closure of properties or
compliance with Environmental Laws or any Authorization, any related
constraints on operating activities and any potential liabilities to third
parties) which could, singly or in the aggregate, reasonably be expected to
have a Material Adverse Effect.
(n) Each of the Company and its subsidiaries has such permits,
licenses, consents, exemptions, franchises, authorizations and other approvals
(each, an "Authorization") of, and has made all filings with and notices to,
all governmental or regulatory authorities and self-regulatory organizations
and all courts and other tribunals, including, without limitation, under any
applicable Environmental Laws, as are necessary to own, lease, license and
operate its respective properties and to conduct its business, except where the
failure to have any such Authorization or to make any such filing or notice
could not, singly or in the aggregate, reasonably be expected to have a
Material Adverse Effect. Each such Authorization is valid and in full force and
effect and each of the Company and its subsidiaries is in compliance with all
the terms and conditions thereof and with the rules and regulations of the
authorities and governing bodies having jurisdiction with respect thereto; and
no event has occurred (including, without limitation, the receipt of any notice
from any authority or governing body) which allows or, after notice or lapse of
time or both, would allow, revocation, suspension or termination of any such
Authorization or results or, after notice or lapse of time or both, would
result in any other impairment of the rights of the holder of any such
Authorization; and such Authorizations contain no restrictions that are
unreasonably burdensome to the Company or any of its subsidiaries; except where
such failure to be valid and in full force and effect or to be in compliance,
the occurrence of any such event or the presence of any such restriction could
not, singly or in the aggregate, reasonably be expected to have a Material
Adverse Effect.
(o) The consolidated financial statements included in the Registration
Statement and the Prospectus (and any amendment or supplement thereto),
together with related schedules and notes, present fairly the consolidated
financial position, results of operations and changes in financial position of
the Company and its subsidiaries on the basis stated therein at the respective
dates or for the respective periods to which they apply; such statements and
related schedules and notes have been prepared in accordance with generally
accepted accounting principles consistently applied throughout the periods
involved, except as disclosed therein; the supporting schedules, if any,
included in the Registration Statement present fairly in accordance with
generally accepted accounting
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principles the information required to be stated therein; and the other
financial and statistical information and data set forth in the Registration
Statement and the Prospectus (and any amendment or supplement thereto) are, in
all material respects, accurately presented and prepared on a basis consistent
with such financial statements and the books and records of the Company. The
pro forma financial information and data, and the related notes thereto, set
forth in the Registration Statement and the Prospectus (and any supplement or
amendment thereto) are, in all material respects, accurately presented and are
prepared on a basis consistent with the historical financial statements of the
Company and its subsidiaries.
(p) Price Waterhouse LLP are independent public accountants with
respect to the Company and its subsidiaries as required by the Act.
(q) No relationship, direct or indirect, exists between or among the
Company or any of its subsidiaries on the one hand, and the directors,
officers, stockholders, customers or suppliers of the Company or any of its
subsidiaries on the other hand, which is required by the Act to be described in
the Registration Statement or the Prospectus which is not so described.
(r) The Company is not and, after giving effect to the offering and
sale of the Securities and the application of the proceeds thereof as described
in the Prospectus, will not be, an "investment company" as such term is defined
in the Investment Company Act of 1940, as amended.
(s) There are no contracts, agreements or understandings between the
Company and any person granting such person the right to require the Company to
file a registration statement under the Act with respect to any securities of
the Company or to require the Company to include such securities with the
Securities registered pursuant to the Registration Statement.
(t) All indebtedness of the Company and its subsidiaries that will be
repaid with the proceeds of the issuance and sale of the Securities was
incurred, and the indebtedness represented by the Securities is being incurred,
for proper purposes and in good faith and the Company and each of its
subsidiaries was, at the time of the incurrence of such indebtedness that will
be repaid with the proceeds of the issuance and sale of the Securities, and
will be on the Closing Date (after giving effect to the application of the
proceeds from the issuance of the Securities) solvent, and had at the time of
the incurrence of such indebtedness that will be repaid with the proceeds of
the issuance and sale of the Securities and will have on the Closing Date
(after giving effect to the
13
application of the proceeds from the issuance of the Securities) sufficient
capital for carrying on its business and was, at the time of the incurrence of
such indebtedness that will be repaid with the proceeds of the issuance and
sale of the Securities, and will be on the Closing Date (after giving effect to
the application of the proceeds from the issuance of the Securities) able to
pay its debts as they mature.
(u) Since the respective dates as of which information is given in the
Prospectus other than as set forth in the Prospectus (exclusive of any
amendments or supplements thereto subsequent to the date of this Agreement),
(i) there has not occurred any material adverse change or any development
involving a prospective material adverse change in the condition, financial or
otherwise, or the earnings, business, management or operations of the Company
and its subsidiaries, taken as a whole, (ii) there has not been any material
adverse change or any development involving a prospective material adverse
change in the capital stock or in the long-term debt of the Company or any of
its subsidiaries and (iii) neither the Company nor any of its subsidiaries has
incurred any material liability or obligation, direct or contingent.
(v) The Company and its subsidiaries have good and marketable title in
fee simple to all real property and good and marketable title to all personal
property owned by them which is material to the business of the Company and its
subsidiaries, in each case free and clear of all liens, encumbrances and
defects except such as are described in the Prospectus or such as do not
materially interfere with the use made and proposed to be made of such property
by the Company or its subsidiaries, as applicable; and any real property and
buildings held under lease by the Company and its subsidiaries are held by them
under valid, subsisting and enforceable leases with such exceptions as are not
material and do not interfere with the use made and proposed to be made of such
property and buildings by the Company and its subsidiaries, in each case,
except as described in the Prospectus.
(w) The Company and its subsidiaries own or possess, or can acquire on
reasonable terms, all trademarks, service marks, trade names, copyrights,
know-how (including trade secrets and other unpatented and/or unpatentable
proprietary or confidential information, systems or procedures), patents,
patent rights, licenses and inventions (collectively, "intellectual property")
currently employed by them in connection with the business now operated by them
except where the failure to own or possess or otherwise be able to acquire such
intellectual property could not reasonably be expected to, singly or in the
aggregate, have a Material Adverse Effect; and neither the Company nor any of
its subsidiaries has received any notice of infringement of or conflict with
asserted rights of others with respect to any of such intellectual property
which, singly or
14
in the aggregate, if the subject of an unfavorable decision, ruling or finding,
could reasonably be expected to have a Material Adverse Effect.
(x) There is no (i) significant unfair labor practice complaint,
grievance or arbitration proceeding pending or, to the knowledge of the
Company, threatened against the Company or any of its subsidiaries before the
National Labor Relations Board or any state or local labor relations board or
(ii) strike, labor dispute, slowdown or stoppage pending or, to the knowledge
of the Company, threatened against the Company or any of its subsidiaries or,
except for such actions specified in clause (i) or (ii) above, which, singly or
in the aggregate, could not reasonably be expected to have a Material Adverse
Effect.
(y) All material tax returns required to be filed by the Company and
each of its subsidiaries in any jurisdiction have been filed, other than those
filings being contested in good faith, and all material taxes, including
withholding taxes, penalties and interest, assessments, fees and other charges
due pursuant to such returns or pursuant to any assessment received by the
Company or any of its subsidiaries have been paid, other than those being
contested in good faith and for which adequate reserves have been provided.
(z) The Company and each of its subsidiaries are insured by insurers
of recognized financial responsibility against such losses and risks and in
such amounts as are prudent and customary in the businesses in which they are
engaged; and neither the Company nor any of its subsidiaries (i) has received
notice from any insurer or agent of such insurer that substantial capital
improvements or other material expenditures will have to be made in order to
continue such insurance or (ii) has any reason to believe that it will not be
able to renew its existing insurance coverage as and when such coverage expires
or to obtain similar coverage from similar insurers at a cost that could not
reasonably be expected to have a Material Adverse Effect.
(aa) The Company and each of its subsidiaries maintains a system of
internal accounting controls sufficient to provide reasonable assurance that
(i) transactions are executed in accordance with management's general or
specific authorizations; (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principles and to maintain asset accountability; (iii) access to
assets is permitted only in accordance with management's general or specific
authorization; and (iv) the recorded accountability for assets is compared with
the existing assets at reasonable intervals and appropriate action is taken
with respect to any differences.
15
(bb) The Issuers have complied with all provisions of Section 517.075,
Florida Statutes (Chapter 92-198, Laws of Florida), or are and at all relevant
times have been duly exempt from complying therewith.
(cc) No "nationally recognized statistical rating organization" as
such term is defined for purposes of Rule 436(g)(2) under the Act has indicated
to the Company or any of its subsidiaries that it is considering (i) the
downgrading, suspension or withdrawal of, or any review for a possible change
that does not indicate the direction of the possible change in, any rating
assigned to the Company or any of its subsidiaries or any securities of the
Company or any of its subsidiaries or (ii) any adverse change in the outlook
for any rating of the Company or any of its subsidiaries or any securities of
the Company or any of its subsidiaries.
(dd) This Agreement and the Equity Underwriting Agreement have each
been duly authorized, executed and delivered by the Company and its
subsidiaries.
(ee) Each certificate signed by any officer of the Company and
delivered to the Underwriter or counsel for the Underwriter shall be deemed to
be a representation and warranty by the Company to the Underwriter as to the
matters covered thereby.
SECTION 7. INDEMNIFICATION. (a) The Issuers hereby jointly and
severally agree to indemnify and hold harmless the Underwriter, its directors,
its officers and each person, if any, who controls the Underwriter within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act, from and
against any and all losses, claims, damages, liabilities and judgments
(including, without limitation, any legal or other expenses incurred in
connection with investigating or defending any matter, including any action,
that could give rise to any such losses, claims, damages, liabilities or
judgments) caused by any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement (or any amendment
thereto), the Prospectus (or any amendment or supplement thereto) or any
preliminary prospectus, or caused by any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, except insofar as such losses, claims,
damages, liabilities or judgments are caused by any such untrue statement or
omission or alleged untrue statement or omission based upon information
relating to the Underwriter furnished in writing to the Company by the
Underwriter expressly for use therein.
(b) The Underwriter agrees to indemnify and hold harmless the Company,
its directors, its officers who sign the Registration Statement and each
person, if any, who controls the Company within the meaning of Section 15 of
the Act or Section 20 of the
16
Exchange Act, to the same extent as the foregoing indemnity from the Company to
the Underwriter but only with reference to information relating to the
Underwriter furnished in writing to the Company by the Underwriter expressly
for use in the Registration Statement (or any amendment thereto), the
Prospectus (or any amendment or supplement thereto) or any preliminary
prospectus.
(c) In case any action shall be commenced involving any person in
respect of which indemnity may be sought pursuant to Section 7(a) or 7(b) above
(the "indemnified party"), the indemnified party shall promptly notify the
person against whom such indemnity may be sought (the "indemnifying party") in
writing and the indemnifying party shall assume the defense of such action,
including the employment of counsel reasonably satisfactory to the indemnified
party and the payment of all reasonable fees and expenses of such counsel, as
incurred (except that in the case of any action in respect of which indemnity
may be sought pursuant to both Sections 7(a) and 7(b), the Underwriter shall
not be required to assume the defense of such action pursuant to this Section
7(c), but may employ separate counsel and participate in the defense thereof,
but the fees and expenses of such counsel, except as provided below, shall be
at the expense of the Underwriter). Any indemnified party shall have the right
to employ separate counsel in any such action and participate in the defense
thereof, but the fees and expenses of such counsel shall be at the expense of
the indemnified party unless (i) the employment of such counsel shall have been
specifically authorized in writing by the indemnifying party, (ii) the
indemnifying party shall have failed to assume the defense of such action or
employ counsel reasonably satisfactory to the indemnified party or (iii) the
named parties to any such action (including any impleaded parties) include both
the indemnified party and the indemnifying party, and the indemnified party
shall have been advised by such counsel that there may be one or more legal
defenses available to it which are different from or additional to those
available to the indemnifying party (in which case the indemnifying party shall
not have the right to assume the defense of such action on behalf of the
indemnified party). In any such case, the indemnifying party shall not, in
connection with any one action or separate but substantially similar or related
actions in the same jurisdiction arising out of the same general allegations or
circumstances, be liable for the fees and expenses of more than one separate
firm of attorneys (in addition to any local counsel) for all indemnified
parties and all such fees and expenses shall be reimbursed as they are
incurred. Such firm shall be designated in writing by DLJ, in the case of
parties indemnified pursuant to Section 7(a) above, and by the Company, in the
case of parties indemnified pursuant to Section 7(b) above. The indemnifying
party shall indemnify and hold harmless the indemnified party from and against
any and all losses, claims, damages, liabilities and judgments by reason of any
settlement of any action (i) effected with its written consent or (ii) effected
without its written consent if the settlement is entered into
17
more than thirty business days after the indemnifying party shall have received
a request from the indemnified party for reimbursement for the fees and
expenses of counsel (in any case where such fees and expenses are at the
expense of the indemnifying party) and, prior to the date of such settlement,
the indemnifying party shall have failed to comply with such reimbursement
request (or shall have failed to contest, in good faith, all portions of such
fees and expenses not so reimbursed). No indemnifying party shall, without the
prior written consent of the indemnified party, effect any settlement or
compromise of, or consent to the entry of judgment with respect to, any pending
or threatened action in respect of which the indemnified party is or could have
been a party and indemnity or contribution may be or could have been sought
hereunder by the indemnified party, unless such settlement, compromise or
judgment (i) includes an unconditional release of the indemnified party from
all liability on claims that are or could have been the subject matter of such
action and (ii) does not include a statement as to or an admission of fault,
culpability or a failure to act, by or on behalf of the indemnified party.
(d) To the extent the indemnification provided for in this Section 7
is unavailable to an indemnified party or insufficient in respect of any
losses, claims, damages, liabilities or judgments referred to therein, then
each indemnifying party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages, liabilities and judgments (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Company on the one hand and the Underwriter on the other hand from the offering
of the Securities or (ii) if the allocation provided by clause 7(d)(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 7(d)(i) above but
also the relative fault of the Company on the one hand and the Underwriter on
the other hand in connection with the statements or omissions which resulted in
such losses, claims, damages, liabilities or judgments, as well as any other
relevant equitable considerations. The relative benefits received by the
Company on the one hand and the Underwriter on the other hand shall be deemed
to be in the same proportion as the total net proceeds from the Offering (after
deducting underwriting discounts and commissions, but before deducting
expenses) received by the Company, and the total underwriting discounts and
commissions received by the Underwriter, bear to the total price to the public
of the Securities, in each case as set forth in the table on the cover page of
the Prospectus. The relative fault of the Company on the one hand and the
Underwriter on the other hand 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 relates to
information supplied by
18
the Company or the Underwriter and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission.
The Company and the Underwriter agree that it would not be just and
equitable if contribution pursuant to this Section 7(d) were determined by pro
rata allocation or by any other method of allocation which does not take
account of the equitable considerations referred to in the immediately
preceding paragraph. The amount paid or payable by an indemnified party as a
result of the losses, claims, damages, liabilities or judgments referred to in
the immediately preceding paragraph shall be deemed to include, subject to the
limitations set forth above, any legal or other expenses incurred by such
indemnified party in connection with investigating or defending any matter,
including any action, that could have given rise to such losses, claims,
damages, liabilities or judgments. Notwithstanding the provisions of this
Section 7, the Underwriter shall not be required to contribute any amount in
excess of the amount by which the total price at which the Securities
underwritten by it and distributed to the public were offered to the public
exceeds the amount of any damages which the Underwriter has otherwise been
required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.
(e) The remedies provided for in this Section 7 are not exclusive and
shall not limit any rights or remedies which may otherwise be available to any
indemnified party at law or in equity.
SECTION 8. INDEMNIFICATION OF QIU. (a) The Issuers hereby jointly and
severally agree to indemnify and hold harmless the QIU, its directors, its
officers and each person, if any, who controls the QIU within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act, from and against any
and all losses, claims, damages, liabilities and judgments (including, without
limitation, any legal or other expenses incurred in connection with
investigating or defending any matter, including any action, that could give
rise to any such losses, claims, damages, liabilities or judgments) related to,
based upon or arising out of (i) any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement (or any
amendment thereto), the Prospectus (or any amendment or supplement thereto) or
any preliminary prospectus, or any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading or (ii) the QIU's activities as QIU under its
engagement pursuant to Section 2 hereof, except in the case of this clause (ii)
insofar as any such losses, claims, damages, liabilities or judgments are found
in a final
19
judgment by a court of competent jurisdiction, not subject to further appeal,
to have resulted solely from the willful misconduct or gross negligence of the
QIU.
(b) In case any action shall be commenced involving any person in
respect of which indemnity may be sought pursuant to Section 8(a) above (the
"QIU Indemnified Party"), the QIU Indemnified Party shall promptly notify the
person against whom such indemnity may be sought (the "QIU Indemnifying Party")
in writing and the QIU Indemnifying Party shall assume the defense of such
action, including the employment of counsel reasonably satisfactory to the QIU
Indemnified Party (which counsel shall not, except with the written consent of
the QIU Indemnified Party, be counsel to the QIU Indemnifying Party) and the
payment of all reasonable fees and expenses of such counsel, as incurred. Any
QIU Indemnified Party shall have the right to employ separate counsel in any
such action and participate in the defense thereof, but the fees and expenses
of such counsel shall be at the expense of the QIU Indemnified Party unless (i)
the employment of such counsel shall have been specifically authorized in
writing by the QIU Indemnifying Party, (ii) the QIU Indemnifying Party shall
have failed to assume the defense of such action or employ counsel reasonably
satisfactory to the QIU Indemnified Party or (iii) the named parties to any
such action (including any impleaded parties) include both the QIU Indemnified
Party and the QIU Indemnifying Party, and the QIU Indemnified Party shall have
been advised by such counsel that there may be one or more legal defenses
available to it which are different from or additional to those available to
the QIU Indemnifying Party (in which case the QIU Indemnifying Party shall not
have the right to assume the defense of such action on behalf of the QIU
Indemnified Party). In any such case, the QIU Indemnifying Party shall not, in
connection with any one action or separate but substantially similar or related
actions in the same jurisdiction arising out of the same general allegations or
circumstances, be liable for the fees and expenses of more than one separate
firm of attorneys (in addition to any local counsel) for all QIU Indemnified
Parties, which firm shall be designated by the QIU, and all such fees and
expenses shall be reimbursed as they are incurred. The QIU Indemnifying Parties
shall indemnify and hold harmless the QIU Indemnified Party from and against
any and all losses, claims, damages, liabilities and judgments by reason of any
settlement of any action (i) effected with its written consent or (ii) effected
without its written consent if the settlement is entered into more than thirty
business days after the QIU Indemnifying Party shall have received a request
from the QIU Indemnified Party for reimbursement for the fees and expenses of
counsel (in any case where such fees and expenses are at the expense of the QIU
Indemnifying Party) and, prior to the date of such settlement, the Company
shall have failed to comply with such reimbursement request (or shall have
failed to contest, in good faith, all portions of such fees and expenses not so
reimbursed). The QIU Indemnifying Party shall not, without the prior written
consent of the QIU Indemnified
20
Party, effect any settlement or compromise of, or consent to the entry of
judgment with respect to, any pending or threatened action in respect of which
the QIU Indemnified Party is or could have been a party and indemnity or
contribution may be or could have been sought hereunder by the QIU Indemnified
Party, unless such settlement, compromise or judgment (i) includes an
unconditional release of the QIU Indemnified Party from all liability on claims
that are or could have been the subject matter of such action and (ii) does not
include a statement as to or an admission of fault, culpability or a failure to
act, by or on behalf of the QIU Indemnified Party.
(c) To the extent the indemnification provided for in this Section 8
is unavailable to a QIU Indemnified Party or insufficient in respect of any
losses, claims, damages, liabilities or judgments referred to therein, then the
QIU Indemnifying Party, in lieu of indemnifying such QIU Indemnified Party,
shall contribute to the amount paid or payable by such QIU Indemnified Party as
a result of such losses, claims, damages, liabilities and judgments (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Company on the one hand and the QIU on the other hand from the offering of the
Securities or (ii) if the allocation provided by clause 8(c)(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 8(c)(i) above but also the
relative fault of the Company on the one hand and the QIU on the other hand in
connection with the statements or omissions which resulted in such losses,
claims, damages, liabilities or judgments, as well as any other relevant
equitable considerations. The relative benefits received by the Company on the
one hand and the QIU on the other hand shall be deemed to be in the same
proportion as the total net proceeds from the offering (before deducting
expenses) received by the Company as set forth in the table on the cover page
of the Prospectus, and the fee received by the QIU pursuant to Section 2
hereof, bear to the sum of such total net proceeds and such fee. The relative
fault of the Company on the one hand and the QIU on the other hand 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 relates to information supplied by the Company or the QIU
and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission and whether the
QIU's activities as QIU under its engagement pursuant to Section 2 hereof
involved any willful misconduct or gross negligence on the part of the QIU.
The Company and the QIU agree that it would not be just and equitable
if contribution pursuant to this Section 8(c) were determined by pro rata
allocation or by any other method of allocation which does not take account of
the equitable considerations referred to in the immediately preceding
paragraph. The amount paid or payable by a
21
QIU Indemnified Party as a result of the losses, claims, damages, liabilities
or judgments referred to in the immediately preceding paragraph shall be deemed
to include, subject to the limitations set forth above, any legal or other
expenses incurred by such QIU Indemnified Party in connection with
investigating or defending any matter, including any action, that could have
given rise to such losses, claims, damages, liabilities or judgments. 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.
(d) The remedies provided for in this Section 8 are not exclusive and
shall not limit any rights or remedies which may otherwise be available to any
QIU Indemnified Party at law or in equity.
SECTION 9. CONDITIONS OF UNDERWRITER'S OBLIGATIONS. The obligation of
the Underwriter to purchase the Securities under this Agreement is subject to
the satisfaction of each of the following conditions:
(a) All the representations and warranties of the Company contained in
this Agreement shall be true and correct on the Closing Date with the same
force and effect as if made on and as of the Closing Date.
(b) If the Company is required to file a Rule 462(b) Registration
Statement after the effectiveness of this Agreement, such Rule 462(b)
Registration Statement shall have become effective by 10:00 P.M., New York City
time, on the date of this Agreement; and no stop order suspending the
effectiveness of the Registration Statement shall have been issued and no
proceedings for that purpose shall have been commenced or shall be pending
before or, to the knowledge of the Company, contemplated by the Commission.
(c) On or after the date hereof, (i) there shall not have occurred any
downgrading, suspension or withdrawal of, nor shall any notice have been given
of any potential or intended downgrading, suspension or withdrawal of, or of
any review (or of any potential or intended review) for a possible change that
does not indicate the direction of the possible change in, any rating of the
Company or any of its subsidiaries or any securities of the Company or any of
its subsidiaries (including, without limitation, the placing of any of the
foregoing ratings on credit watch with negative or developing implications or
under review with an uncertain direction) by any "nationally recognized
statistical rating organization" as such term is defined for purposes of Rule
436(g)(2) under the Act, (ii) there shall not have occurred any change, nor
shall any notice have been given of any potential or intended change, in the
outlook for any rating of the Company or any of its
22
subsidiaries or any securities of the Company or any of its subsidiaries by any
such rating organization and (iii) no such rating organization shall have given
notice that it has assigned (or is considering assigning) a lower rating to the
Securities than that on which the Securities were marketed.
(d) You shall have received on the Closing Date a certificate dated
the Closing Date, signed by Xxxxxxx X. Xxxx and Xxxxxxx Xxxxxxx, in their
capacities as the President and Chief Executive Officer and Senior Vice
President and Chief Financial Officer, respectively, of the Company, confirming
the matters set forth in Sections 6(u), 9(a), 9(b) and 9(c) and that the
Company has complied with all of the agreements and satisfied all of the
conditions herein contained and required to be complied with or satisfied by
the Company on or prior to the Closing Date.
(e) Since the respective dates as of which information is given in the
Prospectus other than as set forth in the Prospectus (exclusive of any
amendments or supplements thereto subsequent to the date of this Agreement),
(i) there shall not have occurred any change or any development involving a
prospective change in the condition, financial or otherwise, or the earnings,
business, management or operations of the Company and its subsidiaries, taken
as a whole, (ii) there shall not have been any change or any development
involving a prospective change in the capital stock or in the long-term debt of
the Company or any of its subsidiaries and (iii) neither the Company nor any of
its subsidiaries shall have incurred any liability or obligation, direct or
contingent, the effect of which, in any such case described in clause 9(e)(i),
9(e)(ii) or 9(e)(iii), in your judgment, is material and adverse and, in your
judgment, makes it impracticable to market the Securities on the terms and in
the manner contemplated in the Prospectus.
(f) You shall have received on the Closing Date an opinion
(satisfactory to you and counsel for the Underwriter), dated the Closing Date,
of Xxxxxx & Xxxxxxx, counsel for the Company, to the effect that:
(i) each of the Company and DRII has been duly incorporated
and is validly existing as a corporation, and is in good standing
under the laws of the state of Delaware, with corporate power and
authority to own, lease and operate their respective properties and
conduct their business as described in the Prospectus and DR has been
duly formed as a general partnership under the laws of the state of
New York with the partnership power and authority to own, lease and
operate its properties and conduct its business as described in the
Prospectus;
23
(ii) each of the Company and its subsidiaries is duly
qualified and is in good standing as a foreign corporation or
partnership, as the case may be, authorized to do business in each
jurisdiction in which the nature of its business or its ownership or
leasing of property requires such qualification, except where the
failure to be so qualified would not have a Material Adverse Effect;
(iii) all the outstanding shares of capital stock of the
Company have been duly authorized and validly issued and are fully
paid, non-assessable and, to the knowledge of such counsel, have not
been issued in violation of any preemptive rights;
(iv) all of the outstanding shares of capital stock of
each of the Company's subsidiaries have been duly authorized and
validly issued and are fully paid and non-assessable, and are owned by
the Company, directly or indirectly through one or more subsidiaries,
free and clear of any Lien, except as disclosed in the Prospectus; and
all of the partnership interests in DR are owned by the Company, free
and clear of any Lien, except as disclosed in the Prospectus;
(v) the Securities have been duly authorized and, when
executed and authenticated in accordance with the provisions of the
Indenture and delivered to and paid for by the Underwriter in
accordance with the terms of this Agreement, will be entitled to the
benefits of the Indenture and will be valid and binding obligations of
the Company, enforceable in accordance with their terms except as (A)
the enforceability thereof may be limited by bankruptcy, insolvency or
similar laws affecting creditors' rights generally and (B) rights of
acceleration and the availability of equitable remedies may be limited
by equitable principles of general applicability; and the Guarantees
have been duly authorized and, when the Securities have been executed
and authenticated in accordance with the provisions of the Indenture
and delivered to and paid for by the Underwriter in accordance with
the terms of this Agreement and the Guarantees executed and delivered,
the Guarantees will be valid and binding obligations of each of the
Guarantors, enforceable against each Guarantor in accordance with
their terms except as (A) the enforceability thereof may be limited by
bankruptcy, insolvency or similar laws affecting creditors' rights
generally and (B) rights of acceleration and the availability of
equitable remedies may be limited by equitable principles of general
applicability;
(vi) the Indenture has been duly qualified under the
Trust Indenture Act and has been duly authorized, executed and
delivered by each of the Issuers and is
24
a valid and binding agreement of each of the Issuers, enforceable in
accordance with its terms except as (A) the enforceability thereof may
be limited by bankruptcy, insolvency or similar laws affecting
creditors' rights generally and (B) rights of acceleration and the
availability of equitable remedies may be limited by equitable
principles of general applicability;
(vii) this Agreement has been duly authorized, executed
and delivered by each of the Issuers;
(viii) the Registration Statement has become effective
under the Act, and to the knowledge of such counsel no stop order
suspending its effectiveness has been issued under the Act and no
proceedings for that purpose are, to the best of such counsel's
knowledge after due inquiry, pending before the Commission;
(ix) the statements under the captions "Prospectus
Summary-The Offering", "Risk Factors-Risks Associated With Substantial
Indebtedness", "Risk Factors-Subordination", "Risk Factors-Holding
Company Structure", "Risk Factors-Regulatory Matters", "Risk
Factors-Possible Inability to Repurchase New Senior Subordinated Notes
upon Change of Control", "Risk Factors-Fraudulent Transfer
Considerations", "Risk Factors-Enforceability of Subsidiary
Guarantees", "Management's Discussion and Analysis of Financial
Condition and Results of Operations-Tax Benefits From Net Operating
Losses", "Description of New Senior Subordinated Notes" and
"Underwriting" in the Prospectus and Items 14 and 15 of Part II of the
Registration Statement, insofar as such statements constitute a
summary of the legal matters, documents or proceedings referred to
therein, are accurate in all material respects;
(x) neither the Company nor any of its subsidiaries is
in violation of its respective charter, by-laws or partnership
agreement and, to the best of such counsel's knowledge after due
inquiry, neither the Company nor any of its subsidiaries is in default
in the performance of any obligation, agreement, covenant or condition
contained in any indenture, loan agreement, mortgage, lease or other
agreement or instrument that is material to the Company and its
subsidiaries, taken as a whole, to which the Company or any of its
subsidiaries is a party or by which the Company or any of its
subsidiaries or any of their respective property is bound;
(xi) the execution, delivery and performance of this
Agreement, the Indenture, the Securities and the Guarantees by the
Issuers and the consummation of the Refinancing Plan (as such term is
defined in the Prospectus) will not (A)
25
require any consent, approval, authorization or other order of, or
qualification with, any court or governmental body or agency (except
such as has been obtained or as may be required from the NASD or under
the securities or Blue Sky laws of the various states), (B) violate
the charter or by-laws of the Company or any of its subsidiaries or
the partnership agreement of DR or any indenture, loan agreement,
mortgage, lease or other agreement or instrument that is material to
the Company and its subsidiaries, taken as a whole, to which the
Company or any of its subsidiaries is a party or by which the Company
or any of its subsidiaries or any of their respective property is
bound, (C) violate or conflict with any applicable federal or New York
statute, law or any rule, regulation, judgment, order or decree of any
court or any governmental body or agency having jurisdiction over the
Company, any of its subsidiaries or any of their respective property,
or (D) result in the imposition or creation of (or the obligation to
create or impose) a Lien under any agreement or instrument to which
the Company or any of its subsidiaries is a party or by which the
Company or any of its subsidiaries or any of their respective property
is bound;
(xii) such counsel does not know of any legal or
governmental proceedings pending or threatened to which the Company or
any of its subsidiaries is or could be a party or to which any of
their respective property is or could be subject that are required to
be described in the Registration Statement or the Prospectus and are
not so described, or of any statutes, regulations, contracts or other
documents that are required to be described in the Registration
Statement or the Prospectus or to be filed as exhibits to the
Registration Statement that are not so described or filed as required;
(xiii) the Company is not and, after giving effect to the
offering and sale of the Securities and the application of the
proceeds thereof as described in the Prospectus, will not be, an
"investment company" as such term is defined in the Investment Company
Act of 1940, as amended;
(xiv) to the best of such counsel's knowledge after due
inquiry, except as disclosed in the Registration Statement, there are
no contracts, agreements or understandings between the Company and any
person granting such person the right to require the Company to file a
registration statement under the Act with respect to any securities of
the Company or to require the Company to include such securities with
the Securities registered pursuant to the Registration Statement;
26
(xv) the Indenture and the Securities conform to the description
thereof in the Registration Statement;
(xvi) the Company has not taken any action of which such counsel is
aware that might cause this Agreement or the issuance and sale of the
Securities to violate Regulations G, T, U or X of the Board of
Governors of the Federal Reserve System; and
(xvii) the Registration Statement and the Prospectus
comply as to form in all material respects with the requirements for
registration statements on Form S-1 under the Act; it being
understood, however, that such counsel expresses no opinion with
respect to (A) the financial data included in the Registration
Statement or the Prospectus and (B) that part of the Registration
Statement that constitutes the Statement of Eligibility (Form T-1)
under the Trust Indenture Act.
In addition, such counsel has participated in conferences
with officers and other representatives of the Company,
representatives of the independent public accountants for the Company,
and your representatives, at which the contents of the Registration
Statement and Prospectus and related matters were discussed and,
although such counsel is not passing upon, and do not assume any
responsibility for, the accuracy, completeness or fairness of the
statements contained in the Registration Statement or Prospectus and
have not made any independent check or verification thereof, during
the course of such participation, no facts came to such counsel's
attention that caused such counsel to believe that the Registration
Statement, at the time it became effective, contained an untrue
statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading, or that the Prospectus, as of its date and as
of the Closing Date, contained an 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, it being understood that such counsel need not express
any belief with respect to the financial statements or other financial
data included in the Registration Statement or the Prospectus.
The opinion of Xxxxxx & Xxxxxxx described in Section 9(f) above shall
be rendered to you at the request of the Company and shall so state therein.
(g) You shall have received on the Closing Date an opinion, dated the
Closing Date, of Weil, Gotshal & Xxxxxx LLP, counsel for the Underwriter as to
the matters
27
referred to in Sections 9(f)(v), 9(f)(vi), 9(f)(vii), 9(f)(ix) (but only with
respect to the statements under the caption "Description of New Senior
Subordinated Notes" and "Underwriting") and 9(f)(xvii).
In giving such opinions with respect to the matters covered by Section
9(f) and 9(g), respectively, Xxxxxx & Xxxxxxx and Xxxx, Gotshal & Xxxxxx LLP
may state that their opinion and belief are based upon their participation in
the preparation of the Registration Statement and Prospectus and any amendments
or supplements thereto and review and discussion of the contents thereof, but
are without independent check or verification except as specified.
(h) Daboco shall have merged with and into the Company.
(i) You shall have received, on each of the date hereof and the
Closing Date, a letter dated the date hereof or the Closing Date, as the case
may be, in form and substance satisfactory to you, from Price Waterhouse LLP,
independent public accountants, containing the information and statements of
the type ordinarily included in accountants' "comfort letters" to underwriters
with respect to the financial statements and certain financial information
contained in the Registration Statement and the Prospectus.
(j) The Underwriter shall have received a counterpart, conformed as
executed, of the Indenture which shall have been entered into by the Issuers
and the Trustee.
(k) The Company shall not have failed on or prior to the Closing Date
to perform or comply with any of the agreements herein contained and required
to be performed or complied with by the Company on or prior to the Closing
Date.
(l) The closing under the Equity Underwriting Agreement shall have
occurred and the Company shall have (A) issued and sold to the underwriters
referred to in the Equity Underwriting Agreement, and such underwriters shall
have purchased from the Company, the Shares pursuant to the terms of the Equity
Underwriting Agreement, (B) entered into the New Credit Agreement (as defined
in, and on the terms described in, the Prospectus), and (C) to your reasonable
satisfaction, established the defeasance account and made such arrangements
with respect to the repayment of its outstanding indebtedness with the proceeds
of the sale of the Securities and the Shares as described in the Prospectus
under the caption "Use of Proceeds".
28
SECTION 10. EFFECTIVENESS OF AGREEMENT AND TERMINATION. This Agreement
shall become effective upon the execution and delivery of this Agreement by the
parties hereto.
This Agreement may be terminated at any time on or prior to the
Closing Date by you by written notice to the Company if any of the following
has occurred: (i) any outbreak or escalation of hostilities or other national
or international calamity or crisis or change in economic conditions or in the
financial markets of the United States or elsewhere that, in your judgment, is
material and adverse and, in your judgment, makes it impracticable to market
the Securities on the terms and in the manner contemplated in the Prospectus,
(ii) the suspension or material limitation of trading in securities or other
instruments on the NYSE, the American Stock Exchange, the Chicago Board of
Options Exchange, the Chicago Mercantile Exchange, the Chicago Board of Trade
or the Nasdaq National Market or limitation on prices for securities or other
instruments on any such exchange or the Nasdaq National Market, (iii) the
suspension of trading of any securities of the Company on any exchange or in
the over-the-counter market, (iv) the enactment, publication, decree or other
promulgation of any federal or state statute, regulation, rule or order of any
court or other governmental authority which in the judgment of the Underwriter
causes, or will cause a Material Adverse Effect, (v) the declaration of a
banking moratorium by either federal or New York State authorities or (vi) the
taking of any action by any federal, state or local government or agency in
respect of its monetary or fiscal affairs which in your opinion has a material
adverse effect on the financial markets in the United States.
SECTION 11. MISCELLANEOUS. Notices given pursuant to any provision of
this Agreement shall be addressed as follows: (i) if to the Company, to Xxxxx
Xxxxx Inc., 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Chief
Executive Officer, and (ii) if to the Underwriter, to Xxxxxxxxx, Lufkin &
Xxxxxxxx Securities Corporation, 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: Syndicate Department, or in any case to such other address as the
person to be notified may have requested in writing.
The respective indemnities, contribution agreements, representations,
warranties and other statements of the Company and the Underwriter set forth in
or made pursuant to this Agreement shall remain operative and in full force and
effect, and will survive delivery of and payment for the Securities, regardless
of (i) any investigation, or statement as to the results thereof, made by or on
behalf of the Underwriter, the officers or directors of the Underwriter, any
person controlling the Underwriter, any QIU Indemnified Party, the Company, the
officers or directors of the Company or any person controlling the
29
Company, (ii) acceptance of the Securities and payment for them hereunder and
(iii) termination of this Agreement.
If for any reason the Securities are not delivered by or on behalf of
the Company as provided herein (other than as a result of any termination of
this Agreement pursuant to Section 10), the Company agrees to reimburse the
Underwriter for all out-of-pocket expenses (including the reasonable fees and
disbursements of counsel) incurred by the Underwriter. Notwithstanding any
termination of this Agreement, the Company shall be liable for all expenses
which it has agreed to pay pursuant to Section 5(j) hereof. The Company also
agrees to reimburse the Underwriter, its directors and officers, any persons
controlling the Underwriter, and the QIU Indemnified Parties for any and all
fees and expenses (including, without limitation, the fees disbursements of
counsel) incurred by them in connection with enforcing their rights hereunder
(including, without limitation, pursuant to Sections 7 and 8 hereof).
Except as otherwise provided, this Agreement has been and is made
solely for the benefit of and shall be binding upon the Company, the
Underwriter, the Underwriter's directors and officers, any controlling persons
referred to herein, the QIU Indemnified Parties, the Company's directors and
the Company's officers who sign the Registration Statement and their respective
successors and assigns, all as and to the extent provided in this Agreement,
and no other person shall acquire or have any right under or by virtue of this
Agreement. The term "successors and assigns" shall not include a purchaser of
any of the Shares from any of the several Underwriters merely because of such
purchase.
This Agreement shall be governed and construed in accordance with the
laws of the State of New York.
This Agreement may be signed in various counterparts which together
shall constitute one and the same instrument.
[signature pages follow]
30
Please confirm that the foregoing correctly sets forth the agreement
between the Issuers and the Underwriter.
Very truly yours,
XXXXX XXXXX INC.
By:
-------------------------------
Name:
Title:
DRI I INC.
By:
-------------------------------
Name:
Title:
XXXXX XXXXX
By: DRI I Inc., a general partner
By:
-------------------------------
Name:
Title:
31
XXXXXXXXX, LUFKIN & XXXXXXXX
SECURITIES CORPORATION
By:
-------------------------------
Name:
Title:
Solely with respect to the second paragraph of Section 2, Section 5(j)(xi),
Section 8 and Section 11:
XXXXXXX, SACHS & CO.
By:
-------------------------------
Name:
Title:
32
