EXHIBIT 1.1
TECHNICAL OLYMPIC USA, INC.
$350,000,000
$200,000,000 9% Senior Notes due 2010
$150,000,000 10 3/8% Senior Subordinated Notes due 2012
Purchase Agreement
New York, New York
June 14, 2002
Xxxxxxx Xxxxx Xxxxxx Inc.
Deutsche Bank Securities Inc.
Fleet Securities, Inc.
As Representatives of the Initial Purchasers
c/o Xxxxxxx Xxxxx Xxxxxx Inc.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Newmark Homes Corp., a corporation organized under the laws of
Delaware (the "Company"), to be renamed "Technical Olympic USA, Inc." following
the Merger (as defined below), proposes to issue and sell to the several parties
named in Schedule I hereto (the "Initial Purchasers"), for whom you (the
"Representatives") are acting as representatives, $200,000,000 principal amount
of its 9% Senior Notes due 2010 (the "2010 Notes") and $150,000,000 principal
amount of its 10 3/8% Senior Subordinated Notes due 2012 (the "2012 Notes," and,
together with the 2010 Notes (the "Notes"), and the Notes together with the
Guarantees (as defined below), the " Securities"). The Securities are to be
issued under two separate indentures (collectively, the "Indenture"), each dated
June 25, 2002, and between the Company, the Guarantors (as defined below) and
Xxxxx Fargo Bank Minnesota, National Association, as trustee (the "Trustee").
The holders of the 2010 Notes and the 2012 Notes will each have the benefit of a
registration rights agreement (collectively, the "Registration Rights
Agreements"), dated June 25, 2002, between the Company, the Guarantors and the
Initial Purchasers, pursuant to which the Company and the Guarantors have agreed
to register a new series of notes (the "Exchange Notes") and related guarantees
(the "Exchange Guarantees," and, together with the Exchange Notes, the "Exchange
Securities") under the Act subject to the terms and conditions therein
specified. Pursuant to the Registration Rights Agreements, the Exchange
Securities will be offered in exchange for the Securities (the "Registered
Exchange Offer"). The Notes will be unconditionally guaranteed (the
"Guarantees") by each of the Company's direct and indirect domestic Subsidiaries
set forth on the signature page hereto (the "Guarantors"). To the extent there
are no additional parties listed on Schedule I other than you, the term
Representatives as used herein shall mean you as the Initial Purchasers, and the
terms Representatives and Initial Purchasers shall mean either the singular or
plural as the context requires. The use of the neuter
in this Agreement shall include the feminine and masculine wherever appropriate.
Certain terms used herein are defined in Section 17 hereof.
The sale of the Securities to the Initial Purchasers will be
made without registration of the Securities under the Act in reliance upon
exemptions from the registration requirements of the Act.
The Securities are being offered and sold (the "Offering") in
connection with the merger of Xxxxx Holdings Corp. ("Xxxxx") with and into the
Company (the "Merger"), and the net proceeds of the Offering will be used to
repay, defease or discharge debt of the Company, Xxxxx and the company now known
as Technical Olympic, Inc., all as described under the heading "Use of Proceeds"
in the Final Memorandum (as defined below). Concurrently with the closing of the
Offering, the Company and certain of its Subsidiaries will enter into a new
revolving credit facility that will provide for revolving credit loans of up to
$225.0 million (the "New Credit Facility").
In connection with the sale of the Securities, the Company has
prepared a preliminary offering memorandum, dated June 4, 2002 (as amended or
supplemented at the Execution Time, including any and all exhibits thereto and
any information incorporated by reference therein, the "Preliminary
Memorandum"), and a final offering memorandum, dated June 14, 2002 (as amended
or supplemented at the Execution Time, including any and all exhibits thereto
and any information incorporated by reference therein, the "Final Memorandum").
Each of the Preliminary Memorandum and the Final Memorandum sets forth certain
information concerning the Company, Xxxxx, the Merger and the Securities. The
Company hereby confirms that it has authorized the use of the Preliminary
Memorandum and the Final Memorandum, and any amendment or supplement thereto, in
connection with the offer and sale of the Securities by the Initial Purchasers.
Unless stated to the contrary, any references herein to the terms "amend,"
"amendment" or "supplement" with respect to the Final Memorandum shall be deemed
to refer to and include any information filed under the Exchange Act subsequent
to the Execution Time which is incorporated by reference therein.
1. Representations and Warranties of the Company and the
Guarantors. The Company and the Guarantors, jointly and severally, represent and
warrant to each Initial Purchaser as set forth below in this Section 1.
(a) The Preliminary Memorandum, at the date thereof,
did not contain any untrue statement of a material fact or omit to
state any material fact necessary to make the statements therein, in
the light of the circumstances under which they were made, not
misleading. At the Execution Time and on the Closing Date, the Final
Memorandum did not, and will not (and any amendment or supplement
thereto, at the date thereof and on the Closing Date will not), contain
any untrue statement of a material fact or omit to state any material
fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided,
however, that the Company and the Guarantors make no representation or
warranty as to the information contained in or omitted from the
Preliminary Memorandum or the Final Memorandum, or any amendment or
supplement thereto, in reliance upon and in conformity with
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information furnished in writing to the Company by or on behalf of the
Initial Purchasers through the Representatives specifically for
inclusion therein.
(b) None of the Company, Xxxxx, the Guarantors, any
of their Affiliates or any person acting on any of their behalf has,
directly or indirectly, made offers or sales of any security, or
solicited offers to buy any security, under circumstances that would
require the registration of the Securities under the Act.
(c) None of the Company, Xxxxx, the Guarantors, any
of their Affiliates or any person acting on any of their behalf has
engaged in any form of general solicitation or general advertising
(within the meaning of Regulation D) in connection with any offer or
sale of the Securities in the United States.
(d) The Securities satisfy the eligibility
requirements of Rule 144A(d)(3) under the Act.
(e) None of the Company, Xxxxx, the Guarantors, any
of their Affiliates or any person acting on any of their behalf has
engaged in any directed selling efforts with respect to the Securities,
and each of them has complied with the offering restrictions
requirement of Regulation S. Terms used in this paragraph and not
otherwise defined in this Agreement have the meanings given to them by
Regulation S.
(f) The Company has been advised by the NASD's PORTAL
Market that the Notes and the Exchange Notes have been designated
PORTAL-eligible securities in accordance with the rules and regulations
of the NASD.
(g) The Company is not, and after giving effect to
the Merger and the Offering and the application of the proceeds thereof
as described under the heading "Use of Proceeds" in the Final
Memorandum will not be, an "investment company" within the meaning of
the Investment Company Act, without taking account of any exemption
arising out of the number of holders of the Company's securities.
(h) The Company is subject to and in compliance with
the reporting requirements of Section 13 or Section 15(d) of the
Exchange Act. Each document filed or to be filed by the Company or
Xxxxx with the Commission prior to the Closing Date (as defined herein)
pursuant to the Exchange Act or otherwise, complied as to form at the
time of its filing with, or will comply as to form at the time of the
filing thereof with, the requirements of the Exchange Act. The
Information Statement on Form 14C filed with the Commission in
connection with the Merger (the "Information Statement") did not at the
time of its filing contain, and will not contain prior to the closing
date of the Merger, any untrue statement of material fact and did not
at the time of its filing omit, and will not prior to the closing date
of the Merger omit, to state any material fact necessary to make the
statements therein, in the light of the circumstances under which they
were made, not misleading.
(i) None of the Company, Xxxxx or any of the
Guarantors has paid or agreed to pay to any person any compensation for
soliciting another to purchase any securities of the Company (except as
contemplated by this Agreement).
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(j) None of the Company, Xxxxx or any Guarantor has
taken, directly or indirectly, any action designed to cause or which
has constituted or which might reasonably be expected to cause or
result, under the Exchange Act or otherwise, in the stabilization or
manipulation of the price of any security of the Company to facilitate
the sale or resale of the Securities.
(k) Each of the Company, Xxxxx and their Subsidiaries
has been duly organized, and is validly existing as a corporation,
limited liability company or limited partnership in good standing under
the laws of the jurisdiction in which it is incorporated or organized,
with full corporate, limited liability company or limited partnership
power and authority to own or lease, as the case may be, and to operate
its properties and conduct its business as described in the Final
Memorandum, and is duly qualified to do business as a foreign
corporation, limited liability company or limited partnership and is in
good standing under the laws of each jurisdiction which requires such
qualification, except where the failure to be in good standing or duly
qualified would not have a Material Adverse Effect. Except as set forth
on Exhibit A hereto, the Company has no, and upon effectiveness of the
Merger, will not have any, Subsidiaries other than the Guarantors.
(l) All the outstanding shares of capital stock of
Xxxxx and each Subsidiary of the Company and Xxxxx have been duly and
validly authorized and issued and are fully paid and nonassessable; all
outstanding shares of capital stock and partnership interests of the
Subsidiaries of the Company are owned by the Company either directly or
through other wholly-owned Subsidiaries of the Company free and clear
of any perfected security interest or any other security interests,
claims, liens or encumbrances, except as disclosed in Schedule II
hereto; and on the date of this Agreement, all outstanding shares of
the capital stock and partnership interests of the Subsidiaries of
Xxxxx are owned by Xxxxx either directly or through other wholly-owned
Subsidiaries of Xxxxx and upon effectiveness of the Merger, will be
owned by the Company either directly or through other wholly-owned
Subsidiaries of the Company, in each case free and clear of any
perfected security interest or any other security interests, claims,
liens or encumbrances, except as disclosed in Schedule II hereto.
(m) The statements in the Final Memorandum under the
headings "Description of the Notes," "Exchange Offer; Registration
Rights" and "United States Federal Income Tax Considerations" fairly
summarize in all material respects the matters therein described.
(n) This Agreement has been duly authorized, executed
and delivered by the Company and each of the Guarantors; the Indenture
has been duly authorized and, assuming due authorization, execution and
delivery thereof by the Trustee, when executed and delivered by the
Company and each of the Guarantors, will constitute a legal, valid and
binding instrument enforceable against the Company and each of the
Guarantors in accordance with its terms (subject, as to the enforcement
of remedies, to applicable bankruptcy, reorganization, insolvency,
fraudulent conveyance, moratorium, preference or other laws affecting
creditors' rights generally from time to time in effect and to general
principles of equity, regardless of whether enforcement is sought in a
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procedure at law or in equity); the Securities and the Exchange
Securities have been duly authorized, and, when executed and, in the
case of the Notes, authenticated, in accordance with the provisions of
the Indenture and delivered to and paid for by the Initial Purchasers,
and in the case of the Exchange Notes, authenticated, in accordance
with the provisions of the Indenture and delivered to the holders of
Notes in exchange therefor as contemplated by the Registration Rights
Agreements, such Securities and Exchange Securities will have been duly
executed and delivered by the Company and each of the Guarantors and
will constitute legal, valid, binding and enforceable obligations of
the Company and each of the Guarantors entitled to the benefits of the
Indenture (subject, as to the enforcement of remedies, to applicable
bankruptcy, insolvency, fraudulent conveyance, moratorium or other laws
affecting creditors' rights generally from time to time in effect and
to general principles of equity); and each of the Registration Rights
Agreements and the Merger Agreement has been duly authorized and, when
executed and delivered by the Company, will constitute the legal,
valid, binding and enforceable instrument of the Company (subject, as
to the enforcement of remedies, to applicable bankruptcy,
reorganization, insolvency, fraudulent conveyance, moratorium or other
laws affecting creditors' rights generally from time to time in effect
and to general principles of equity, regardless of whether enforcement
is sought in a procedure at law or in equity).
(o) Each of the Company, Xxxxx and the Guarantors has
all requisite corporate, limited liability company or partnership power
and authority, has taken all requisite corporate, limited liability
company or partnership action, and has received and is in compliance
with all governmental, judicial and other authorizations, approvals and
orders necessary to enter into and perform this Agreement, the
Indenture, the Registration Rights Agreements, the Securities, the
Exchange Securities and the Merger Agreement, as applicable. No
consent, approval, authorization, filing with or order of any court or
governmental agency or body is required in connection with the
transactions contemplated herein or in the Indenture, the Registration
Rights Agreements or the Merger Agreement, except such as will be
obtained under the Act and the Trust Indenture Act and such as may be
required under the blue sky laws of any jurisdiction in connection with
the purchase and distribution of the Securities by the Initial
Purchasers in the manner contemplated herein and in the Final
Memorandum and the Registration Rights Agreements and, in the case of
the Merger Agreement, the filing of the Certificate of Merger for the
Merger with the Secretary of State of the State of Delaware (which
filing shall have been made on or prior to the Closing Date).
(p) Neither the execution and delivery of the
Indenture, this Agreement, the Registration Rights Agreements or the
Merger Agreement, nor the issue and sale of the Securities and the
Exchange Securities, nor the consummation of any other of the
transactions herein or therein contemplated, nor the fulfillment of the
terms hereof or thereof will conflict with, result in a breach or
violation or imposition of any lien, charge or encumbrance upon any
property or asset of the Company, Xxxxx or any of their Subsidiaries
pursuant to, (i) the certificate of incorporation, by-laws or other
organizational documents of the Company, Xxxxx or any of their
Subsidiaries; (ii) the terms of any indenture, contract, lease,
mortgage, deed of trust, note agreement, loan agreement or other
agreement, obligation, condition, covenant or instrument to which the
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Company, Xxxxx or any of their Subsidiaries is a party or bound or to
which its or their property is subject; or (iii) any statute, law,
rule, regulation, judgment, order or decree applicable to the Company,
Xxxxx or any of their Subsidiaries of any court, regulatory body,
administrative agency, governmental body, arbitrator or other authority
having jurisdiction over the Company, Xxxxx or any of their
Subsidiaries or any of their properties.
(q) The consolidated historical financial statements
of the Company and its consolidated Subsidiaries and Xxxxx and its
consolidated Subsidiaries included in the Final Memorandum present
fairly in all material respects the financial condition, results of
operations and cash flows of the Company as of the dates and for the
periods indicated, comply as to form in all material respects with the
applicable accounting requirements of the Act and have been prepared in
conformity with generally accepted accounting principles applied on a
consistent basis throughout the periods involved (except as otherwise
noted therein). The selected financial data set forth under the
captions "Newmark Selected Historical Consolidated Financial and
Operating Data" and "Xxxxx Selected Historical Consolidated Financial
and Operating Data" in the Final Memorandum fairly present, on the
basis stated in the Final Memorandum, the information included therein;
the pro forma financial statements included in the Final Memorandum
include assumptions that provide a reasonable basis for presenting the
significant effects directly attributable to the transactions and
events described therein, the related pro forma adjustments give
appropriate effect to those assumptions, and the pro forma adjustments
reflect the proper application of those adjustments to the historical
financial statement amounts in the pro forma financial statements
included in the Final Memorandum; the pro forma financial statements
included in the Final Memorandum comply as to form in all material
respects with the applicable accounting requirements of Regulation S-X
under the Act; and the pro forma adjustments have been properly applied
to the historical amounts in the compilation of those statements.
(r) No action, suit or proceeding by or before any
court or governmental agency, authority or body or any arbitrator
involving the Company, Xxxxx or any of their Subsidiaries or their
directors, officers or property is pending or, to the best knowledge of
the Company, threatened that (i) would reasonably be expected to have
an adverse effect on the performance of this Agreement, the Indenture,
the Registration Rights Agreements or the Merger Agreement, or the
consummation of any of the transactions contemplated hereby or thereby;
or (ii) would reasonably be expected to have a Material Adverse Effect,
whether or not arising from transactions in the ordinary course of
business.
(s) Each of the Company, Xxxxx and their Subsidiaries
owns or leases all such properties as are necessary to the conduct of
its operations as presently conducted, except where the failure to own
or lease such properties would not have a Material Adverse Effect.
(t) Neither the Company, Xxxxx nor any of their
Subsidiaries is in violation or default of (i) any provision of its
certificate of incorporation, bylaws or other organizational documents;
(ii) the terms of any indenture, contract, lease, mortgage, deed of
trust, note agreement, loan agreement or other agreement, obligation,
condition,
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covenant or instrument to which it is a party or bound or to which its
property is subject; or (iii) any statute, law, rule, regulation,
judgment, order or decree of any court, regulatory body, administrative
agency, governmental body, arbitrator or other authority having
jurisdiction over it or any of its properties, as applicable; except in
the case of clauses (ii) or (iii) above, where such violation or
default would not have a Material Adverse Effect.
(u) Ernst & Young LLP, who have certified certain
financial statements of the Company and its consolidated Subsidiaries
and Xxxxx and its consolidated Subsidiaries and delivered their reports
with respect to the audited consolidated financial statements and
schedules included in the Final Memorandum, are independent public
accountants with respect to each of the Company and Xxxxx within the
meaning of the Act and the applicable published rules and regulations
thereunder; BDO Xxxxxxx, LLP who have certified certain financial
statements of the Company and its consolidated Subsidiaries and
delivered their report with respect to the audited consolidated
financial statements and schedules included in the Final Memorandum,
are independent public accountants with respect to the Company within
the meaning of the Act and the applicable published rules and
regulations thereunder.
(v) There are no stamp or other issuance or transfer
taxes or duties or other similar fees or charges required to be paid in
connection with the execution, delivery and performance of this
Agreement or the Merger Agreement or the issuance or sale by the
Company and the Guarantors of the Securities or the Exchange
Securities.
(w) Each of the Company, Xxxxx and their Subsidiaries
has filed all foreign, federal, state and local tax returns that are
required to be filed or has requested extensions thereof (except in any
case in which the failure so to file would not have a Material Adverse
Effect), and has paid all taxes required to be paid by it and any other
assessment, fine or penalty levied against it, to the extent that any
of the foregoing is due and payable, except for any such assessment,
fine or penalty that is currently being contested in good faith or as
would not have a Material Adverse Effect.
(x) No labor problem or dispute with the employees of
the Company, Xxxxx or any of their Subsidiaries exists or to the
Company's best knowledge is threatened or imminent, and the Company is
not aware of any existing or imminent labor disturbance by the
employees of any of its, Xxxxx'x or their Subsidiaries' principal
suppliers or contractors, that would have a Material Adverse Effect.
(y) (i) The Company, Xxxxx and their Subsidiaries are
insured by insurers of recognized financial responsibility against such
losses and risks and in such amounts as are customary in the businesses
in which they are engaged; (ii) all policies of insurance and fidelity
or surety bonds insuring the Company, Xxxxx or any of their
Subsidiaries or their respective businesses, assets, employees,
officers and directors are in full force and effect; (iii) the Company,
Xxxxx and their Subsidiaries are in compliance with the terms of such
policies and instruments in all material respects; (iv) there are no
claims by the Company, Xxxxx or their Subsidiaries under any such
policy or instrument as to which any insurance company is denying
liability or defending under a reservation of rights
7
clause; and (v) neither the Company, Xxxxx nor any such Subsidiary has
been refused any insurance coverage sought or applied for, except in
the case of clauses (i) through (v) above as would not have a Material
Adverse Effect. Neither the Company, Xxxxx nor any such Subsidiary has
any reason to believe that it will not be able to renew its existing
insurance coverage as and when such coverage expires, except where the
Company, Xxxxx or such Subsidiary can obtain similar coverage from
insurers as may be necessary to continue its business at a cost that
would not have a Material Adverse Effect or the failure to so renew
would not have a Material Adverse Effect.
(z) No Subsidiary of the Company is currently, or
following the Merger will be, prohibited, directly or indirectly, from
paying any dividends to the Company or any of its Subsidiaries, from
making any other distribution on such Subsidiary's capital stock, from
repaying to the Company or any of its Subsidiaries any loans or
advances to such Subsidiary from the Company or such other Subsidiary
or from transferring any of such Subsidiary's property or assets to the
Company or any other Subsidiary of the Company, except as described in
or contemplated by the Final Memorandum (exclusive of any amendment or
supplement thereto).
(aa) The Company, Xxxxx and their Subsidiaries
possess all licenses, certificates, permits and other authorizations
issued by the appropriate federal, state, local or foreign regulatory
authorities necessary to conduct their respective businesses, and
neither the Company, Xxxxx nor any such Subsidiary has received any
notice of proceedings relating to the revocation or modification of any
such certificate, authorization or permit which, singly or in the
aggregate, if the subject of an unfavorable decision, ruling or
finding, would have a Material Adverse Effect.
(bb) The Company, Xxxxx and each of their
Subsidiaries maintain 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.
(cc) The Company, Xxxxx and their Subsidiaries are
(i) in compliance with any and all applicable foreign, federal, state
and local laws and regulations relating to the protection of human
health and safety, the environment or hazardous or toxic substances or
wastes, pollutants or contaminants ("Environmental Laws"), (ii) have
received and are in compliance with all permits, licenses or other
approvals required of them under applicable Environmental Laws to
conduct their respective businesses and (iii) have not received notice
of any actual or potential liability for the investigation or
remediation of any disposal or release of hazardous or toxic substances
or wastes, pollutants or contaminants, except where such non-compliance
with Environmental Laws, failure to receive required permits, licenses
or other approvals, or liability would not, individually or in the
aggregate, have a Material Adverse Effect. None of the
8
Company, Xxxxx or any of the Subsidiaries has been named as a
"potentially responsible party" under the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980, as amended.
(dd) In the ordinary course of its business, each of
the Company and Xxxxx periodically reviews the effect of Environmental
Laws on its and its Subsidiaries' business, operations and properties,
in the course of which it identifies and evaluates associated costs and
liabilities (including, without limitation, any capital or operating
expenditures required for clean-up, closure of properties or compliance
with Environmental Laws, or any permit, license or approval, any
related constraints on operating activities and any potential
liabilities to third parties); on the basis of such review, the Company
has reasonably concluded that such associated costs and liabilities
would not, singly or in the aggregate, have a Material Adverse Effect.
(ee) Each of the Company, Xxxxx and their
Subsidiaries has fulfilled its obligations, if any, under the minimum
funding standards of Section 302 of the United States Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), and the
regulations and published interpretations thereunder with respect to
each "plan" (as defined in Section 3(3) of ERISA and such regulations
and published interpretations) in which employees of the Company, Xxxxx
and their Subsidiaries are eligible to participate and each such plan
is in compliance in all material respects with the presently applicable
provisions of ERISA and such regulations and published interpretations,
except where the failure to fulfill such obligations would not have a
Material Adverse Effect. None of the Company, Xxxxx or their
Subsidiaries has incurred any unpaid liability to the Pension Benefit
Guaranty Corporation (other than for the payment of premiums in the
ordinary course) or to any such plan under Title IV of ERISA, except
for such liability as would not have a Material Adverse Effect.
(ff) Each of the relationships and transactions
specified in Item 404 of Regulation S-K that would have been required
to be described in a prospectus if the Offering had been registered
under the Act have been so described in the Final Memorandum (exclusive
of any amendment or supplement thereto).
(gg) Each of the Company, Xxxxx and their
Subsidiaries own, possess, license or have other rights to use, on
reasonable terms, all patents, patent applications, trade and service
marks, trade and service mark registrations, trade names, copyrights,
licenses, inventions, trade secrets, technology, know-how and other
intellectual property (collectively, the "Intellectual Property")
necessary for the conduct of its business as now conducted or as
proposed in the Final Memorandum to be conducted, except where the
failure to own, possess, license or have other rights to use such
Intellectual Property would not reasonably be expected to have a
Material Adverse Effect. (i) There are no rights of third parties to
any of the Intellectual Property (other than the rights of licensors in
Intellectual Property that is licensed to the Company, Xxxxx and their
Subsidiaries); (ii) there is no material infringement by third parties
of any of the Intellectual Property; (iii) there is no pending or, to
the Company's knowledge, threatened action, suit, proceeding or claim
by others challenging the Company's, Xxxxx'x or any of their
Subsidiaries' rights in or to any of the Intellectual Property, and the
Company is unaware of any facts which
9
would form a reasonable basis for such claim; (iv) there is no pending
or, to the Company's knowledge, threatened action, suit, proceeding or
claim by others challenging the validity or scope of any of the
Intellectual Property, and the Company is unaware of any facts which
would form a reasonable basis for any such claim; (v) there is no
pending or, to the Company's knowledge, threatened action, suit,
proceeding or claim by others that the Company, Xxxxx or any of their
Subsidiaries infringes or otherwise violates any patent, trademark,
copyright, trade secret or other proprietary rights of others, and the
Company is unaware of any other fact which would form a reasonable
basis for any such claim; and (vi) neither the Company, Xxxxx nor any
of their Subsidiaries owns, possesses, licenses or has other rights to
use any patent or patent application.
(hh) The statements in the Final Memorandum under the
headings "Risk Factors - Our business is subject to governmental
regulations that increase the cost of our development and homebuilding
projects and may adversely affect our business," "Business -
Governmental Regulation and Environmental Matters" and "Business -
Legal Proceedings" insofar as such statements summarize legal matters,
agreements, documents or proceedings discussed therein, are accurate in
all material respects and fair summaries of such legal matters,
agreements, documents or proceedings.
(ii) Except as would not reasonably be expected to
have a Material Adverse Effect, each of the Company, Xxxxx and their
Subsidiaries has: (i) good and indefeasible title in fee simple to all
of their properties, including improvements thereon, free and clear of
all liens, charges, encumbrances and restrictions; and (ii) possession
under all material leases to which any of them is a party as lessee and
each of which is valid and binding and no default exists thereunder.
There are no pending or, to the knowledge of the Company, threatened
condemnation proceedings, zoning changes or other similar proceedings
or actions that would affect the size, use of, improvements on,
construction on or access to any of the properties belonging to the
Company, Xxxxx or any of their Subsidiaries except for such
condemnation proceedings, zoning changes or other similar proceedings
or actions that would not have a Material Adverse Effect. Each of the
properties, belonging to the Company, Xxxxx or any of their
Subsidiaries, complies with all applicable codes, laws and regulations
(including without limitation, building and zoning laws) except for
such failures to comply that would not reasonably be expected to have a
Material Adverse Effect. No person has an option or right of first
refusal to purchase all or any material part of any material property
belonging to the Company, Xxxxx or any of their Subsidiaries, or any
interest therein, except as disclosed in Schedule II hereto.
Any certificate signed by any officer of the Company or Xxxxx
and delivered to the Representatives or counsel for the Initial Purchasers in
connection with the offering of the Securities shall be deemed a representation
and warranty by the Company, as to matters covered thereby, to each Initial
Purchaser.
2. Purchase and Sale. Subject to the terms and conditions and
in reliance upon the representations and warranties herein set forth, the
Company and the Guarantors agree to sell to each Initial Purchaser, and each
Initial Purchaser agrees, severally and not jointly, to purchase from the
Company and the Guarantors, at a purchase price of: (i) 98.000% of their
principal
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amount in the case of the 2010 Notes; and (ii) 97.500 % of their principal
amount in the case of the 2012 Notes, plus, in each case, accrued interest, if
any, from June 25, 2002, to the Closing Date, the principal amount of Securities
set forth opposite such Initial Purchaser's name in Schedule I hereto.
3. Delivery and Payment. Delivery of and payment for the
Securities shall be made at 10:00 A.M., New York City time, on June 25, 2002, or
at such time on such later date (not later than July 8, 2002) as the
Representatives shall designate, which date and time may be postponed by
agreement between the Representatives and the Company or as provided in Section
9 hereof (such date and time of delivery and payment for the Securities being
herein called the "Closing Date"). The Securities shall be delivered in such
names, forms and amounts as the Representatives shall specify and delivery shall
be made to the Representatives for the respective accounts of the several
Initial Purchasers against payment by the several Initial Purchasers through the
Representatives of the purchase price thereof to or upon the order of the
Company by wire transfer payable in same-day funds to the account specified by
the Company. Delivery of the Securities shall be made through the facilities of
The Depository Trust Company unless the Representatives shall otherwise
instruct.
4. Representations, Warranties and Covenants of the Initial
Purchasers. Each Initial Purchaser, severally and not jointly, represents and
warrants to and agrees with the Company and the Guarantors that:
(a) It has not offered or sold, and will not offer or
sell, any Securities except (i) to those it reasonably believes to be
qualified institutional buyers (as defined in Rule 144A under the Act)
and that, in connection with each such sale, it has taken or will take
reasonable steps to ensure that the purchaser of such Securities is
aware that such sale is being made in reliance on Rule 144A or (ii) in
accordance with the restrictions set forth in Exhibit B hereto.
(b) Neither it nor any person acting on its behalf
has made or will make offers or sales of the Securities in the United
States by means of any form of general solicitation or general
advertising (within the meaning of Regulation D) in the United States.
5. Agreements. The Company agrees with each Initial Purchaser
that:
(a) The Company will furnish to each Initial
Purchaser and to counsel for the Initial Purchasers, without charge,
during the period referred to in paragraph (c) below, as many copies of
the Final Memorandum and any amendments and supplements thereto as they
may reasonably request.
(b) The Company will not amend or supplement the
Final Memorandum, other than by filing documents under the Exchange Act
that are incorporated by reference therein, without the prior written
consent of the Representatives, which consent shall not be unreasonably
withheld; provided, however, that, prior to the completion of the
distribution of the Securities by the Initial Purchasers (as determined
by the Initial Purchasers), the Company will not file any document
under the Exchange Act that is
11
incorporated by reference in the Final Memorandum unless, prior to such
proposed filing, the Company has furnished the Representatives with a
copy of such document for their review and the Representatives have not
reasonably objected to the filing of such document in a timely fashion.
The Company will promptly advise the Representatives when any document
filed under the Exchange Act that is incorporated by reference in the
Final Memorandum shall have been filed with the Commission.
(c) If at any time prior to the completion of the
sale of the Securities by the Initial Purchasers (as determined by the
Representatives), any event occurs as a result of which the Final
Memorandum, as then amended or supplemented, would include any untrue
statement of a material fact or omit to state any material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or if it
should be necessary to amend or supplement the Final Memorandum to
comply with applicable law, the Company promptly (i) will notify the
Representatives of any such event; (ii) subject to the requirements of
paragraph (b) of this Section 5, will prepare an amendment or
supplement that will correct such statement or omission or effect such
compliance; and (iii) will supply any supplemented or amended Final
Memorandum to the several Initial Purchasers and counsel for the
Initial Purchasers without charge in such quantities as they may
reasonably request.
(d) The Company will arrange, if necessary, for the
qualification of the Securities for sale by the Initial Purchasers
under the laws of such jurisdictions as the Initial Purchasers may
designate and will maintain such qualifications in effect so long as
required for the sale of the Securities; provided that in no event
shall the Company be obligated to qualify to do business in any
jurisdiction where it is not now so qualified or to take any action
that would subject it to service of process in suits, other than those
arising out of the offering or sale of the Securities, in any
jurisdiction where it is not now so subject. The Company will promptly
advise the Representatives of the receipt by the Company of any
notification with respect to the suspension of the qualification of the
Securities for sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose.
(e) The Company and the Guarantors will not, and will
not permit any of its or their Affiliates to, resell any Securities
that have been acquired by any of them.
(f) None of the Company, the Guarantors, any of its
or their Affiliates, or any person acting on its or their behalf will,
directly or indirectly, make offers or sales of any security, or
solicit offers to buy any security, under circumstances that would
require the registration of the Securities under the Act.
(g) None of the Company, the Guarantors, any of its
or their Affiliates or any person acting on its or their behalf will
engage in any form of general solicitation or general advertising
(within the meaning of Regulation D) in connection with any offer or
sale of the Securities in the United States.
(h) So long as any of the Securities are "restricted
securities" within the meaning of Rule 144(a)(3) under the Act, the
Company and the Guarantors will, during
12
any period in which it is not subject to and in compliance with Section
13 or 15(d) of the Exchange Act or is not exempt from such reporting
requirements pursuant to and in compliance with Rule 12g3-2(b) under
the Exchange Act, provide to each holder of such restricted securities
and to each prospective purchaser (as designated by such holder) of
such restricted securities, upon the request of such holder or
prospective purchaser, any information required to be provided by Rule
144A(d)(4) under the Act. Such information will not, at the date
thereof, contain any untrue statement of a material fact or omit to
state any material fact necessary to make the statements therein, in
the light of the circumstances under which they were made, not
misleading. This covenant is intended to be for the benefit of the
holders, and the prospective purchasers designated by such holders,
from time to time of such restricted securities.
(i) None of the Company, the Guarantors, any of its
or their Affiliates or any person acting on its or their behalf will
engage in any directed selling efforts with respect to the Securities,
and each of them will comply with the offering restrictions requirement
of Regulation S. Terms used in this paragraph have the meanings given
to them by Regulation S.
(j) The Company will cooperate with the
Representatives and use its commercially reasonably best efforts to
permit the Securities and the Exchange Securities to be eligible for
clearance and settlement through The Depository Trust Company.
(k) None of the Company, the Guarantors or any of its
or their Subsidiaries will, for a period of 60 days following the
Execution Time, without the prior written consent of Xxxxxxx Xxxxx
Xxxxxx, offer, issue, sell, contract to offer, issue or sell, pledge,
grant any other option to purchase, or otherwise dispose of, directly
or indirectly, or announce the offering of, any debt securities issued
or guaranteed by any of us, or enter into any agreement to do any of
the foregoing.
(l) The Company will apply the net proceeds from the
sale of the Notes as set forth under the heading "Use of Proceeds" in
the Final Memorandum.
(m) Prior to the Closing Date, the Company shall have
applied the proceeds from the sale of Westbrooke Acquisition Corp. as
described under the heading "Pro Forma Combined Financial Statements"
in the Final Memorandum.
(n) None of the Company, the Guarantors or any of
their Affiliates will take, directly or indirectly, any action designed
to or which has constituted or which might reasonably be expected to
cause or result, under the Exchange Act or otherwise, in stabilization
or manipulation of the price of any security of the Company to
facilitate the sale or resale of the Securities.
(o) The Company agrees to pay the costs and expenses
(other than with respect to counsel for the Initial Purchasers)
relating to the following matters: (i) the preparation of the Indenture
and the Registration Rights Agreements, the issuance of the Securities
and the Exchange Securities, and the fees of the Trustee; (ii) the
preparation, printing or reproduction of the Preliminary Memorandum and
Final Memorandum and
13
each amendment or supplement to either of them; (iii) the printing (or
reproduction) and delivery (including postage, air freight charges and
charges for counting and packaging) of such copies of the Preliminary
Memorandum and Final Memorandum, and all amendments or supplements to
either of them, as may, in each case, be reasonably requested for use
in connection with the offering and sale of the Securities; (iv) the
preparation, printing, authentication, issuance and delivery of
certificates for the Securities, including any stamp or transfer taxes
in connection with the original issuance and sale of the Securities;
(v) the printing (or reproduction) and delivery of this Agreement, any
blue sky memorandum and all other agreements or documents printed (or
reproduced) and delivered in connection with the offering of the
Securities and the Exchange Securities; (vi) admitting the Notes and
the Exchange Notes for trading in the PORTAL Market; (vii) the
transportation and other expenses incurred by or on behalf of Company
representatives in connection with presentations to prospective
purchasers of the Securities; (viii) the fees and expenses of the
Company's accountants and the fees and expenses of counsel (including
local and special counsel) for the Company; and (ix) all other costs
and expenses incident to the performance by the Company of its
obligations hereunder.
(p) On the Closing Date, the Company shall cause each
entity that issues a Guaranty in respect of the Notes which is not then
a party to this Agreement to execute and deliver an instrument of
accession, in form and substance reasonably satisfactory to the Initial
Purchasers, joining such entity as a Guarantor under this Agreement.
6. Conditions to the Obligations of the Initial Purchasers.
The obligations of the Initial Purchasers to purchase the Securities shall be
subject to the accuracy of the representations and warranties on the part of the
Company and the Guarantors contained herein at the Execution Time, the Closing
Date, to the accuracy of the statements of the Company, Xxxxx and the Guarantors
made in any certificates pursuant to the provisions hereof, to the performance
by the Company and the Guarantors of its or their obligations hereunder and to
the following additional conditions:
(a) The Company shall have requested and caused
Xxxxxx & Xxxxxx L.L.P., counsel for the Company and the Guarantors, to
furnish to the Representatives its opinion (containing customary
assumptions, qualifications, limitations and exceptions acceptable to
the Initial Purchasers), dated the Closing Date, addressed to the
Representatives and covering, in substance, the following matters:
(i) the Company and each of its Subsidiaries
incorporated or organized in the States of Delaware or Texas
immediately following effectiveness of the Merger
(collectively, the "Texas and Delaware Subsidiaries") has been
duly incorporated or formed, as the case may be, and is
validly existing as a corporation, limited liability company
or limited partnership in good standing under the laws of the
jurisdiction in which it is incorporated or formed, as the
case may be, with full corporate, limited liability company or
limited partnership power and authority to own or lease, as
the case may be, and to operate its properties and conduct its
business as described in the Final Memorandum, and is
14
duly qualified to do business as a foreign corporation,
limited liability company or limited partnership and is in
good standing under the laws of each jurisdiction in which
(according to an officers' certificate to be provided by an
officer of the Company and of each Texas and Delaware
Subsidiary) it owns or leases any property or otherwise does
business;
(ii) all the outstanding shares of capital
stock of each of the Texas and Delaware Subsidiaries have been
duly and validly authorized and issued and are fully paid and
nonassessable, and, except as otherwise set forth in the Final
Memorandum or as set forth in Schedule II, all outstanding
shares of capital stock and partnership interests of such
Texas and Delaware Subsidiary are owned by the Company either
directly or through wholly-owned Subsidiaries free of any
adverse claim (as such term is defined in Section 8-102(a)(1)
of the applicable version of the Uniform Commercial Code);
(iii) the Indenture has been duly
authorized, executed and delivered by the Company and the
Guarantors that are Texas and Delaware Subsidiaries, and,
assuming it has been duly authorized, executed and delivered
by the other Guarantors and the other parties thereto,
constitutes a legal, valid and binding instrument enforceable
against the Company and the Guarantors in accordance with its
terms (subject to applicable bankruptcy, reorganization,
insolvency, moratorium, fraudulent conveyance, preference or
other laws affecting creditors' rights generally from time to
time in effect and to general principles of equity, regardless
of whether enforcement is sought in a proceeding at law or in
equity); the issuance of the Securities has been duly and
validly authorized by the Company and the Guarantors that are
Texas and Delaware Subsidiaries and, when the Company and the
Guarantors that are Texas and Delaware Subsidiaries have duly
executed each global certificate representing the Securities
and such Securities have been authenticated, in accordance
with the provisions of the Indenture and delivered to and paid
for by the Initial Purchasers under this Agreement, and
assuming that the other Guarantors have duly and validly
authorized the Guarantees, such Securities will constitute
legal, valid, binding and enforceable obligations of the
Company and the Guarantors entitled to the benefits of the
Indenture (subject to applicable bankruptcy, reorganization,
insolvency, moratorium, fraudulent conveyance, preference or
other laws affecting creditors' rights generally from time to
time in effect and to general principles of equity, regardless
of whether enforcement is sought in a proceeding at law or in
equity); the issuance of the Exchange Securities has been duly
and validly authorized by the Company and the Guarantors that
are Texas and Delaware Subsidiaries and, when the Company and
the Guarantors that are Texas and Delaware Subsidiaries have
duly executed each global certificate representing the
Exchange Securities and such Exchange Securities have been
authenticated, in accordance with the provisions of the
Indenture and delivered to the holders of Notes in exchange
therefor as contemplated by the Registration Rights
Agreements, and assuming that the other Guarantors have duly
and validly authorized the Guarantees, such Exchange
Securities will constitute legal, valid, binding and
enforceable obligations of the Company and the Guarantors
entitled
15
to the benefits of the Indenture (subject to applicable
bankruptcy, reorganization, insolvency, moratorium, fraudulent
conveyance, preference or other laws affecting creditors'
rights generally from time to time in effect and to general
principles of equity, regardless of whether enforcement is
sought in a proceeding at law or in equity); each of the
Registration Rights Agreements and the Merger Agreement has
been duly authorized, executed and delivered by the Company
and the Guarantors that are Texas and Delaware Subsidiaries
parties thereto, and assuming the other Guarantors have duly
authorized, executed and delivered the Registration Rights
Agreements, constitutes the legal, valid, binding and
enforceable instrument of the Company and the Guarantors
parties thereto (subject to applicable bankruptcy,
reorganization, insolvency, moratorium, fraudulent conveyance,
preference or other laws affecting creditors' rights generally
from time to time in effect and to general principles of
equity, regardless of whether enforcement is sought in a
proceeding at law or in equity, and except that rights to
indemnity and contribution thereunder may be so limited by
applicable law) and the statements set forth under the
headings "Description of the Notes" and "Exchange Offer;
Registration Rights" in the Final Memorandum, insofar as such
statements purport to summarize certain provisions of the
Securities, the Indenture and the Registration Rights
Agreements, conform as to the legal matters in all material
respects to the descriptions contained in the Final
Memorandum;
(iv) to the knowledge of such counsel, there
is no pending or threatened (in writing) action, suit or
proceeding by or before any court or governmental agency,
authority or body or any arbitrator involving the Company or
any of its Subsidiaries or its or their officers, directors or
property of a character required to be disclosed in a
registration statement on Form S-1 which is not adequately
disclosed in the Final Memorandum, except in each case for
such proceedings that, if the subject of an unfavorable
decision, ruling or finding would not singly or in the
aggregate, have a Material Adverse Effect;
(v) the statements in the Final Memorandum
under the headings "United States Federal Income Tax
Consequences" and "Business - Legal Proceedings" conform as to
the legal matters in all material respects to the descriptions
contained in the Final Memorandum;
(vi) this Agreement has been duly
authorized, executed and delivered by the Company and the
Guarantors that are Texas and Delaware Subsidiaries;
(vii) the Company is not and, after giving
effect to the Merger and Offering and the application of the
proceeds thereof as described in the Final Memorandum, will
not be, an "investment company" as defined in the Investment
Company Act without taking into account any exemption arising
out of the number of holders of the Company's securities;
16
(viii) the Company and the Guarantors that
are Texas and Delaware Subsidiaries have all requisite
corporate, limited liability company or partnership power and
authority, have taken all requisite corporate, limited
liability company or partnership action, and have received and
are in compliance with all Texas, Delaware or federal
governmental, judicial and other authorizations, approvals and
orders necessary to enter into and perform this Agreement, the
Indenture, the Registration Rights Agreements, the Securities,
the Exchange Securities and the Merger Agreement, to the
extent parties thereto, and no consent, approval,
authorization, filing with or order of any Delaware or Texas
court or any Delaware or Texas governmental agency or body is
required in connection with the transactions contemplated
herein or in the Indenture, the Registration Rights Agreements
or the Merger Agreement, except such as may be required under
the Act and the Trust Indenture Act and such as may be
required under the blue sky or securities laws of any
jurisdiction in connection with the purchase and sale of the
Securities by the Initial Purchasers in the manner
contemplated in this Agreement and the Final Memorandum and
the Registration Rights Agreements and such other approvals
(specified in such opinion) as have been obtained and in the
case of the Merger Agreement, the filing of the Certificate of
Merger for the Merger with the Secretary of State of the State
of Delaware (which filing shall have been made on or prior to
the Closing Date);
(ix) neither the execution and delivery of
the Indenture, this Agreement, the Registration Rights
Agreements or the Merger Agreement, nor the issue and sale of
the Securities or the Exchange Securities, nor the
consummation of any other of the transactions herein or
therein contemplated, nor the fulfillment of the terms hereof
or thereof will conflict with or result in a breach or
violation of or imposition of any lien, charge or encumbrance
upon any property or asset of the Company, Engle or any of
their Subsidiaries pursuant to, (i) the certificate of
incorporation, by-laws or other organizational documents of
the Company, Xxxxx or any of their Subsidiaries, (ii) the
terms of any material contract identified in Schedule III
attached hereto, or (iii) any existing Delaware or Texas law,
rule or regulation applicable to the Company, Xxxxx or any of
their Subsidiaries (excluding any securities or anti-fraud
law, rule or regulation) or any judgment, order or decree
applicable to the Company, Xxxxx or any of their Subsidiaries
of any court, regulatory body, administrative agency,
governmental body, arbitrator or other authority having
jurisdiction over the Company, Xxxxx or any of their
Subsidiaries or any of their properties to the extent that
such judgment, order or decree is listed in officers'
certificates from officers of the Company, Xxxxx and their
Subsidiaries or of which we are otherwise aware;
(x) assuming the accuracy of the
representations and warranties and compliance with the
covenants and agreements contained herein, no registration of
the Securities under the Act, and no qualification of an
indenture under the Trust Indenture Act, are required for the
offer and sale to and by the Initial Purchasers of the
Securities in the manner contemplated by this Agreement; the
Indenture is in appropriate form for qualification under the
Trust Indenture Act; and
17
(xi) Xxxxx shall have defeased or discharged
its 9 1/4% Senior Notes due 2008 in accordance with Section
8.02 of the indentures governing those notes.
Such counsel shall also advise you that they have participated
in conferences with officers and other representatives of the Company,
representatives of the independent public accountants of the Company,
general counsel of the Company, representatives of the Initial
Purchasers and counsel for the Initial Purchasers, at which conferences
the Final Memorandum was discussed. Although such counsel has made
certain additional inquiries and investigations in connection with the
preparation of the Final Memorandum, they have not verified, are not
passing on and do not assume any responsibility for the accuracy,
completeness or fairness of the statements contained in the Final
Memorandum or any documents incorporated by reference therein, except
as set forth in paragraphs (iii) and (v) above, based on the foregoing,
no information has come to their attention that has caused them to
believe that the Final Memorandum, at its date and on the Closing Date
(other than the financial statements and schedules and other financial
data, in each case contained or incorporated by reference (including
the notes thereto and auditors' report thereon) therein, as to which
they do not express any comment or belief) contained or contains an
untrue statement of a material fact or omitted or omits to state a
material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.
In rendering such opinion, such counsel may rely (A) as to
matters involving the application of laws of any jurisdiction other
than the corporate laws of the State of Delaware, the State of New
York, the State of Texas or the Federal laws of the United States, to
the extent they deem proper and specified in such opinion, upon the
opinion of other counsel of good standing whom they believe to be
reliable, who are satisfactory to counsel for the Initial Purchasers
and upon whom the Initial Purchasers can rely; and (B) as to matters of
fact, to the extent they deem proper, on certificates of responsible
officers of the Company and public officials. References to the Final
Memorandum in this Section 6(a) include any amendment or supplement
thereto at the Closing Date.
(b) The Company shall have requested and caused one
or more special counsel for the Company and the Guarantors, reasonably
acceptable to the Initial Purchasers, to furnish to the Representatives
its or their opinion (containing customary assumptions, qualifications,
limitations and exceptions acceptable to the Initial Purchasers), dated
the Closing Date and addressed to the Representatives, and covering, in
substance, the following matters:
(i) Each of the Company's Subsidiaries
incorporated or organized in the States of Arizona, Colorado,
Florida, Georgia and Nevada immediately following
effectiveness of the Merger (collectively, the "Specified
Subsidiaries") has been duly incorporated or formed, as the
case may be, and is validly existing as a corporation, limited
liability company or limited partnership in good standing
under the laws of the jurisdiction in which it is incorporated
or formed, as the case may be, with full corporate, limited
liability company or limited partnership power and authority
to own or lease, as the case may be, and to operate its
properties and conduct its business as described in the Final
18
Memorandum, and is duly qualified to do business as a foreign
corporation, limited liability company or limited partnership
and is in good standing under the laws of each jurisdiction
(according to an officers' certificate to be provided by an
officer of the Company and of each Specified Subsidiary) it
owns or leases any property or otherwise does business;
(ii) all the outstanding shares of capital
stock of each of the Specified Subsidiaries have been duly and
validly authorized and issued and are fully paid and
nonassessable, and, except as otherwise set forth in the Final
Memorandum, all outstanding shares of capital stock and
partnership interests of such Specified Subsidiary are owned
by the Company either directly or through wholly-owned
Subsidiaries free of any adverse claim (as such term is
defined in Section 8-102(a)(1) of the applicable version of
the Uniform Commercial Code);
(iii) the Indenture has been duly
authorized, executed and delivered by the Guarantors that are
Specified Subsidiaries; the issuance of the Securities has
been duly and validly authorized by the Guarantors that are
Specified Subsidiaries; the issuance of the Exchange
Securities has been duly and validly authorized by the Company
and the Guarantors that are Specified Subsidiaries; and each
of the Registration Rights Agreements and the Merger Agreement
has been duly authorized, executed and delivered by the
Guarantors that are Specified Subsidiaries parties thereto;
(iv) this Agreement has been duly
authorized, executed and delivered by the Guarantors that are
Specified Subsidiaries;
(v) the Company and the Guarantors that are
Specified Subsidiaries have all requisite corporate, limited
liability company or partnership power and authority, have
taken all requisite corporate, limited liability company or
partnership action, and have received and are in compliance
with all Arizona, Colorado, Florida, Georgia or Nevada
governmental, judicial and other authorizations, approvals and
orders necessary to enter into and perform this Agreement, the
Indenture, the Registration Rights Agreements, the Securities,
the Exchange Securities and the Merger Agreement, to the
extent parties thereto, and no consent, approval,
authorization, filing with or order of any Arizona, Colorado,
Florida, Georgia or Nevada court or any Arizona, Colorado,
Florida, Georgia or Nevada governmental agency or body is
required in connection with the transactions contemplated
herein or in the Indenture, the Registration Rights Agreements
or the Merger Agreement except such as may be required under
the blue sky or securities laws of the States of Arizona,
Colorado, Florida, Georgia or Nevada in connection with the
purchase and sale of the Securities by the Initial Purchasers
in the manner contemplated in this Agreement and the Final
Memorandum and the Registration Rights Agreements; and
(vi) neither the execution and delivery of
the Indenture, this Agreement, the Registration Rights
Agreements or the Merger Agreement, nor the issue and sale of
the Securities or the Exchange Securities, nor the
consummation
19
of any other of the transactions herein or therein
contemplated, nor the fulfillment of the terms hereof or
thereof will conflict with or result in a breach or violation
of or imposition of any lien, charge or encumbrance upon any
property or asset of the Specified Subsidiaries pursuant to
any existing Arizona, Colorado, Florida, Georgia or Nevada
law, rule or regulation applicable to the Specified
Subsidiaries (excluding any securities or anti-fraud law, rule
or regulation).
In rendering such opinion, such counsel may rely (A) as to
matters involving the application of laws of any jurisdiction other than the
corporate laws of the State of Arizona, the State of Colorado, the State of
Florida, the State of Georgia, the State of Nevada or the Federal laws of the
United States, to the extent they deem proper and specified in such opinion,
upon the opinion of other counsel of good standing whom they believe to be
reliable, who are satisfactory to counsel for the Initial Purchasers and upon
whom the Initial Purchasers can rely; and (B) as to matters of fact, to the
extent they deem proper, on certificates of responsible officers of the Company
and public officials. References to the Final Memorandum in this Section 6(b)
include any amendment or supplement thereto at the Closing Date.
(c) The Representatives shall have received from
Xxxx, Gotshal & Xxxxxx LLP, counsel for the Initial Purchasers, such
opinion or opinions, dated the Closing Date and addressed to the
Representatives, with respect to the issuance and sale of the
Securities, the Exchange Securities, the Indenture, the Registration
Rights Agreements, the Final Memorandum (as amended or supplemented at
the Closing Date) and other related matters as the Representatives may
reasonably require, and the Company shall have furnished to such
counsel such documents as they request for the purpose of enabling them
to pass upon such matters.
(d) The Company and each Guarantor shall have
furnished to the Representatives a certificate of the Company and each
Guarantor, signed by the Vice President - Finance and Administration
and Secretary of the Company and each Guarantor, dated the Closing
Date, to the effect that the signers of such certificate have carefully
examined the Final Memorandum, any amendment or supplement to the Final
Memorandum and this Agreement and that:
(i) the representations and warranties of
the Company and the Guarantors in this Agreement are true and
correct on and as of the Closing Date with the same effect as
if made on the Closing Date, and the Company and the
Guarantors have complied with all the agreements and satisfied
all the conditions on their part to be performed or satisfied
hereunder at or prior to the Closing Date; and
(ii) since the date of the most recent
financial statements of the Company and Xxxxx included in the
Final Memorandum (exclusive of any amendment or supplement
thereto), there has been no material adverse change in the
condition (financial or otherwise), prospects, earnings,
business or properties of the Company, Xxxxx and their
Subsidiaries, taken as a whole, whether or not arising from
transactions in the ordinary course of business, except as set
forth in
20
or contemplated by the Final Memorandum (exclusive of any
amendment or supplement thereto).
(e) At the Execution Time and at the Closing Date,
the Company shall have requested and caused Ernst & Young LLP to
furnish to the Representatives letters, dated respectively as of the
Execution Time and as of the Closing Date, in form and substance
satisfactory to the Representatives, confirming that they are
independent accountants within the meaning of the Act and the Exchange
Act and the respective applicable rules and regulations adopted by the
Commission thereunder, that they have performed a review of the
unaudited interim financial information of each of the Company and its
consolidated Subsidiaries and Xxxxx and its consolidated Subsidiaries
for the three-month period ended March 31, 2002 and as of March 31,
2002 in accordance with Statement on Auditing Standards No. 71, and
stating in effect that:
(i) in their opinion the audited financial
statements and financial statement schedules and pro forma
financial statements included or incorporated by reference in
the Final Memorandum and reported on by them comply as to form
in all material respects with the applicable accounting
requirements of the Exchange Act and the related rules and
regulations adopted by the Commission thereunder;
(ii) on the basis of a reading of the latest
unaudited financial statements made available by the Company
and its Subsidiaries; their limited review in accordance with
the standards established under Statement on Auditing
Standards No. 71, of the unaudited interim financial
information for the three-month period ended March 31, 2002,
and as at March 31, 2002; carrying out certain specified
procedures (but not an examination in accordance with
generally accepted auditing standards) which would not
necessarily reveal matters of significance with respect to the
comments set forth in such letter; a reading of the minutes of
the meetings of the stockholders, directors and the audit,
compensation and nominating committees of the Company and its
Subsidiaries and Xxxxx and its Subsidiaries; and inquiries of
certain officials of the Company and Engle who have
responsibility for financial and accounting matters of the
Company and its Subsidiaries and Xxxxx and its Subsidiaries as
to transactions and events subsequent to December 31, 2001,
nothing came to their attention which caused them to believe
that:
(1) any unaudited financial
statements included or incorporated by reference in
the Final Memorandum do not comply as to form in all
material respects with applicable accounting
requirements and with the related rules and
regulations of the Commission with respect to
financial statements included; and said unaudited
financial statements are not in conformity with
generally accepted accounting principles applied on a
basis substantially consistent with that of the
audited financial statements included or incorporated
by reference in the Final Memorandum; or
21
(2) with respect to the period
subsequent to March 31, 2002, there were any changes,
at a specified date not more than five days prior to
the date of the letter, in the long-term debt of the
Company and its Subsidiaries or capital stock of the
Company or decreases in the total stockholders'
equity of the Company as compared with the amounts
shown on the March 31, 2002, consolidated balance
sheet included or incorporated by reference in the
Final Memorandum, or for the period from April 1,
2002 to such specified date there were any decreases,
as compared with the corresponding period in the
preceding quarter, in operating revenues or earnings
before income taxes or in total or per share amounts
of net earnings of the Company and its Subsidiaries,
except in all instances for changes or decreases set
forth in such letter, in which case the letter shall
be accompanied by an explanation by the Company as to
the significance thereof unless said explanation is
not deemed necessary by the Representatives; or
(3) with respect to the period
subsequent to March 31, 2002, there were any changes,
at a specified date not more than five days prior to
the date of the letter, in the long-term debt of
Xxxxx and its Subsidiaries or capital stock of Xxxxx
or decreases in the total stockholders' equity of
Xxxxx as compared with the amounts shown on the March
31, 2002, consolidated balance sheet included or
incorporated by reference in the Final Memorandum, or
for the period from April 1, 2002 to such specified
date there were any decreases, as compared with the
corresponding period in the preceding quarter, in
operating revenues or earnings before income taxes or
in total or per share amounts of net earnings of
Xxxxx and its Subsidiaries, except in all instances
for changes or decreases set forth in such letter, in
which case the letter shall be accompanied by an
explanation by Xxxxx as to the significance thereof
unless said explanation is not deemed necessary by
the Representatives; or
(iii) they have performed certain other
specified procedures as a result of which they determined that
certain information of an accounting, financial or statistical
nature (which is limited to accounting, financial or
statistical information derived from the general accounting
records of the Company, Xxxxx and their Subsidiaries) set
forth in the Final Memorandum, including the information set
forth under the captions "Newmark Selected Consolidated
Financial and Operating Data" and "Xxxxx Selected Consolidated
Financial and Operating Data" in the Final Memorandum and the
information included in "Management's Discussion and Analysis
of Financial Condition and Results of Operations" in the Final
Memorandum, and the information included or incorporated by
reference in the Company's and Xxxxx'x Annual Report on Form
10-K, incorporated by reference in the Final Memorandum, and
the information included or incorporated by reference in the
Company's and Xxxxx'x Quarterly Reports on Form 10-Q,
incorporated by reference in the Final Memorandum, agrees with
the accounting records of the Company and its
22
Subsidiaries or Xxxxx and its Subsidiaries, as the case may
be, excluding any questions of legal interpretation.
References to the Final Memorandum in this Section 6(e)
include any amendment or supplement thereto at the date of the
applicable letter.
(f) At the Execution Time and at the Closing Date,
the Company shall have requested and caused BDO Xxxxxxx, LLP to furnish
to the Representatives letters, dated respectively as of the Execution
Time and as of the Closing Date, in form and substance satisfactory to
the Representatives, confirming that they are independent accountants
within the meaning of the Act and the Exchange Act and the respective
applicable rules and regulations adopted by the Commission thereunder,
stating in effect that:
(i) they have performed certain specified
procedures as a result of which they determined that certain
information of an accounting, financial or statistical nature
(which is limited to accounting, financial or statistical
information derived from the general accounting records of the
Company and its Subsidiaries) set forth in the Final
Memorandum, including certain information included or
incorporated by reference in the Company's and Xxxxx'x Annual
Report on Form 10-K, incorporated by reference in the Final
Memorandum, agrees with the accounting records of the Company
and its Subsidiaries or Xxxxx and its Subsidiaries, as the
case may be, excluding any questions of legal interpretation;
and
(ii) they have performed certain other
specified procedures as a result of which they determined that
certain information of an accounting, financial or statistical
nature (which is limited to accounting, financial or
statistical information derived from the general accounting
records of the Company, Xxxxx and their Subsidiaries) set
forth in the Final Memorandum, including the information set
forth under the captions "Newmark Selected Consolidated
Financial and Operating Data" and "Xxxxx Selected Consolidated
Financial and Operating Data" in the Final Memorandum and the
information included in "Management's Discussion and Analysis
of Financial Condition and Results of Operations" in the Final
Memorandum, and the information included or incorporated by
reference in the Company's and Xxxxx'x Annual Report on Form
10-K, incorporated by reference in the Final Memorandum,
agrees with the accounting records of the Company and its
Subsidiaries or Xxxxx and its Subsidiaries, as the case may
be, excluding any questions of legal interpretation.
References to the Final Memorandum in this Section 6(f)
include any amendment or supplement thereto at the date of the applicable letter
(g) Subsequent to the Execution Time or, if earlier,
the dates as of which information is given in the Final Memorandum
(exclusive of any amendment or supplement thereto), there shall not
have been (i) any change, decrease or increase specified in the letter
or letters referred to in paragraphs (e) and (f) of this Section 6; or
23
(ii) any change, or any development involving a prospective change, in
or affecting the condition (financial or otherwise), prospects,
earnings, business or properties of (A) the Company and its
Subsidiaries prior to the Merger, taken as a whole, (B) Xxxxx, and its
Subsidiaries prior to the Merger, taken as a whole, or (C) the Company
and its Subsidiaries following the Merger, taken as a whole, whether or
not arising from transactions in the ordinary course of business,
except as set forth in or contemplated in the Final Memorandum
(exclusive of any amendment or supplement thereto) the effect of which,
in any case referred to in clause (i) or (ii) above, is, in the sole
judgment of the Representatives, so material and adverse as to make it
impractical or inadvisable to market the Securities as contemplated by
the Final Memorandum (exclusive of any amendment or supplement
thereto).
(h) The Notes and the Exchange Notes shall have been
designated as PORTAL-eligible securities in accordance with the rules
and regulations of the NASD, and the Notes and the Exchange Notes shall
be eligible for clearance and settlement through The Depositary Trust
Company.
(i) Subsequent to the Execution Time, there shall not
have been any decrease in the rating of any of the Company's debt
securities (including the Securities and the Exchange Securities) by
any "nationally recognized statistical rating organization" (as defined
for purposes of Rule 436(g) under the Act) or any notice given of any
intended or potential decrease in any such rating or of a possible
change in any such rating that does not indicate the direction of the
possible change.
(j) Prior to the Closing Date, the Company shall have
furnished to the Representatives such further information, certificates
and documents as the Representatives may reasonably request.
(k) The Merger Agreement shall be in full force and
effect; all conditions to the Merger shall have been satisfied without
waiver; and the Merger shall be consummated concurrently with the
closing of the Offering.
(l) The documents relating to the New Credit Facility
shall be in full force and effect; all conditions to funding under the
New Credit Facility shall have been satisfied without waiver.
(m) Xxxxx Homes, Inc. shall deposit concurrently with
the closing of the Offering sufficient money or U.S. government
securities to defease or discharge its 9 1/4% Senior Notes due 2008 in
accordance with the indenture for those notes and all conditions for
such defeasance shall have satisfied.
If any of the conditions specified in this Section 6 shall not
have been fulfilled in all material respects when and as provided in this
Agreement, or if any of the opinions and certificates mentioned above or
elsewhere in this Agreement shall not be in all material respects reasonably
satisfactory in form and substance to the Representatives and counsel for the
Initial Purchasers, this Agreement and all obligations of the Initial Purchasers
hereunder may be cancelled at, or at any time prior to, the Closing Date by the
Representatives. Notice of such
24
cancellation shall be given to the Company in writing or by telephone or
facsimile confirmed in writing.
The documents required to be delivered by this Section 6 shall
be delivered at the office of counsel for the Initial Purchasers, c/o Vinson &
Xxxxxx L.L.P., 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, on the Closing Date.
7. Reimbursement of Expenses. If the sale of the Securities
provided for herein is not consummated because any condition to the obligations
of the Initial Purchasers set forth in Section 6 hereof is not satisfied,
because of any termination pursuant to Section 10(i) hereof or because of any
refusal, inability or failure on the part of the Company or any Guarantor to
perform any agreement herein or comply with any provision hereof other than by
reason of a default by any of the Initial Purchasers, the Company will reimburse
the Initial Purchasers severally through Xxxxxxx Xxxxx Xxxxxx on demand for all
out-of-pocket expenses (including reasonable fees and disbursements of counsel)
that shall have been incurred by them in connection with the proposed purchase
and sale of the Securities.
8. Indemnification and Contribution.
(a) The Company and the Guarantors, jointly and
severally, agree to indemnify and hold harmless each Initial Purchaser,
the directors, officers, employees and agents of each Initial Purchaser
and each person who controls any Initial Purchaser within the meaning
of either the Act or the Exchange Act against any and all losses,
claims, damages or liabilities, joint or several, to which they or any
of them may become subject under the Act, the Exchange Act or other
Federal or state statutory law or regulation, at common law or
otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon any untrue
statement or alleged untrue statement of a material fact contained in
the Preliminary Memorandum, the Final Memorandum (or in any supplement
or amendment thereto) or any information provided by the Company or any
Guarantor to any holder or prospective purchaser of Securities pursuant
to Section 5(h), or in any amendment thereof or supplement thereto, or
arise out of or are based upon the omission or alleged omission to
state therein a material fact required to be stated therein or
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, and agrees to
reimburse each such indemnified party, as incurred, for any legal or
other expenses reasonably incurred by them in connection with
investigating or defending any such loss, claim, damage, liability or
action; provided, however, that the Company and the Guarantors will not
be liable in any such case to the extent that any such loss, claim,
damage or liability arises out of or is based upon any such untrue
statement or alleged untrue statement or omission or alleged omission
made in the Preliminary Memorandum or the Final Memorandum, or in any
amendment thereof or supplement thereto, in reliance upon and in
conformity with written information furnished to the Company by or on
behalf of any Initial Purchasers through the Representatives
specifically for inclusion therein. This indemnity agreement will be in
addition to any liability which the Company and the Guarantors may
otherwise have.
25
(b) Each Initial Purchaser severally and not jointly
agrees to indemnify and hold harmless the Company, the Guarantors, each
of its or their directors, each of its or their officers, and each
person who controls the Company or any Guarantor within the meaning of
either the Act or the Exchange Act, to the same extent as the foregoing
indemnity from the Company and the Guarantors to each Initial
Purchaser, but only with reference to written information relating to
such Initial Purchaser furnished to the Company and the Guarantors by
or on behalf of such Initial Purchaser through the Representatives
specifically for inclusion in the Preliminary Memorandum or the Final
Memorandum (or in any amendment or supplement thereto). This indemnity
agreement will be in addition to any liability which any Initial
Purchaser may otherwise have. The Company and the Guarantors
acknowledge that the statements set forth in the last paragraph of the
cover page regarding the delivery of the Securities and, under the
heading "Plan of Distribution," the paragraph related to
over-allotment, covering and stabilization transactions in the
Preliminary Memorandum and the Final Memorandum, constitute the only
information furnished in writing by or on behalf of the Initial
Purchasers for inclusion in the Preliminary Memorandum or the Final
Memorandum (or in any amendment or supplement thereto).
(c) Promptly after receipt by an indemnified party
under this Section 8 of notice of the commencement of any action, such
indemnified party will, if a claim in respect thereof is to be made
against the indemnifying party under this Section 8, notify the
indemnifying party in writing of the commencement thereof; but the
failure so to notify the indemnifying party (i) will not relieve it
from liability under paragraph (a) or (b) above unless and to the
extent it did not otherwise learn of such action and such failure
results in the forfeiture by the indemnifying party of substantial
rights and defenses; and (ii) will not, in any event, relieve the
indemnifying party from any obligations to any indemnified party other
than the indemnification obligation provided in paragraph (a) or (b)
above. The indemnifying party shall be entitled to appoint counsel of
the indemnifying party's choice at the indemnifying party's expense to
represent the indemnified party in any action for which indemnification
is sought (in which case the indemnifying party shall not thereafter be
responsible for the fees and expenses of any separate counsel retained
by the indemnified party or parties except as set forth below);
provided, however, that such counsel shall be satisfactory to the
indemnified party. Notwithstanding the indemnifying party's election to
appoint counsel to represent the indemnified party in an action, the
indemnified party shall have the right to employ separate counsel
(including local counsel), and the indemnifying party shall bear the
reasonable fees, costs and expenses of such separate counsel if (i) the
use of counsel chosen by the indemnifying party to represent the
indemnified party would present such counsel with a conflict of
interest; (ii) the actual or potential defendants in, or targets of,
any such action include both the indemnified party and the indemnifying
party and the indemnified party shall have reasonably concluded that
there may be legal defenses available to it and/or other indemnified
parties which are different from or additional to those available to
the indemnifying party; (iii) the indemnifying party shall not have
employed counsel satisfactory to the indemnified party to represent the
indemnified party within a reasonable time after notice of the
institution of such action; or (iv) the indemnifying party shall
authorize the indemnified party to employ separate counsel at the
expense of the indemnifying party. An indemnifying party will not,
without the prior
26
written consent of the indemnified parties, settle or compromise or
consent to the entry of any judgment with respect to any pending or
threatened claim, action, suit or proceeding in respect of which
indemnification or contribution may be sought hereunder (whether or not
the indemnified parties are actual or potential parties to such claim
or action) unless such settlement, compromise or consent includes an
unconditional release of each indemnified party from all liability
arising out of such claim, action, suit or proceeding. An indemnifying
party shall not be liable under this Section 8 to any indemnified party
regarding any settlement or compromise or consent to the entry of any
judgment with respect to any pending or threatened claim, action, suit
or proceeding in respect of which indemnification or contribution may
be sought hereunder (whether or not the indemnified parties are actual
or potential parties to such claim or action) unless such settlement,
compromise or consent is consented to by such indemnifying party, which
consent shall not be unreasonably withheld.
(d) In the event that the indemnity provided in
paragraph (a) or (b) of this Section 8 is unavailable to or
insufficient to hold harmless an indemnified party for any reason, the
Company, the Guarantors and the Initial Purchasers agree to contribute
to the aggregate losses, claims, damages and liabilities (including
legal or other expenses reasonably incurred in connection with
investigating or defending same) (collectively "Losses") to which the
Company or any Guarantor, and one or more of the Initial Purchasers may
be subject in such proportion as is appropriate to reflect the relative
benefits received by the Company and the Guarantors on the one hand and
by the Initial Purchasers on the other from the offering of the
Securities; provided, however, that in no case shall any Initial
Purchaser (except as may be provided in any agreement among the Initial
Purchasers relating to the offering of the Securities) be responsible
for any amount in excess of the purchase discount or commission
applicable to the Securities purchased by such Initial Purchaser
hereunder. If the allocation provided by the immediately preceding
sentence is unavailable for any reason, the Company, the Guarantors and
the Initial Purchasers shall contribute in such proportion as is
appropriate to reflect not only such relative benefits but also the
relative fault of the Company and the Guarantors on the one hand and of
the Initial Purchasers on the other in connection with the statements
or omissions which resulted in such Losses, as well as any other
relevant equitable considerations. Benefits received by the Company and
the Guarantors shall be deemed to be equal to the total net proceeds
from the offering (before deducting expenses) received by the Company,
and benefits received by the Initial Purchasers shall be deemed to be
equal to the total purchase discounts and commissions in each case set
forth on the cover page of the Final Memorandum. Relative fault shall
be determined by reference to, among other things, whether any untrue
or any alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information
provided by the Company or a Guarantor on the one hand or the Initial
Purchasers on the other, the intent of the parties and their relative
knowledge, access to information and opportunity to correct or prevent
such untrue statement or omission. The Company, the Guarantors and the
Initial Purchasers agree that it would not be just and equitable if
contribution were determined by pro rata allocation or any other method
of allocation which does not take account of the equitable
considerations referred to above. Notwithstanding the provisions of
this paragraph (d), no person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Act) shall be entitled to
contribution from any person
27
who was not guilty of such fraudulent misrepresentation. For purposes
of this Section 8, each person who controls an Initial Purchaser within
the meaning of either the Act or the Exchange Act and each director,
officer, employee and agent of an Initial Purchaser shall have the same
rights to contribution as such Initial Purchaser, and each person who
controls the Company or a Guarantor within the meaning of either the
Act or the Exchange Act and each officer and director of the Company
and any Guarantor shall have the same rights to contribution as the
Company and the Guarantors, subject in each case to the applicable
terms and conditions of this paragraph (d).
9. Default by an Initial Purchaser. If any one or more Initial
Purchasers shall fail to purchase and pay for any of the Securities agreed to be
purchased by such Initial Purchaser hereunder and such failure to purchase shall
constitute a default in the performance of its or their obligations under this
Agreement, the remaining Initial Purchasers shall be obligated severally to take
up and pay for (in the respective proportions which the amount of Securities set
forth opposite their names in Schedule I hereto bears to the aggregate amount of
Securities set forth opposite the names of all the remaining Initial Purchasers)
the Securities which the defaulting Initial Purchaser or Initial Purchasers
agreed but failed to purchase; provided, however, that in the event that the
aggregate amount of Securities which the defaulting Initial Purchaser or Initial
Purchasers agreed but failed to purchase shall exceed 10% of the aggregate
amount of Securities set forth in Schedule I hereto, the remaining Initial
Purchasers shall have the right to purchase all, but shall not be under any
obligation to purchase any, of the Securities, and if such nondefaulting Initial
Purchasers do not purchase all the Securities, this Agreement will terminate
without liability to any nondefaulting Initial Purchaser or the Company or the
Guarantors. In the event of a default by any Initial Purchaser as set forth in
this Section 9, the Closing Date shall be postponed for such period, not
exceeding five Business Days, as the Representatives shall determine in order
that the required changes in the Final Memorandum or in any other documents or
arrangements may be effected. Nothing contained in this Agreement shall relieve
any defaulting Initial Purchaser of its liability, if any, to the Company, the
Guarantors or any nondefaulting Initial Purchaser for damages occasioned by its
default hereunder.
10. Termination. This Agreement shall be subject to
termination in the absolute discretion of the Representatives, by notice given
to the Company prior to delivery of and payment for the Securities, if at any
time prior to such time (i) trading in the Company's Common Stock shall have
been suspended by the Commission or the Nasdaq National Market; (ii) trading in
securities generally on the New York Stock Exchange or the Nasdaq National
Market shall have been suspended or limited or minimum prices shall have been
established on such Exchange or on the Nasdaq National Market; (iii) a banking
moratorium shall have been declared either by Federal or New York State
authorities; or (iv) there shall have occurred any outbreak or escalation of
hostilities, declaration by the United States of a national emergency or war or
other calamity or crisis the effect of which on financial markets is such as to
make it, in the sole judgment of the Representatives, impracticable or
inadvisable to proceed with the offering or delivery of the Securities as
contemplated by the Final Memorandum (exclusive of any amendment or supplement
thereto).
11. Representations and Indemnities to Survive. The respective
agreements, representations, warranties, indemnities and other statements of the
Company, the Guarantors or its or their officers and of the Initial Purchasers
set forth in or made pursuant to this Agreement
28
will remain in full force and effect, regardless of any investigation made by or
on behalf of the Initial Purchasers, the Company, the Guarantors or any of the
officers, directors, employees, agents or controlling persons referred to in
Section 8 hereof, and will survive delivery of and payment for the Securities.
The provisions of Sections 7 and 8 hereof shall survive the termination or
cancellation of this Agreement.
12. Notices. All communications hereunder will be in writing
and effective only on receipt, and, if sent to the Representatives, will be
mailed, delivered or telefaxed to the Xxxxxxx Xxxxx Xxxxxx General Counsel (fax
no.: (000) 000-0000) and confirmed to the General Counsel, Xxxxxxx Xxxxx Xxxxxx,
at 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, 00000, Attention: General Counsel;
or, if sent to the Company or any Guarantor, will be mailed, delivered or
telefaxed to 000-000-0000 and confirmed to it at 0000 Xxxxxxxx Xxxxx Xxxxx,
Xxxxx 000, Xxxxx Xxxx, Xxxxx 00000, attention of the General Counsel.
13. Successors. This Agreement will inure to the benefit of
and be binding upon the parties hereto and their respective successors and the
officers, directors, employees, agents and controlling persons referred to in
Section 8 hereof, and, except as expressly set forth in Section 5(h) hereof, no
other person will have any right or obligation hereunder.
14. Applicable Law. This Agreement will be governed by and
construed in accordance with the laws of the State of New York applicable to
contracts made and to be performed within the State of New York.
15. Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall constitute an original and all of which
together shall constitute one and the same instrument.
16. Headings. The section headings used herein are for
convenience only and shall not affect the construction hereof.
17. Definitions. The terms which follow, when used in this
Agreement, shall have the meanings indicated.
"Act" shall mean the Securities Act of 1933, as amended, and
the rules and regulations of the Commission promulgated thereunder.
"Affiliate" shall have the meaning specified in Rule 501(b) of
Regulation D.
"Business Day" shall mean any day other than a Saturday, a
Sunday or a legal holiday or a day on which banking institutions or trust
companies are authorized or obligated by law to close in The City of New York.
"Capital Stock" means, with respect to any Person, any shares
or other equivalents (however designated) of any class of corporate stock or
partnership interests or any other participations, rights, warrants, options or
other interests in the nature of an equity interest in such Person, including
preferred stock, but excluding any debt security convertible or exchangeable
into such equity interest.
29
"Commission" shall mean the Securities and Exchange
Commission.
"Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended, and the rules and regulations of the Commission promulgated
thereunder.
"Execution Time" shall mean the date and time that this
Agreement is executed and delivered by the parties hereto.
"Investment Company Act" shall mean the Investment Company Act
of 1940, as amended, and the rules and regulations of the Commission promulgated
thereunder.
"Material Adverse Effect" means a material adverse effect on
the condition (financial or otherwise), prospects, earnings, business or
properties of the Company and its Subsidiaries (including Xxxxx) following the
Merger, taken as a whole.
"Merger Agreement" the Agreement and Plan of Merger dated
April 5, 2002 between the Company, Xxxxx and Technical Olympic USA, Inc.
"NASD" shall mean the National Association of Securities
Dealers, Inc.
"Person" shall mean any individual, corporation, company
(including any limited liability company), association, partnership, joint
venture, trust, unincorporated organization, government or any agency or
political subdivision thereof or any other entity.
"Regulation D" shall mean Regulation D under the Act.
"Regulation S" shall mean Regulation S under the Act.
"Xxxxxxx Xxxxx Xxxxxx" shall mean Xxxxxxx Xxxxx Xxxxxx Inc.
"Subsidiary" shall mean in respect of any Person, any
corporation, company (including any limited liability company), association,
partnership, joint venture, trust, unincorporated organization or other business
entity of which a majority of the total voting power of all classes of Capital
Stock of then outstanding and normally entitled (without regard to the
occurrence of any contingency) to vote in the election of directors, managers or
trustees thereof, is at the time owned or controlled, directly or indirectly,
by:
(a) such Person,
(b) such Person and one or more Subsidiaries of such Person,
or
(c) one or more Subsidiaries of such Person.
"Trust Indenture Act" shall mean the Trust Indenture Act of
1939, as amended, and the rules and regulations of the Commission promulgated
thereunder.
30
If the foregoing is in accordance with your understanding of
our agreement, please sign and return to us the enclosed duplicate hereof,
whereupon this Agreement and your acceptance shall represent a binding agreement
among the Company, the Guarantors and the several Initial Purchasers.
Very truly yours,
NEWMARK HOMES CORP.
By: /s/ XXXXX X. XxXXXX
------------------------------------------
Name: Xxxxx X. XxXxxx
Title: Vice President - Finance and
Administration and Chief Financial
Officer
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
XXXXXXX XXXXX XXXXXX INC.
DEUTSCHE BANK SECURITIES INC.
FLEET SECURITIES, INC.
By: XXXXXXX XXXXX XXXXXX INC.
By: /s/ XXXXXXX XXXXXXXXXX
----------------------------
Name: Xxxxxxx Xxxxxxxxxx
Title: Director
For themselves and the other several Initial
Purchasers named in Schedule I to
the foregoing Agreement.
31
SUBSIDIARY GUARANTORS:
XXXXX REALTY CO.
ADRO CONST., INC.
NEWMARK FINANCE AFFILIATE, LTD.
NEWMARK FINANCE CORPORATION
NEWMARK HOME CORPORATION
NEWMARK HOMES BUSINESS TRUST
NEWMARK HOMES X.X.
XXXXXXX HOMES PURCHASING, L.P.
NHC HOMES, INC.
NMH INVESTMENTS, INC.
PACIFIC UNITED DEVELOPMENT CORP.
PACIFIC UNITED L.P.
PUDC, INC.
TAP ACQUISITION CO.
THE XXXXX COMPANIES, INC.
BANYAN TRAILS, INC.
XXXXX HOMES DELAWARE, INC.
XXXXX HOMES FINANCING, INC.
XXXXX HOMES REALTY, INC.
XXXXX HOMES, INC.
XXXXX HOMES/ARIZONA CONSTRUCTION, INC.
XXXXX HOMES/ARIZONA, INC.
XXXXX HOMES/ATLANTA, INC.
XXXXX HOMES/BROWARD, INC.
XXXXX HOMES/COLORADO, INC.
XXXXX HOMES/GEORGIA, INC.
XXXXX HOMES/GULF COAST, INC.
XXXXX HOMES/JACKSONVILLE, INC.
XXXXX HOMES/XXXX XXXXXXXXXX, INC.
XXXXX HOMES/NORTH CAROLINA, INC.
XXXXX HOMES/ORLANDO, INC.
XXXXX HOMES/PALM BEACH, INC.
XXXXX HOMES/PEMBROKE, INC.
XXXXX HOMES/SOUTHWEST FLORIDA, INC.
XXXXX HOMES/TEXAS, INC.
XXXXX HOMES/VIRGINIA, INC.
XXXXXXXXX HOMES, INC.
PEMBROKE FALLS REALTY, INC.
PREFERRED BUILDERS REALTY, INC.
PREFERRED HOME MORTGAGE COMPANY
PRESTIGE ABSTRACT & TITLE, LLC
PROFESSIONAL ADVANTAGE TITLE, LTD.
ST. TROPEZ AT BOCA GOLF, INC.
SILVERLAKE INTERESTS, L.C.
TECHNICAL MORTGAGE, L.P.
TM INVESTMENTS, L.L.C.
UNIVERSAL LAND TITLE, INC.
UNIVERSAL LAND TITLE AGENCY, INC.
UNIVERSAL LAND TITLE INVESTMENT #1, L.L.C.
UNIVERSAL LAND TITLE INVESTMENT #2, L.L.C.
UNIVERSAL LAND TITLE INVESTMENT #3, L.L.C.
UNIVERSAL LAND TITLE INVESTMENT #4, L.L.C.
UNIVERSAL LAND TITLE OF SOUTH FLORIDA, LTD.
UNIVERSAL LAND TITLE OF TEXAS, INC.
UNIVERSAL LAND TITLE OF THE PALM BEACHES, LTD.
UNIVERSAL LAND TITLE OF VIRGINIA, INC.
By: /s/ Xxxxx X. XxXxxx
-------------------------------------------
Name: Xxxxx X. XxXxxx
Title: Vice President - Finance and
Administration
32
SCHEDULE I
Principal Amount Of Principal Amount Of
2010 Notes 2012 Notes
Initial Purchasers To Be Purchased To Be Purchased
------------------ ------------------- -------------------
Xxxxxxx Xxxxx Xxxxxx Inc....................... $ 122,000,000 $ 91,500,000
Deutsche Bank Securities Inc................... 58,000,000 43,500,000
Fleet Securities, Inc.......................... 20,000,000 15,000,000
-------------- -------------
Total................................. $ 200,000,000 $150,000,000
33
SCHEDULE II
The Company does not own all of the outstanding shares of
capital stock or partnership interests of the following Subsidiaries of the
Company and Xxxxx:
XxXxx Landing, L.L.C.
Xxxxx/Xxxxx, X.X.X.
SPV Developers, L.L.C.
Spring Park Village, L.P.
SOT Developers, LLC
Silver Oak Trails, L.P.
WPines Developers, L.L.C.
Woodland Pines, L.P.
Universal Land Title of the Palm Beaches, Ltd.
Professional Advantage Title, Ltd.
Prestige Abstract & Title, L.L.C.
Universal Land Title of South Florida, Ltd.
The following Subsidiaries have: (i) rights of first refusal,
first offer, preferential purchase rights and other similar rights in favor of
the parties, (ii) consent rights for the admission of new partners or members
and (iii) consent rights and/or prohibitions on the sale, disposition, transfer
or encumbrance by a party or the admission of a transferee as a partner or
member, as applicable:
Universal Land Title of the Palm Beaches, Ltd.
Professional Advantage Title, Ltd.
Prestige Abstract & Title, L.L.C.
Universal Land Title of South Florida, Ltd.
Pacific United, L.P.
Technical Mortgage, X.X.
XxXxx Landing, L.L.C.
Xxxxx/Xxxxx, X.X.X.
SPV Developers, L.L.C.
Spring Park Village, L.P.
SOT Developers, LLC
Silver Oak Trails, L.P.
WPines Developers, L.L.C.
Woodland Pines, X.X.
Xxxxx Homes Reinsurance Limited
34
SCHEDULE III
All documents filed as exhibits to the Form 10-K for the year ended
December 31, 2001 and all subsequent Forms 10-Qs and 8-Ks for the Company and
Xxxxx and, in any event, including, to the extent the Company or Xxxxx or any of
their Subsidiaries is a party thereto, (i) any agreements governing indebtedness
for borrowed money and related security agreements, (ii) material land bank
agreements; (iii) material agreements with Affiliates; (iv) engagement letters
with investment banks; and (v) other agreements involving payments to or by the
Company or Xxxxx in excess of $10.0 million in 2001 or anticipated for 2002 or
thereafter, but in any event excluding supply agreements entered into in the
ordinary course of business.
35
EXHIBIT A
SPV Developers L.L.C.
Spring Park Village, L.P.
SOT Developers, LLC
Silver Oak Trails, L.P.
WPines Developers, L.L.C.
Woodland Pines, X.X.
Xxxxx/Xxxxx, X.X.X.
XxXxx Landing L.L.C
36
EXHIBIT B
Selling Restrictions for Offers and
Sales Outside the United States
(1)(a) The Securities have not been and will not be registered
under the Act and may not be offered or sold within the United States or to, or
for the account or benefit of, U.S. persons except in accordance with Regulation
S under the Act or pursuant to an exemption from the registration requirements
of the Act. Each Initial Purchaser represents and agrees that, except as
otherwise permitted by Section 4(a)(i), it has offered and sold the Securities,
and will offer and sell the Securities, (i) as part of their distribution at any
time; and (ii) otherwise until 40 days after the later of the commencement of
the offering and the date of the original issuance of the Securities, only in
accordance with Rule 903 of Regulation S under the Act. Accordingly, each
Initial Purchaser represents and agrees that neither it, nor any of its
Affiliates nor any person acting on its or their behalf has engaged or will
engage in any directed selling efforts with respect to the Securities, and that
it and they have complied and will comply with the offering restrictions
requirement of Regulation S. Each Initial Purchaser agrees that, at or prior to
the confirmation of sale of Securities sold in reliance on Regulation S, it
shall have sent to each distributor, dealer or person receiving a selling
concession, fee or other remuneration that purchases Securities from it during
the distribution compliance period a confirmation or notice to substantially the
following effect:
"The Securities covered hereby have not been registered under
the U.S. Securities Act of 1933 (the "Act") and may not be
offered or sold within the United States or to, or for the
account or benefit of, U.S. persons (i) as part of their
distribution at any time or (ii) otherwise until 40 days after
the later of the commencement of the offering and of the
Securities and the date of the original issuance of the
Securities, except in either case in accordance with
Regulation S or Rule 144A under the Act. Terms used above have
the meanings given to them by Regulation S."
(b) Each Initial Purchaser also represents and agrees that it
has not entered and will not enter into any contractual arrangement
with any distributor with respect to the distribution of the
Securities, except with its Affiliates or with the prior written
consent of the Company.
(c) Terms used in this section have the meanings given to them
by Regulation S.
(2) Each Initial Purchaser represents and agrees that (i) it
has not offered or sold and prior to the expiry of six months from the closing
of the offering of the Securities, will not offer or sell any Securities to
persons in the United Kingdom, except to persons whose ordinary activities
involve them in acquiring, holding, managing or disposing of investments (as
principal or agent) for the purposes of their businesses or otherwise in
circumstances which have not resulted and will not result in an offer to the
public in the United Kingdom within the meaning of the Public Offers of
Securities Regulations 1995; (ii) it has complied and will comply with all
applicable provisions of the Financial Services and Markets Act 2000 (the
"FSMA") with respect
37
to anything done by it in relation to the Securities in, from or otherwise
involving the United Kingdom; and (iii) it has only communicated or caused to be
communicated and will only communicate or cause to be communicated any
invitation or inducement to engage in investment activity (within the meaning of
section 21 of the FSMA) received by it in connection with the issue or sale of
any Securities in circumstances in which section 21(1) of the FSMA would not
apply to the Company.
38
