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EXHIBIT 1.1
XXXXXXX AND BROAD HOME CORPORATION
(a Delaware Corporation)
KBHC FINANCING I
(a Delaware Business Trust)
__,000,000 FELINE PRIDES(SM)
and
__,000 Capital Securities
FORM OF UNDERWRITING AGREEMENT
Dated: __, 1998
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(SM) Service xxxx of Xxxxxxx Xxxxx & Co., Inc.
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XXXXXXX AND BROAD HOME CORPORATION
(a Delaware Corporation)
KBHC FINANCING I
(a Delaware Business Trust)
__,000,000 FELINE PRIDES(SM)
(Stated Amount of $10 per FELINE PRIDES)
consisting of
__,000 Income PRIDES(SM)
each consisting of
a Purchase Contract of Xxxxxxx and Broad Home Corporation Requiring
the Purchase on __, 2001 (or earlier) of certain Shares
of Common Stock of Xxxxxxx and Broad Home Corporation
and
a __% Capital Security of KBHC Financing I
and
__,000 Growth PRIDES(SM)
each consisting of
a Purchase Contract of Xxxxxxx and Broad Home Corporation Requiring
the Purchase on __, 2001 (or earlier) of certain Shares
of Common Stock of Xxxxxxx and Broad Home Corporation
and
a 1/100 Undivided Beneficial Interest in a Zero-Coupon U.S.
Treasury Security Having a Principal Amount Equal
to $1,000 and maturing on __ 2001;
and
__,000 __% Capital Securities of
KBHC Financing I (Liquidation Amount $10 per
Capital Security)
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__, 1998
XXXXXXX XXXXX & CO.
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX
INCORPORATED
XXXXXXXXX, LUFKIN & XXXXXXXX SECURITIES CORPORATION
As Representatives of the Several Underwriters
x/x Xxxxxxx Xxxxx & Xx.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
Xxxxxxx Xxxxx World Headquarters
World Financial Center
Xxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Ladies and Gentlemen:
Xxxxxxx and Broad Home Corporation, a Delaware corporation (the
"Company"), and KBHC Financing I, a Delaware statutory business trust (the
"Trust" and, together with the Company, the "Offerors"), confirm their agreement
with Xxxxxxx Xxxxx & Co., Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated and
each of the other Underwriters named in Schedule A hereto (collectively, the
"Underwriters", which term shall also include any underwriter substituted as
hereinafter provided in Section 10 hereof), for whom Xxxxxxx Xxxxx and
Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities Corporation are acting as
representatives (in such capacity, the "Representatives"), with respect to the
issue and sale by the Offerors and the purchase by the Underwriters, acting
severally and not jointly, of the respective numbers of the FELINE PRIDES and
__% Capital Securities of the Trust (the "Capital Securities") set forth in said
Schedule A (collectively, the "Initial Securities"). The FELINE PRIDES will
initially consist of (A) __,000 units (referred to as "Income PRIDES") with a
stated amount, per Income PRIDES, of $__ (the "Stated Amount") and (B) __,000
units (referred to as "Growth PRIDES") with a stated amount, per Growth PRIDES,
equal to the Stated Amount. Each Income PRIDES will initially consist of a unit
comprised of (a) a stock purchase contract (a "Purchase Contract") under which
(i) the holder will purchase from the Company on __ 2001 (the "Purchase Contract
Settlement Date"), for an amount of cash equal to the Stated Amount, a number of
newly issued shares of common stock, $1.00 par value per share ("Common Stock"),
of the Company equal to the Settlement Rate (as defined in the __), and (ii) the
Company will pay the holder unsecured contract adjustment payments ("Contract
Adjustment Payments") at the rate of __% of the Stated Amount per annum and (b)
beneficial ownership of a Capital Security. Each Growth PRIDES will initially
consist of a unit comprised of (a) a Purchase Contract under which (i) the
holder will purchase from the Company on the Purchase Contract Settlement Date,
for an amount in cash equal to the Stated Amount, the number of shares of Common
Stock of the Company equal to the Settlement Rate, and (ii) the Company will pay
the holder Contract Adjustment Payments, at the rate of
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__% of the Stated Amount per annum, and (b) a 1/100 undivided beneficial
interest in a zero-coupon U.S. Treasury Security (CUSIP No. __) in a principal
amount at maturity equal to $1,000 payable on __ 2001 (the "Treasury
Securities"). The Company and the Trust also confirm their agreement to grant to
the Underwriters, acting severally and not jointly, of the option described in
Section 2(b) hereof to purchase all or any part of __,000 additional Income
PRIDES, __,000 additional Growth PRIDES and __,000 additional Capital Securities
(the "Option Securities" and, together with the Initial Securities, the
"Securities") to cover over-allotments, if any. The Capital Securities which
will initially constitute a component of the Income PRIDES are hereinafter
sometimes called the "Underlying Capital Securities," and Capital Securities
which initially are not Underlying Capital Securities are hereinafter sometimes
called the "Separate Capital Securities." In accordance with the terms of the
Purchase Contract Agreement (as defined below), to be dated as of __, 1998,
between the Company and The First National Bank of Chicago, as Purchase Contract
Agent (the "Purchase Contract Agent"), the Capital Securities constituting a
part of the Income PRIDES, and the Treasury Securities constituting a part of
the Growth PRIDES will be pledged by the Purchase Contract Agent, on behalf of
the holders of the Securities that are Income PRIDES and Growth PRIDES,
respectively, to The Bank of New York, as Collateral Agent (the "Collateral
Agent"), pursuant to the Pledge Agreement, to be dated as of __, 1998 (the
"Pledge Agreement"), among the Company, the Purchase Contract Agent and the
Collateral Agent, to secure the holders' obligation to purchase Common Stock
under the Purchase Contracts. The shares of Common Stock issuable pursuant to
the Purchase Contracts are hereinafter called the "Shares".
The Capital Securities and Common Securities (as defined below) will be
guaranteed by the Company with respect to distributions and payments upon
liquidation, redemption and otherwise (the "Guarantee") pursuant to the
Guarantee Agreement, to be dated as of __, 1998 (the "Guarantee Agreement"),
between the Company and The First National Bank of Chicago, as trustee (the
"Guarantee Trustee"), for the benefit of the holders from time to time of the
Capital Securities and the Common Securities, and certain back-up undertakings
of the Company. All of the net proceeds from the sale of the Capital Securities
will be combined with the entire net proceeds from the sale by the Trust to the
Company of its common securities (the "Common Securities" and, together with the
Capital Securities, the "Trust Securities") and will be used by the Trust to
purchase the __% Debentures due __ 2003 (the "Debentures") of the Company. The
Trust Securities will be issued pursuant to the amended and restated declaration
of trust of the Trust, to be dated as of __, 1998 (the "Declaration"), among the
Company, as Sponsor, __ and __ (the "Regular Trustees"), and The First National
Bank of Chicago, as the institutional trustee (the "Institutional Trustee"), and
First Chicago Delaware, Inc., as the Delaware trustee (the "Delaware Trustee"
and, together with the Institutional Trustee and the Regular Trustees, the
"Trustees"), and the holders from time to time of undivided beneficial interests
in the assets of the Trust. The Debentures will be issued pursuant to the
Indenture, to be dated as of __, 1998 (the "Base Indenture"), between the
Company and The First National Bank of Chicago, as trustee (the "Debt Trustee"),
as amended and supplemented by the First Supplemental Indenture, to be dated as
of __, 1998, between the Company and the Debt Trustee (the Base Indenture, as
supplemented and amended by such First Supplemental Indenture, being referred to
as the "Indenture").
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The Company and the Trust have entered into a Common Securities Purchase
Agreement dated as of __, 1998 (the "Common Securities Purchase Agreement")
pursuant to which the Trust will sell to the Company, and the Company will
purchase from the Trust, the Common Securities, and a Debenture Purchase
Agreement dated as of __, 1998 (the "Debenture Purchase Agreement") pursuant to
which the Trust will purchase from the Company, and the Company will sell to the
Trust, the Debentures.
Pursuant to a Remarketing Agreement (the "Remarketing Agreement") to be
dated as of __, 1998, among the Company, the Trust, the Purchase Contract Agent
and a nationally recognized investment banking firm chosen by the Company, the
Capital Securities may be remarketed, subject to certain terms and conditions.
As used in this Agreement, the term "Operative Documents" means this
Agreement, the Purchase Contract Agreement, the Securities, the Pledge
Agreement, the Remarketing Agreement, the Declaration, the Trust Securities, the
Guarantee, the Indenture, the Debentures, the Common Securities Purchase
Agreement and the Debenture Purchase Agreement; and all references to the
Operative Documents to which the Company is a party (and all references of like
import) shall include, without limitation, the Income PRIDES, the Growth PRIDES
and the Debentures, and all references to the Operative Documents to which the
Trust is a party shall include, without limitation, the Trust Securities.
The Company and the Trust have filed with the Securities and Exchange
Commission (the "Commission") a registration statement on Form __ and
pre-effective amendment no. 1 and __ thereto covering the registration of the
Securities (including the Purchase Contracts), the Capital Securities, the
Guarantee, the Debentures and the Shares under the Securities Act of 1933, as
amended (the "1933 Act"), including the related preliminary prospectus or
prospectuses. Promptly after execution and delivery of this Agreement, the
Company and the Trust will either (i) prepare and file a prospectus in
accordance with the provisions of Rule 430A ("Rule 430A") of the rules and
regulations of the Commission under the 1933 Act (the "1933 Act Regulations")
and paragraph (b) of Rule 424 ("Rule 424(b)") of the 1933 Act Regulations or
(ii) if the Company and the Trust have elected to rely upon Rule 434 ("Rule
434") of the 1933 Act Regulations, prepare and file a term sheet (a "Term
Sheet") in accordance with the provisions of Rule 434 and Rule 424(b). The
information included in such prospectus or in such Term Sheet, as the case may
be, that was omitted from such registration statement at the time it became
effective but that is deemed to be part of such registration statement at the
time it became effective (a) pursuant to paragraph (b) of Rule 430A is referred
to as "Rule 430A Information" or (b) pursuant to paragraph (d) of Rule 434 is
referred to as "Rule 434 Information". Each prospectus used before such
registration statement became effective, and any prospectus that omitted, as
applicable, the Rule 430A Information or the Rule 434 Information, that was used
after such effectiveness and prior to the execution and delivery of this
Agreement, in each case including the documents incorporated or deemed to be
incorporated by reference therein, is herein called a "preliminary prospectus".
Such registration statement, including the exhibits thereto, schedules thereto,
if any, and the documents incorporated by reference therein pursuant to Item 12
of Form S-3 under the 1933 Act, at the time it became effective and including
the Rule 430A Information
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and the Rule 434 Information, as applicable, is herein called the "Registration
Statement." Any registration statement filed pursuant to Rule 462(b) of the 1933
Act Regulations is herein referred to as the "Rule 462(b) Registration
Statement", and after such filing the term "Registration Statement" shall
include the Rule 462(b) Registration Statement. The final prospectus, including
the documents incorporated by reference therein pursuant to Item 12 of From S-3
under the 1933 Act, in the form first furnished to the Underwriters for use in
connection with the offering of the Securities is herein called the
"Prospectus". If Rule 434 is relied on, the term "Prospectus" shall refer to the
preliminary prospectus dated __, 1998 together with the Term Sheet, and all
references in this Agreement to the date of the Prospectus shall mean the date
of the Term Sheet. For purposes of this Agreement, all references to the
Registration Statement, any preliminary prospectus, the Prospectus or any Term
Sheet or any amendment or supplement to any of the foregoing shall be deemed to
include the copy filed with the Commission pursuant to its Electronic Data
Gathering, Analysis and Retrieval system ("XXXXX").
All references in this Agreement to financial statements and schedules and
other information which is "contained," "included" or "stated" in the
Registration Statement, any preliminary prospectus or the Prospectus (or other
references of like import) shall be deemed to mean and include all such
financial statements and schedules and other information which is incorporated
or deemed to be incorporated by reference in the Registration Statement, any
preliminary prospectus or the Prospectus, as the case may be; and all references
in this Agreement to amendments or supplements to the Registration Statement,
any preliminary prospectus or the Prospectus shall be deemed to mean and include
the filing of any document under the Securities Exchange Act of 1934 Act, as
amended (the "1934 Act"), which is incorporated or deemed to be incorporated by
reference in the Registration Statement, such preliminary prospectus or the
Prospectus, as the case may be.
The Offerors understand that the Underwriters propose to make a public
offering of the Securities as soon as the Underwriters deem advisable after this
Agreement has been executed and delivered and the Declaration, the Indenture and
the Guarantee Agreement have been qualified under the Trust Indenture Act of
1939, as amended (the "1939 Act").
SECTION 1. Representations and Warranties.
(a) The Offerors jointly and severally represent and warrant to each
Underwriter as of the date hereof, as of the Closing Time referred to in Section
2(d) hereof and as of each Date of Delivery (if any) referred to in Section 2(b)
hereof (the Closing Time and each Date of Delivery (if any) are hereinafter
called, individually, a "Representation Date"), and agrees with each
Underwriter, as follows:
(i) The Company and the Trust meet the requirements for the use of
Form S-3 under the 1933 Act. Each of the Registration Statement and any Rule
462(b) Registration Statement has become effective under the 1933 Act. At the
respective times the Registration Statement, any Rule 462(b) Registration
Statement and any post-effective amendments thereto became or become effective,
at the date of this Agreement, and at each
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Representation Date, the Registration Statement, any Rule 462(b) Registration
Statement and any amendments or supplements thereto complied and will comply in
all material respects with the requirements of the 1933 Act and the 1933 Act
Regulations and the 1939 Act and the rules and regulations of the Commission
under the 1939 Act (the "1939 Act Regulations") and did not and will not contain
an untrue statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein not misleading.
At the date of the Prospectus and at each Representation Date, the Prospectus
and any amendments and supplements thereto did not and will not include an
untrue statement of a material fact or omit to state a material fact necessary
in order to make the statements therein, in the light of the circumstances under
which they were made, not misleading. If the Offerors elect to rely upon Rule
434 of the 1933 Act Regulations, the Offerors will comply with the requirements
of Rule 434. Notwithstanding the foregoing, the representations and warranties
in this subsection (i) shall not apply to (A) statements in or omissions from
the Registration Statement or the Prospectus made in reliance upon and in
conformity with information furnished to the Offerors in writing by any
Underwriter through Xxxxxxx Xxxxx expressly for use in the Registration
Statement or the Prospectus or (B) the part of the Registration Statement which
shall constitute a Statement of Eligibility (Form T-1) under the 1939 Act of any
trustee (each, a "Form T-1").
Each preliminary prospectus and prospectus filed as part of the
Registration Statement as originally filed or as part of any amendment thereto,
or filed pursuant to Rule 424 under the 1933 Act, complied when filed in all
material respects with the 1993 Act and the 1933 Act Regulations and each
preliminary prospectus delivered to the Underwriters for use in connection with
the offering of the Securities was and will be identical to the electronically
transmitted copies thereof filed with the Commission pursuant to XXXXX, except
to the extent permitted by Regulation S-T.
(ii) Ernst & Young LLP, whose reports are incorporated by reference
into the Registration Statement, are independent public accountants with respect
to the Company and its subsidiaries as required by the 1933 Act and the 1933 Act
Regulations.
(iii) The financial statements included or incorporated by reference
in the Registration Statement and the Prospectus present fairly the financial
position of the Company and its consolidated subsidiaries as at the dates
indicated and the results of operations of the Company and its consolidated
subsidiaries for the periods specified; except as otherwise stated in the
Registration Statement, said financial statements have been prepared in
conformity with generally accepted accounting principles in the United States
applied on a consistent basis; the supporting schedules included or incorporated
by reference in the Registration Statement present fairly the information
required to be stated therein; the Company's ratios of earnings to fixed charges
and of earnings to combined fixed charges and preferred stock dividends
(including the amounts the ratios would have been were interest on the
outstanding collateralized mortgage obligations of the Company's wholly owned
limited purpose financing subsidiaries included in such ratios' calculation)
included in the Prospectus under the caption "Consolidated Ratios of Earnings to
Fixed Charges and of Earnings to Combined Fixed Charges and Preferred Stock
Dividends" and in Exhibit 12 to the Registration Statement have
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been calculated in compliance with Item 503(d) of Regulation S-K of the
Commission; and the pro forma financial statements, if any, and related notes
thereto included in the Registration Statement and the Prospectus present fairly
the information shown therein, have been prepared in accordance with the
Commission's rules and guidelines with respect to pro forma financial statements
and have been properly compiled on the bases described therein, and the
assumptions used in the preparation thereof are reasonable and the adjustments
used therein are appropriate to give effect to the transactions and
circumstances referred to therein.
(iv) Since the respective dates as of which information is given in
the Registration Statement and the Prospectus, except as otherwise stated
therein, (A) there has been no material adverse change in the condition,
financial or otherwise, or in the earnings, business affairs or business
prospects (1) of the Company and its subsidiaries (which term, as used in this
Agreement, includes without limitation consolidated joint ventures in which the
Company or any of its other subsidiaries is a participant and limited and
general partnerships in which the Company or any of its other subsidiaries owns
partnership interests (such joint ventures and limited and general partnerships
being hereinafter called, collectively, the "Partnerships")) considered as one
enterprise, whether or not arising in the ordinary course of business, or (2)
the Trust, (B) there have been no transactions entered into by the Company or
any of its subsidiaries, other than those in the ordinary course of business,
which are material with respect to the Company and its subsidiaries considered
as one enterprise, and (C) except for regular quarterly dividends in customary
amounts per share on the Common Stock, there has been no dividend or
distribution of any kind declared, paid or made by the Company on any class of
its capital stock.
(v) The Company has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the State of Delaware and
has corporate power and authority to own, lease and operate its properties and
to conduct its business as described in the Prospectus and to enter into and
perform its obligations under, and as contemplated under, the Operative
Documents to which it is a party; and the Company is duly qualified as a foreign
corporation to transact business and is in good standing in each jurisdiction in
which such qualification is required, whether by reason of the ownership or
leasing of property or the conduct of business, except where the failure to so
qualify would not have a material adverse effect on the condition, financial or
otherwise, or the earnings, business affairs or business prospects of the
Company and its subsidiaries considered as one enterprise.
(vi) Each Significant Subsidiary (as defined below) is either a
corporation or a limited partnership. Each Significant Subsidiary has been duly
organized and is validly existing as a corporation or limited partnership, as
the case may be, in good standing under the laws of the jurisdiction of its
organization, has power and authority to own, lease and operate its properties
and to conduct its business as described in the Prospectus and is duly qualified
to transact business and is in good standing in each jurisdiction in which such
qualification is required, whether by reason of the ownership or leasing of
property or the conduct of business, except where the failure to so qualify
would not have a material adverse effect on the condition, financial or
otherwise, or the earnings, business affairs or business prospects of the
Company and its subsidiaries considered as one enterprise; all of the issued
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and outstanding capital stock of each Significant Subsidiary which is a
corporation has been duly authorized and validly issued, is fully paid and
non-assessable and is owned (except for directors qualifying shares and a
nominal number of shares held by affiliated parties) by the Company, directly or
through subsidiaries, free and clear of any security interest, mortgage, pledge,
lien, encumbrance, claim or equity; and all of the outstanding equity interests
in each Significant Subsidiary which is a Partnership have been duly authorized
(if applicable) and validly issued, are fully paid and non-assessable and are
owned by the Company (except to the extent that a minority interest in the
Partnership is reflected in the Company's consolidated financial statements
included or incorporated by reference in the Prospectus), directly or through
subsidiaries, free and clear of any security interest, mortgage, pledge, lien,
encumbrance, claim or equity. For purposes of this Agreement, "Significant
Subsidiary" means any subsidiary of the Company (including, without limitation,
any Partnership but excluding the Trust) that is a "significant subsidiary" as
defined in Rule 1-02 of Regulation S-X (as in effect on January 1, 1996), but
substituting "5%" for "10%" wherever "10%" appears in such definition.
(vii) The Trust has been duly created and is validly existing in
good standing as a business trust under the Delaware Business Trust Act (the
"Delaware Act") with the power and authority to own its property and to conduct
its business as described in the Registration Statement and Prospectus and to
enter into and perform its obligations under the Operative Documents to which it
is a party and the Declaration; the Trust is qualified to transact business as a
foreign trust and is in good standing in each jurisdiction in which such
qualification is necessary, except where the failure to so qualify or be in good
standing would not have a material adverse effect on the condition, financial or
otherwise, or the earnings, business affairs or business prospects of the Trust;
the Trust is not a party to or otherwise bound by any agreement other than the
Operative Documents to which it is a party and the Declaration; the Trust is and
will, under current law, be classified for United States federal income tax
purposes as a grantor trust and not as an association taxable as a corporation;
the Offerors will treat the Debentures as indebtedness of the Company for United
States federal income tax purposes; and the Trust is and will be treated as a
consolidated subsidiary of the Company pursuant to generally accepted accounting
principles.
(viii) The authorized, issued and outstanding capital stock of the
Company is as set forth in the Prospectus under "Capitalization" (except for
subsequent issuances, if any, pursuant to reservations, agreements or employee
benefit plans referred to or incorporated by reference in the Prospectus); and
the shares of issued and outstanding Common Stock have been duly authorized and
validly issued and are fully paid and non-assessable; the Common Stock, the
Company's authorized but unissued special common stock, par value $1.00 per
share (the "Special Common Stock"), and the Company's authorized and unissued
preferred stock, par value $1.00 per share (the "Preferred Stock"), conform to
the respective statements relating thereto included in the Prospectus.
(ix) Neither the Company nor any of its Significant Subsidiaries is
in violation of its charter or by-laws or limited partnership agreement
(collectively, "Organizational Documents"); the Trust is not in violation of the
Declaration or its certificate
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of trust filed with the State of Delaware on __, 1998 (the "Certificate of
Trust"); neither the Company nor any of its Significant Subsidiaries nor the
Trust is in default in the performance or observance of (A) any obligation,
agreement, covenant or condition contained in the Company's 1997 Revolving Loan
Agreement dated as of April 21, 1997 (the "Loan Agreement") with Bank of America
National Trust and Savings Association, as administrative agent, and the other
parties thereto, the Company's 7-3/4% Senior Notes due October 15, 2004 (the
"7-3/4% Senior Notes") or the Indenture dated as of October 14, 1997 between the
Company and Suntrust Bank, Atlanta pursuant to which the 7-3/4% Senior Notes
were issued (the "7-3/4% Senior Indenture"), the Company's 9-3/8% Senior
Subordinated Notes due 2003 (the "9-3/8% Senior Subordinated Notes") or the
Indenture dated as of May 1, 1993 between the Company and The First National
Bank of Boston pursuant to which the 9-3/8% Senior Subordinated Notes were
issued (the "9-3/8% Senior Subordinated Indenture"), or the Company's 9-5/8%
Senior Subordinated Notes due 2007 (the "9-5/8% Senior Subordinated Notes") or
the Indenture dated as of November 19, 1996 between the Company and Suntrust
Bank, Atlanta pursuant to which the 9-5/8% Senior Subordinated Notes were
issued, including the instrument establishing the form and terms of the 9-5/8%
Senior Subordinated Notes (the "9-5/8% Senior Subordinated Indenture") (the Loan
Agreement, the 7-3/4% Senior Notes, the 7-3/4% Senior Indenture, the 9-3/8%
Senior Subordinated Notes, the 9-3/8% Senior Subordinated Indenture, the 9-5/8%
Senior Subordinated Notes and the 9-5/8% Senior Subordinated Indenture are
hereinafter called, collectively, the "Subject Instruments" and, individually, a
"Subject Instrument") or (B) any obligation, agreement, covenant or condition
contained in any other contract, indenture, mortgage, loan agreement, note,
lease or other instrument to which the Company or any of the Significant
Subsidiaries or the Trust is a party or by which it or any of them may be bound,
or to which any of the property or assets of the Company or any of the
Significant Subsidiaries or the Trust is subject, which default or violation
would have a material adverse effect on the condition, financial or otherwise,
or the earnings, business affairs or business prospects of the Company and its
subsidiaries considered as one enterprise or of the Trust; and the entry by the
Company into the Purchase Contracts underlying the Income PRIDES and the Growth
PRIDES, the offer, issuance and sale of the Securities as contemplated herein
and in the Prospectus, the issuance and sale of the Common Securities and the
Debentures as contemplated in the Common Securities Purchase Agreement and the
Debenture Purchase Agreement, respectively, and in the Prospectus, the offering
of the Shares and the issuance and sale of the Shares by the Company pursuant to
the Purchase Contracts, and the execution, delivery and performance of the
Operative Documents and the consummation of the transactions contemplated
therein (including, without limitation, the issuance and sale of the Securities,
the Trust Securities and the Debentures and the use of the proceeds therefrom as
described in the Prospectus under the caption "Use of Proceeds") and compliance
by the Company and the Trust with their respective obligations thereunder, have
been duly authorized by all necessary corporate and trust action and do not and
will not conflict with or constitute a breach of, or default under, or (except
for liens created by the Pledge Agreement) result in the creation or imposition
of any lien, charge or encumbrance upon any property or assets of the Company or
any of the Significant Subsidiaries or the Trust pursuant to, any contract,
indenture, mortgage, loan agreement, note, lease or other instrument to which
the Company or any of the Significant Subsidiaries or the Trust is a party or by
which it or any of them may be bound (including, without limitation, the Subject
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Instruments), or to which any of the property or assets of the Company or any of
the Significant Subsidiaries or the Trust is subject, except (other than in the
case of the Subject Instruments) for a conflict, breach, default, lien, charge
or encumbrance which would not have a material adverse effect on the condition,
financial or otherwise, or the earnings, business affairs or business prospects
of the Company and its subsidiaries considered as one enterprise or of the
Trust, nor will such action result in any violation of the provisions of the
Organizational Documents of the Company or any of the Significant Subsidiaries,
the Declaration or Certificate of Trust, or any applicable law, administrative
regulation or administrative or court order or decree.
(x) There is no action, suit or proceeding before or by any court or
governmental agency or body, domestic or foreign, now pending, or, to the
knowledge of the Company, threatened, against or affecting the Company or any of
its subsidiaries which is required to be disclosed in the Registration Statement
(other than as disclosed therein), or which is not so disclosed and (net of
reserves and insurance) the Company believes might result in any material
adverse change in the condition, financial or otherwise, or in the earnings,
business affairs or business prospects of the Company and its subsidiaries
considered as one enterprise or of the Trust, or which might materially and
adversely affect the properties or assets thereof or which might materially and
adversely affect the consummation of the transactions contemplated by the
Operative Documents; all pending legal or governmental proceedings to which the
Company or any subsidiary is a party or of which any of their respective
property or assets is the subject which are not described in or incorporated by
reference in the Registration Statement, including ordinary routine litigation
incidental to the business, are, considered in the aggregate and net of reserves
and insurance, not material to the Company and its subsidiaries considered as
one enterprise; there is no action, suit or proceeding before or by any court or
governmental agency or body, domestic or foreign, now pending, or, to the
knowledge of the Offerors, threatened, against or affecting the Trust; and there
are no contracts or documents of the Company or any of its subsidiaries or the
Trust which are required to be filed as exhibits to, or incorporated by
reference in, the Registration Statement by the 1933 Act or by the 1933 Act
Regulations which have not been so filed or incorporated by reference.
(xi) No authorization, approval, consent, order, registration or
qualification of or with any court or governmental authority or agency is
required in connection with the entry by the Company into the Purchase Contracts
underlying the Income PRIDES and the Growth PRIDES, the offer, issuance or sale
of the Securities as contemplated herein and in the Prospectus, the issuance or
sale of the Common Securities or the Debentures as contemplated in the Common
Securities Purchase Agreement and Debenture Purchase Agreement, respectively,
and in the Prospectus, the offering of the Shares or the issuance or sale of the
Shares by the Company pursuant to the Purchase Contracts, or the execution,
delivery or performance by the Company or the Trust of the Operative Documents
or the consummation of the transactions contemplated therein or compliance by
the Company or the Trust with their respective obligations thereunder, except
such as have been obtained and made under the 1933 Act, the 1933 Act
Regulations, the 1934 Act and the rules and
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regulations of the Commission thereunder (the "1934 Act Regulations"), the 1939
Act and the 1939 Act Regulations and such as may be required under state
securities or Blue Sky laws.
(xii) The documents incorporated or deemed to be incorporated by
reference in the Prospectus, at the time they were or hereafter are filed with
the Commission, complied and will comply in all material respects with the
requirements of the 1934 Act and the 1934 Act Regulations, and, when read
together with the other information in the Prospectus, at the respective times
the Registration Statement and any amendments thereto became or become
effective, at the date of this Agreement and at each Representation Date did
not, do not and will not contain an untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.
(xiii) The Offerors complied with, and is and will be in compliance
with, the provisions of that certain Florida act relating to disclosure of doing
business with Cuba, codified as Section 517.075 of the Florida statutes, and the
rules and regulations thereunder (collectively, the "Cuba Act") or is exempt
therefrom.
(xiv) The Debentures rank and will rank pari passu in right of
payment with all other unsecured, unsubordinated indebtedness of the Company,
including, without limitation, borrowings under the Loan Agreement.
(xv) There are no holders of securities of the Company with
currently exercisable registration rights to have any securities registered as
part of the Registration Statement or included in the offering contemplated by
this Agreement.
(xvi) The Company and each of the Significant Subsidiaries have good
and marketable title to all of their respective properties, in each case free
and clear of all liens, encumbrances and defects, except (i) customary liens and
encumbrances arising in the ordinary course of the Company's construction and
development business and the financing thereof, (ii) as stated or incorporated
by reference in the Prospectus or (iii) such as do not materially affect the
value of such properties in the aggregate to the Company and its subsidiaries
considered as one enterprise and do not materially interfere with the use made
and proposed to be made of such properties.
(xvii) The Company and its Significant Subsidiaries possess such
certificates, authorities and permits issued by the appropriate state, federal
and foreign regulatory agencies or bodies necessary to conduct all material
aspects of the business now operated by them, and neither the Company nor any of
its Significant Subsidiaries has received any notice of proceedings relating to
the revocation or modification of any such certificate, authority or permit
which, singly or in the aggregate, if the subject of an unfavorable decision,
ruling or finding, would materially and adversely affect the condition,
financial or otherwise, or the earnings, business affairs or business prospects
of the Company and its subsidiaries considered as one enterprise.
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(xviii) No default or event of default with respect to any
Indebtedness (as such term is defined in the Officers' Certificate dated October
14, 1997 establishing the form and terms of the 7-3/4% Senior Notes) of the
Company or any of its Significant Subsidiaries entitling, or which, with notice
or lapse of time or both, would entitle, the holders thereof to accelerate the
maturity thereof exists or will exist as a result of the execution and delivery
of the Operative Documents, the issuance and sale of the Securities, the Trust
Securities or the Debentures, or the consummation of the transactions
contemplated by the Operative Documents.
(xix) The Company and each of the Significant Subsidiaries have
filed all tax returns required to be filed, which returns, as amended, are
complete and correct in all material respects, and neither the Company nor any
Significant Subsidiary is in default in the payment of any taxes which were
payable pursuant to said returns or any assessments with respect to said returns
which would materially and adversely affect the condition, financial or
otherwise, or the earnings, business affairs or business prospects of the
Company and its subsidiaries considered as one enterprise.
(xx) The Company and its Significant Subsidiaries maintain a system
of internal accounting controls sufficient to provide reasonable assurances that
(A) transactions are executed in accordance with management's general or
specific authorization; (B) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principles and to maintain accountability for assets; (C) access to
assets is permitted only in accordance with management's general or specific
authorization; and (D) the recorded accountability for assets is compared with
the existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.
(xxi) The Purchase Contract Agreement has been duly authorized by
the Company and, at the Closing Time and at each Date of Delivery (if any), will
have been duly executed and delivered by the Company and, assuming due
authorization, execution and delivery of the Purchase Contract Agreement by the
Purchase Contract Agent, will constitute a legal, valid and binding agreement of
the Company, enforceable in accordance with its terms except to the extent that
enforcement thereof may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws relating to or affecting creditors' rights
generally or by general equitable principles.
(xxii) The Pledge Agreement has been duly authorized by the Company
and, at the Closing Time and at each Date of Delivery (if any), will have been
duly executed and delivered by the Company and, assuming due authorization,
execution and delivery of the Pledge Agreement by the Collateral Agent and the
Purchase Contract Agent, will constitute a legal, valid and binding agreement of
the Company, enforceable in accordance with its terms except to the extent that
enforcement thereof may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws relating to or affecting creditors' rights
generally or by general equitable principles.
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(xxiii) (A) The Common Securities have been duly authorized by the
Declaration and, when delivered by the Trust to the Company against payment of
the consideration therefor set forth in the Common Securities Purchase
Agreement, will have been duly executed by the Trust and will be validly issued
and (except as provided in Section __ of the Declaration) fully paid and
non-assessable undivided beneficial interests in the assets of the Trust; the
issuance of the Common Securities is not and will not be subject to preemptive
or other similar rights; and at each Representation Date all of the issued and
outstanding Common Securities will be directly owned by the Company free and
clear of any security interest, mortgage, pledge, lien, encumbrance, claim or
equitable right. (B) The Capital Securities have been duly authorized by the
Declaration and, when issued and authenticated in accordance with the provisions
of the Declaration and delivered against payment of the consideration therefor
set forth in this Agreement, will have been duly executed by the Trust, will be
validly issued, fully paid and non-assessable undivided beneficial interests in
the assets in the Trust and will be entitled to the benefits of the Declaration;
the issuance of the Capital Securities is not and will not be subject to
preemptive or other similar rights; and holders of Capital Securities will be
entitled to the same limitation of personal liability extended to stockholders
of private corporations for profit organized under the General Corporation Law
of the State of Delaware.
(xxiv) The Declaration has been duly authorized by the Company and,
at the Closing Time and at each Date of Delivery (if any), will have been
executed and delivered by the Company and the Trustees, and assuming due
authorization, execution and delivery of the Declaration by the Institutional
Trustee and the Delaware Trustee, the Declaration will, at the Closing Time and
at each Date of Delivery (if any), be a legal, valid and binding obligation of
the Company and the Regular Trustees, enforceable in accordance with its terms,
except to the extent that enforcement thereof may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws relating to or
affecting creditors' rights generally or by general equitable principles, and
except to the extent that rights to indemnification thereunder may be limited by
applicable law; and the Declaration has been duly qualified under the 1939 Act.
(xxv) The Guarantee Agreement has been duly authorized by the
Company and, at the Closing Time and at each Date of Delivery (if any), will
have been duly executed and delivered by the Company and, assuming due
authorization, execution and delivery of the Guarantee Agreement by the
Guarantee Trustee, will constitute a legal, valid and binding agreement of the
Company, enforceable in accordance with its terms except to the extent that
enforcement thereof may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws relating to or affecting creditors' rights
generally or by general equitable principles; and the Guarantee Agreement has
been duly qualified under the 0000 Xxx.
(xxvi) The Indenture has been duly authorized by the Company and, at
the Closing Time and at each Date of Delivery (if any), will have been executed
and delivered by the Company and, assuming due authorization, execution and
delivery of the Indenture by the Debt Trustee, will constitute a legal, valid
and binding agreement of the Company, enforceable in accordance with its terms
except to the extent that enforcement thereof may be
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limited by bankruptcy, insolvency, reorganization, moratorium or other similar
laws relating to or affecting creditors' rights generally or by general
equitable principles; and the Indenture has been duly qualified under the 0000
Xxx.
(xxvii) The Debentures have been duly authorized by the Company and,
when authenticated in the manner provided for in the Indenture and delivered to
the Trust against payment of the consideration therefor set forth in the
Debenture Purchase Agreement, will have been duly executed and delivered by the
Company and will constitute legal, valid and binding obligations of the Company,
enforceable in accordance with their terms except to the extent that enforcement
thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or
other similar laws relating to or affecting creditors' rights generally or by
general equitable principles, and will be entitled to the benefits of the
Indenture.
(xxviii) This Agreement and the Remarketing Agreement have been duly
authorized, executed and delivered by each of the Company and the Trust.
(xxix) The Common Securities Purchase Agreement and Debenture
Purchase Agreement have been duly authorized, executed and delivered by each of
the Company and the Trust.
(xxx) The Income PRIDES and the Growth PRIDES have been duly
authorized by the Company and, when delivered against payment therefor as
provided herein, will have been duly executed and delivered by the Company, will
be validly issued and outstanding, fully paid and non-assessable and will
constitute valid and binding obligations of the Company entitled to the benefits
of the Purchase Contract Agreement and enforceable against the Company in
accordance with their terms, except to the extent that enforcement thereof may
be limited by bankruptcy, insolvency, reorganization, moratorium or other
similar laws relating to or affecting creditors' rights generally or by general
equitable principles; the Income PRIDES, the Growth PRIDES and the Shares have
been duly registered under the 1934 Act and have been authorized for listing on
the NYSE, subject to official notice of issuance; and the issuance of the Income
PRIDES and the Growth PRIDES is not subject to preemptive or other similar
rights.
(xxxi) When the Securities are delivered against payment therefor as
provided herein, the holders of the Income PRIDES and the Growth PRIDES will be
entitled to the rights and subject to the obligations specified in the Purchase
Contract Agreement.
(xxxii) The Shares issuable pursuant to the Purchase Contract
Agreement have been duly authorized and reserved for issuance by the Company
and, when issued and delivered in accordance with the provisions of the Purchase
Contract Agreement[, the Purchase Contracts and the Pledge Agreement,] will be
validly issued and fully paid and non-assessable; and the issuance of such
Shares is not and will not be subject to preemptive or other similar rights.
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(xxxiii) At each Representation Date, all conditions precedent
provided for in the Purchase Contract Agreement relating to the authentication
and delivery of the certificates evidencing the Income PRIDES and the Growth
PRIDES to be issued on such date will have been complied with and the Company
will be duly entitled to the authentication and delivery of such certificates in
accordance with the terms of the Purchase Contract Agreement.
(xxxiv) At the Closing Time and, so long as any Purchase Contracts
are outstanding, at all times thereafter, the provisions of the Pledge Agreement
will create in favor of the Collateral Agent for the benefit of the Company, a
valid and perfected security interest under the Uniform Commercial Code in the
Pledged Capital Securities, Pledged Debentures, Applicable Ownership Interests
(as specified in clause (A) of the definition thereof in the Declaration) of the
Treasury Portfolio and the Pledged Treasury Securities from time to time
credited to the Collateral Account. Capitalized terms used in this paragraph and
not defined have the respective meanings given to them in the __ Agreement.
(xxxv) The issuance and sale of the Income PRIDES and Growth PRIDES
do not contravene the Commodity Exchange Act or the regulations of the Commodity
Futures Trading Commission thereunder.
(xxxvi) Each of the Regular Trustees of the Trust is an employee of
the Company and has been authorized by the Company to execute and deliver the
Declaration.
(xxxvii) None of the Trust nor the Company or any of its
subsidiaries is, and upon the issuance and sale of the Securities, the Trust
Securities and the Debentures as herein contemplated and the application of the
net proceeds therefrom as described in the Prospectus, will not be, an
"investment company" or an entity "controlled" by an "investment company" as
such terms are defined in the Investment Company Act of 1940, as amended (the
"1940 Act").
(xxxviii) The Operative Documents conform and will conform to the
respective descriptions thereof in the Prospectus.
(xxxix) When issued, the certificates evidencing the Income PRIDES
and the Growth PRIDES will be in the respective forms contemplated by the
Purchase Contract Agreement and will comply with all applicable statutory
requirements and with the requirements of the NYSE, the certificates evidencing
the Capital Securities and Common Securities will be in the respective forms
contemplated by the Declaration, and the certificates evidencing the Debentures
will be in the form contemplated by the Indenture.
(b) Any certificate signed by any officer of the Company or a Trustee of
the Trust and delivered to the Representatives or to counsel for the
Underwriters shall be deemed a representation and warranty by the Company and
the Trust to the Underwriters as to the matters covered thereby.
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SECTION 2. Sale and Delivery to Underwriters; Closing.
(a) On the basis of the representations and warranties herein contained
and subject to the terms and conditions herein set forth, the Offerors agree to
sell to each Underwriter, severally and not jointly, and each Underwriter,
severally and not jointly, agrees to purchase from the Offerors, at the
respective prices set forth in Schedule B, the number of each type of Initial
Securities set forth in Schedule A opposite the name of such Underwriter, plus
any additional number of Initial Securities which such Underwriter may become
obligated to purchase pursuant to the provisions of Section 10 hereof.
(b) In addition, on the basis of the representations and warranties herein
contained and subject to the terms and conditions herein set forth, the Offerors
hereby grant an option to the Underwriters, severally and not jointly, to
purchase up to an additional __,000 Income PRIDES, __,000 Growth PRIDES and
__,000 Capital Securities at the respective prices set forth in Schedule B, less
an amount per security equal to any dividends or distributions payable on the
Initial Securities but not payable on the Option Securities. The option hereby
granted will expire 30 days after the date hereof and may be exercised in whole
or in part from time to time only for the purpose of covering over-allotments
which may be made in connection with the offering and distribution of the
Initial Securities upon notice by the Representatives to the Company setting
forth the number of each type of Option Securities as to which the several
Underwriters are then exercising the option and the time and date of payment and
delivery for such Option Securities. Any such time and date of delivery (a "Date
of Delivery") shall be determined by the Representatives, but shall not be later
than seven full business days after the exercise of said option, nor in any
event prior to the Closing Time. If the option is exercised as to all or any
portion of the Option Securities, each of the Underwriters, acting severally and
not jointly, will purchase that proportion of the total number of each type of
Option Securities then being purchased which the number of Initial Securities of
such type set forth in Schedule A opposite the name of such Underwriter bears to
the total number of Initial Securities of such type, subject in each case to
such adjustments as the Representatives in their discretion shall make to
eliminate any sales or purchases of fractional securities.
(c) The Capital Securities and Treasury Securities underlying the
Securities will be pledged with the Collateral Agent to secure the holders'
obligations to purchase Shares under the Purchase Contracts. Such pledge shall
be effected by the transfer to the Collateral Agent of the Capital Securities
and Treasury Securities to be pledged at the Closing Time and each Date of
Delivery, if any, in accordance with the Pledge Agreement.
(d) Delivery of certificates for the Initial Securities shall be made at
the offices of the Representatives in New York, against the delivery to the
Collateral Agent of the Capital Securities and Treasury Securities relating to
the Initial Securities by the Representatives or on their behalf, and payment of
the purchase price for the Initial Securities shall be made at the offices of
Xxxxx & Xxxx LLP, 000 Xxxxxxxxxx Xxxxxx, Xxx Xxxxxxxxx, Xxxxxxxxxx 00000, or at
such other place as shall be agreed upon by the Representatives and the
Offerors, at 6:00 a.m. (California time) on the third (or fourth, if the pricing
occurs after 4:30 p.m. (Eastern time)
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on any given day) business day after the date hereof (unless postponed in
accordance with the provisions of Section 10), or such other time not later than
ten business days after such date as shall be agreed upon by the Representatives
and the Offerors (such time and date of payment and delivery being referred to
herein as the "Closing Time").
In addition, in the event that any or all of the Option Securities are
purchased by the Underwriters, delivery of certificates for such Option
Securities, delivery to the Collateral Agent of the Capital Securities and
Treasury Securities relating to such Option Securities, and payment for such
Option Securities, shall be made at the respective offices mentioned above, or
at such other place as shall be agreed upon by the Representatives and the
Offerors, on each Date of Delivery as specified in the notice from the
Representatives to the Company.
Payment for the Securities purchased by the Underwriters shall be made by
wire transfer of immediately available funds to a bank account designated by the
Offerors, against delivery to the Representatives for the respective accounts of
the Underwriters of certificates for the Securities to be purchased by them and
delivery to the Collateral Agent of the Capital Securities and Treasury
Securities relating to such Securities. It is understood that each Underwriter
has authorized the Representatives, for its account, to accept delivery of, and
receipt for, and make payments of the purchase price for, the Initial Securities
and the Option Securities, if any, which it has agreed to purchase. Xxxxxxx
Xxxxx, individually and not as a representative of the Underwriters, may (but
shall not be obligated to) make payment of the purchase price for the Initial
Securities or the Option Securities, if any, to be purchase by any Underwriter
whose funds have not been received by the Closing Time or the relevant Date of
Delivery, as the case may be, but such payment shall not relieve such
Underwriter from its obligations hereunder.
Certificates for the Initial Securities and the Option Securities, if any,
shall be in such denominations and registered in such names as the
Representatives may request in writing at least one full business day before the
Closing Time or the relevant Date of Delivery, as the case may be. The
certificates for the Initial Securities and the Option Securities, if any, will
be made available for examination by the Representatives no later than 10:00
a.m. (New York City time) on the last business day prior to the Closing Time or
the relevant Date of Delivery, as the case may be.
In view of the fact that the proceeds from the sale of the Income PRIDES
and the Separate Capital Securities will be invested by the Trust in the
Debentures, and in view of the fact that the proceeds from the sale of the
Growth PRIDES will be used to purchase the underlying Treasury Securities and
that the proceeds from the Treasury Securities will be applied, subject to
certain possible exceptions, to purchase Shares from the Company, the Company
hereby agrees to pay the several Underwriters, as compensation (the
"Underwriters' Compensation") for their arranging for the investment therein of
such proceeds, the amounts set forth in Schedule B hereto. Such Underwriters'
Compensation shall be payable to the Underwriters by wire transfer of
immediately available funds to Xxxxxxx Xxxxx at the Closing Time and at each
Date of Delivery (if any).
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(e) If settlement for any Option Securities occurs after the Closing Time,
the Offerors will deliver to the Underwriters on the relevant Date of Delivery,
and the several obligations of the Underwriters to purchase such Option
Securities shall be conditioned upon the receipt of, the documents specified in
Section 5(g) hereof.
SECTION 3. Covenants of the Offerors. The Offerors jointly and severally
consent and agree with each Underwriter as follows:
(a) The Offerors will notify the Representatives immediately, and confirm
the notice in writing, (i) of the effectiveness of any Rule 462(b) Registration
Statement or any post-effective amendment to any Registration Statement, (ii) of
the transmission to the Commission for filing of the Prospectus, any Rule 462(b)
Registration Statement or any amendment to any Registration Statement or
amendment or supplement to the Prospectus or any document to be filed pursuant
to the 1934 Act during any period when the Prospectus is required to be
delivered under the 1933 Act, (iii) of the receipt of any comments or inquiries
from the Commission relating to any Registration Statement or Prospectus, (iv)
of any request by the Commission for any amendment to any Registration Statement
or any amendment or supplement to the Prospectus or for additional information
and (v) of the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or the initiation of any proceedings
for that purpose. The Offerors will make every reasonable effort to prevent the
issuance of any stop order and, if any stop order is issued, to obtain the
lifting thereof at the earliest possible moment.
(b) The Offerors will give the Representatives notice of their intention
to file or prepare any amendment to the Registration Statement (including any
post-effective amendment and any filing under Rule 462(b) of the 1933 Act
Regulations), any Term Sheet or any amendment, supplement or revision to either
the prospectus included in the Registration Statement at the time it became
effective or to the Prospectus, whether pursuant to the 1933 Act, the 1934 Act
or otherwise; will furnish the Representatives with copies of any such amendment
to the Registration Statement (including any post-effective amendment and any
filing under Rule 462(b)), Term Sheet, amendment, supplement or revision a
reasonable amount of time prior to such proposed filing or use, as the case may
be; and will not file or use any such amendment to the Registration Statement
(including any post-effective amendment and any filing under Rule 462(b)), Term
Sheet, amendment, supplement or revision to which the Representatives or counsel
for the Underwriters shall reasonably object.
(c) The Offerors have delivered to the Representatives one signed copy of
the Registration Statement as originally filed and of each amendment thereto
(including exhibits filed therewith or incorporated by reference therein and
documents incorporated or deemed to be incorporated by reference therein) and
will also deliver to the Representatives as many conformed copies of the
Registration Statement as originally filed and of each amendment thereto
(without exhibits) as the Representatives may reasonably request. The copies of
the Registration Statement and each amendment thereto furnished to the
Representatives will be identical to the electronically transmitted copies
thereof filed with the Commission pursuant to XXXXX, except to the extent
permitted by Regulation S-T.
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(d) The Company will furnish to each Underwriter, from time to time during
the period when the Prospectus is required to be delivered under the 1933 Act or
the 1934 Act, such number of copies of the Prospectus (as amended or
supplemented) as such Underwriter may reasonably request for the purposes
contemplated by the 1933 Act or the 1934 Act or the respective applicable rules
and regulations of the Commission thereunder. The Prospectus and any amendments
or supplements thereto furnished to the Underwriters will be identical to the
electronically transmitted copies thereof filed with the Commission pursuant to
XXXXX, except to the extent permitted by Regulation S-T.
(e) If any event shall occur as a result of which it is necessary, in the
opinion of counsel for the Underwriters, to amend or supplement the Prospectus
in order to make the Prospectus not misleading in the light of the circumstances
existing at the time it is delivered to a purchaser, the Offerors will forthwith
amend or supplement the Prospectus (in form and substance satisfactory to the
Representatives and counsel for the Underwriters) so that, as so amended or
supplemented, the Prospectus will not include an untrue statement of a material
fact or omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances existing at the time it is delivered
to a purchaser, not misleading, and the Offerors will furnish to the
Underwriters a reasonable number of copies of such amendment or supplement.
(f) The Offerors will endeavor, in cooperation with the Underwriters, to
qualify the Securities, the Capital Securities, the Guarantees, the Debentures
and the Shares for offering and sale under the applicable securities laws of
such states and other jurisdictions of the United States as the Representatives
may designate; provided, however, that neither Offeror shall be obligated to
qualify as a foreign corporation or trust in any jurisdiction in which it is not
so qualified. In each jurisdiction in which the foregoing securities have been
so qualified, the Offerors will file such statements and reports as may be
required by the laws of such jurisdiction to continue such qualification in
effect for so long as may be required by applicable law. The Offerors will
promptly advise the Representatives of the receipt by either of the Offerors of
any notification with respect to the suspension of qualification of any of the
foregoing securities for sale in any state or jurisdiction or the initiating or
threatening of any proceeding for such purpose.
(g) The Company will make generally available to its security holders as
soon as practicable, but not later than 60 days after the close of the period
covered thereby (or 120 days in the case of the close of the Company's fiscal
year), an earnings statement (in form complying with the provisions of Rule 158
of the 1933 Act Regulations) covering a twelve month period beginning not later
than the first day of the Company's fiscal quarter next following the date of
this Agreement.
(h) The Company will use the net proceeds received by it from the sale of
the Securities and the Debentures in the manner to be specified in the
Prospectus under "Use of Proceeds".
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(i) The Company, during the period when the Prospectus is required to be
delivered under the 1933 Act or the 1934 Act, will file all documents required
to be filed with the Commission pursuant to Sections 13, 14 or 15 of the 1934
Act within the time periods required by the 1934 Act and the 1934 Act
Regulations.
(j) In accordance with the Cuba Act, if applicable, and without limitation
to the provisions of Sections 6 and 7 hereof, the Offerors agree to indemnify
and hold harmless the Underwriters from and against any and all loss, liability,
claim, damage and expense whatsoever (including fees and disbursements of
counsel), as incurred, arising out of any violation by the Offerors of the Cuba
Act, if applicable.
(k) If, at the time that the Registration Statement became (or in the case
of a post-effective amendment becomes) effective, any information shall have
been omitted therefrom in reliance upon Rule 430A or Rule 434 of the 1933 Act
Regulations, then immediately following the execution of this Agreement, the
Offerors will prepare, and file with the Commission in accordance with such Rule
430A or Rule 434 and Rule 424(b) of the 1933 Act Regulations, copies of an
amended Prospectus or Term Sheet, as the case may be, or, if required by such
Rule 430A, a post-effective amendment to the Registration Statement (including
an amended Prospectus), containing all information so omitted.
(l) If the Offerors elect to rely upon Rule 462(b), the Offerors shall
file a Rule 462(b) Registration Statement with the Commission in compliance with
Rule 462(b) and pay the applicable fees in accordance with Rule 111 of the 1933
Act Regulations by the earlier of (i) 10:00 p.m. Eastern time on the date of
this Agreement and (ii) the time confirmations are sent or given, as specified
by Rule 462(b)(2).
(m) The Offerors will use their best efforts to effect the listing of the
Income PRIDES, the Growth PRIDES and the Shares on the New York Stock Exchange
(the "NYSE"). The Offerors will register the Income PRIDES, the Growth PRIDES
and the Shares under the 1934 Act.
(n) During a period of __ days from the date of this Agreement, neither
the Trust nor the Company will, without the prior written consent of Xxxxxxx
Xxxxx, directly or indirectly, sell, offer to sell, grant any option for the
sale of, or otherwise dispose of, or enter into any agreement to sell, any
Income PRIDES, Growth PRIDES, Purchase Contracts, Debentures, Capital Securities
or Common Stock, or any securities of the Company or any affiliate of the
Company similar to the Income PRIDES, Growth PRIDES, Purchase Contracts,
Debentures, Capital Securities or Common Stock (collectively, "Similar
Securities") or any securities convertible into or exchangeable or exercisable
for Income PRIDES, Growth PRIDES, Purchase Contracts, Debentures, Capital
Securities or Common Stock or any such Similar Securities, other than (i) to the
Underwriters pursuant to this Agreement, (ii) shares of Common Stock or options
for shares of Common Stock issued pursuant to or sold in connection with any
employee benefit plan, dividend reinvestment plan and stock option and stock
purchase plan of the Company and its subsidiaries described in the Registration
Statement, (iii) any securities issued pursuant to a merger or acquisition and
(iv) the Growth
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PRIDES or Income PRIDES to be created or recreated upon substitution of Capital
Securities or Treasury Securities pledged pursuant to the Pledge Agreement, or
shares of Common Stock issuable upon early settlement of the Income PRIDES or
Growth PRIDES, or (B) enter into any swap or any other agreement or any
transaction that transfers, in whole or in part, directly or indirectly, the
economic consequence of ownership of any Income PRIDES, Growth PRIDES, Purchase
Contracts, Debentures, Capital Securities or Common Stock or any Similar
Securities or any securities convertible into or exchangeable into or
exercisable for Income PRIDES, Growth PRIDES, Purchase Contracts, Debentures,
Capital Securities, Common Stock or any such Similar Securities, whether any
such swap or transaction is to be settled by delivery of Income PRIDES, Growth
PRIDES, Purchase Contracts, Debentures, Capital Securities, Common Stock,
Similar Securities, other securities, in cash or otherwise.
(o) The Company will reserve and keep available at all times, free of
preemptive or other similar rights and liens and adverse claims, sufficient
shares of Common Stock to satisfy its obligations to issue Shares upon
settlement of the Purchase Contracts and shall take all actions necessary to
keep effective the Registration Statement with respect to the Shares.
SECTION 4. Payment of Expenses. The Company will pay all expenses incident
to the performance by the Offerors of their respective obligations under the
Operative Documents, including: (i) the printing and filing of the Registration
Statement as originally filed and of each amendment thereto, (ii) the printing
or reproduction of the Operative Documents, (iii) the preparation, issuance and
delivery of the certificates for the Securities and the Shares, (iv) the fees
and disbursements of the Company's counsel and accountants, (v) the
qualification of the Securities, the Shares and certain other securities under
securities laws in accordance with the provisions of Section 3(f) hereof,
including filing fees and the reasonable fees and disbursements of counsel for
the Underwriters in connection therewith and in connection with the preparation
of the Blue Sky Survey, (vi) the printing and delivery to the Underwriters of
copies of the Registration Statement as originally filed and of each amendment
thereto, of each preliminary prospectus, any Term Sheet, and the Prospectus and
any amendments or supplements thereto, (vii) the printing and delivery to the
Underwriters of copies of the Blue Sky Survey, (viii) the fees and expenses of
the Trustees, Purchase Contract Agent, Collateral Agent, the Debt Trustee, and
any other fiduciaries or agents, including the fees and disbursements of their
respective counsel, (ix) any fees payable in connection with the rating of the
Securities, the Capital Securities or the Debentures; (x) any fees and expenses
of a depositary in connection with holding the Securities in book-entry form;
(xi) any fees payable or expenses incurred pursuant to any Uniform Commercial
Code related filings; and (xii) the fees and expenses incurred in connection
with the listing of the Income PRIDES, the Growth PRIDES and the Shares on the
NYSE.
If this Agreement is terminated by the Representatives in accordance with
the provisions of Section 5 or Section 9(a)(i) hereof with respect to the
Initial Securities or the Option Securities, as the case may be, the Company
shall reimburse the Underwriters for all of their out-of-pocket expenses,
including the reasonable fees and disbursements of counsel for the Underwriters.
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SECTION 5. Conditions of Underwriter's Obligations. The obligations of the
several Underwriters hereunder are subject to the accuracy of the
representations and warranties of the Offerors contained herein or in
certificates of any officer of the Company or any of its subsidiaries or any
trustee of the Trust delivered pursuant to the provisions hereof, to the
performance by the Offerors of their covenants and other obligations hereunder,
and to the following further conditions:
(a) The Registration Statement, including any Rule 462(b) Registration
Statement, have become effective and at the Closing Time and any Date of
Delivery, no stop order suspending the effectiveness of the Registration
Statement shall have been issued under the 1933 Act or proceedings therefor
initiated or threatened by the Commission, and any request on the part of the
Commission for additional information shall have been complied with to the
satisfaction of counsel to the Underwriters. A prospectus containing the Rule
430A Information shall have been filed with the Commission in accordance with
Rule 424(b) (or at post-effective amendment providing such information shall
have been filed and declared effective in accordance with the requirements of
Rule 430A) or, if the Company has elected to rely upon Rule 434 of the 1933 Act
Regulations, a Term Sheet including the Rule 434 Information shall have been
filed with the Commission in accordance with Rule 424(b).
(b) At the Closing Time the Representatives shall have received:
(1) The favorable opinion, dated as of Closing Time, of Xxxxxx,
Xxxxxx & Xxxxx LLP, counsel for the Company, in form and substance
satisfactory to counsel for the Underwriters, to the effect that:
(i) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the
State of Delaware.
(ii) The entry by the Company into the Purchase Contracts
underlying the Income PRIDES and the Growth PRIDES, the offer,
issuance and sale of the Securities as contemplated herein and in
the Prospectus, the issuance and sale of the Common Securities and
the Debentures as contemplated in the Common Securities Purchase
Agreement and the Debenture Purchase Agreement, respectively, and in
the Prospectus, the offering of the Shares and the issuance and sale
of the Shares by the Company pursuant to the Purchase Contracts, and
the execution, delivery and performance of the Operative Documents
and the consummation of the transactions contemplated therein
(including, without limitation, the issuance of the Securities, the
Trust Securities and the Debentures and the use of the proceeds
therefrom as described in the Prospectus under the caption "Use of
Proceeds") and compliance by the Company and the Trust with their
respective obligations thereunder, do not and will not conflict with
or constitute a breach of, or default under, or result in the
creation or imposition of any lien, charge or encumbrance upon any
property or assets of the Company or any of its Significant
Subsidiaries or the Trust pursuant to, the 7-3/4% Senior Notes, the
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7-3/4% Senior Indenture, the 9-3/8% Senior Subordinated Notes, the
9-3/8% Senior Subordinated Indenture, the 9-5/8% Senior Subordinated
Notes or the 9-5/8% Senior Subordinated Indenture.
(iii) The information in the Prospectus under the caption
"Description of the Capital Stock," to the extent that it
constitutes matters of law, summaries of legal matters, the
Company's charter or by-laws or other documents or proceedings, or
legal conclusions, has been reviewed by such counsel and is correct
in all material respects.
In rendering such opinion, such counsel shall state that, insofar as
such opinion concerns the Declaration or the Trust Securities (which are
governed by the laws of the State of Delaware) or any instrument or
agreement which is governed by the laws of the State of New York, such
counsel has assumed without investigation that the laws of the States of
Delaware or New York, as the case may be, are the same as the laws of the
State of California.
(2) The favorable opinion, dated as of Closing Time, of Xxxxxx X.
Xxxxxxx, Esq., Senior Vice President and General Counsel of the Company,
in form and substance satisfactory to counsel for the Underwriters, to the
effect that:
(i) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the
State of Delaware and has corporate power and authority to own,
lease and operate its properties and to conduct its business as
described in the Prospectus and to enter into and perform its
obligation under, and as contemplated under, the Operative Documents
to which it is a party.
(ii) To the best of such counsel's knowledge and information,
the Company is duly qualified as a foreign corporation to transact
business and is in good standing in each jurisdiction in which such
qualification is required, except where the failure to so qualify
would not have a material adverse effect on the condition, financial
or otherwise, or the earnings, business affairs or business
prospects of the Company and its subsidiaries (as such term is
defined in this Agreement) considered as one enterprise.
(iii) Each of the Company's Significant Domestic Subsidiaries
(as defined below) has been duly organized and is validly existing
as a corporation or limited partnership, as the case may be, in good
standing under the laws of the jurisdiction of its incorporation or
formation, as the case may be, has power and authority as a
corporation or limited partnership, as the case may be to own, lease
and operate its properties and to conduct its business as described
in the Prospectus and, to the best of such counsel's knowledge and
information, is duly qualified to transact business and is in good
standing in each jurisdiction in which such qualification is
required, whether by reason of the ownership or
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leasing of property or the conduct of business, except where the
failure to so qualify would not have a material adverse effect on
the Company and its subsidiaries considered as one enterprise or on
their consolidated financial condition or earnings; to the best of
such counsel's knowledge and information, all of the issued and
outstanding capital stock of each such Significant Domestic
Subsidiary which is a corporation has been duly authorized and
validly issued, is fully paid and non-assessable and is owned
(except for directors qualifying shares and a nominal number of
shares held by affiliated parties) by the Company, directly or
through subsidiaries, free and clear of any security interest,
mortgage, pledge, lien, encumbrance, claim or equity; and to the
best of such counsel's knowledge and information, all of the issued
and outstanding partnership interests in each such Significant
Domestic Subsidiary which is a limited partnership have been duly
authorized (if applicable) and validly issued, are fully paid and
non-assessable and are owned by the Company (except to the extent
that a minority interest in such limited partnership is reflected in
the Company's consolidated financial statements included or
incorporated by reference in the Prospectus), directly or through
subsidiaries, free and clear of any security interest, mortgage,
pledge, lien, encumbrance, claim or equity. As used in this
Agreement, the term "Significant Domestic Subsidiaries" means all
Significant Subsidiaries, other than any Significant Subsidiaries
organized and existing under the laws of any jurisdiction other than
the United States of America, any State thereof or the District of
Columbia.
(iv) The authorized, issued and outstanding capital stock of
the Company is as set forth in the Prospectus under "Capitalization"
(except for subsequent issuances, if any, pursuant to the exercise
of options issued under employee benefit plans referred to in the
Prospectus or in the documents incorporated by reference therein);
and the shares of issued and outstanding Common Stock have been duly
authorized and validly issued and are fully paid and non-assessable.
(v) To the best of such counsel's knowledge and information,
there are no statutes or regulations required to be described in the
Registration Statement or the Prospectus or in the documents
incorporated by reference therein which are not described as
required and there are no legal or governmental proceedings pending
or threatened which are required to be disclosed in the Registration
Statement or in the documents incorporated by reference therein,
other than those disclosed therein, and all pending legal or
governmental proceedings to which the Company or any subsidiary is a
party or to which any of their property is subject which are not
described in or incorporated by reference in the Registration
Statement, including ordinary routine litigation incidental to the
business, are, considered in the aggregate and net of reserves and
insurance, not material to the Company and its subsidiaries
considered as one enterprise.
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(vi) The information under "Item 1. Business--Regulation and
Environmental Matters" and "Item 3. Legal Proceedings" in the
Company's 1997 Annual Report on Form 10-K and in Item 15 in Part II
of the Registration Statement, to the extent that such information
constitutes matters of law, summaries of legal matters, summaries of
securities, instruments, agreements or other documents or legal
conclusions, has been reviewed by such counsel and is correct in all
material respects.
(vii) To the best of such counsel's knowledge and information,
there are no contracts, indentures, mortgages, loan agreements,
notes, leases or other instruments required to be described or
referred to in the Registration Statement or to be filed or
incorporated by reference as exhibits thereto other than those
described or referred to or filed as exhibits thereto, the
descriptions thereof or references thereto are correct, and, to the
best of such counsel's knowledge, no default exists in the due
performance or observance of any obligation, agreement, covenant or
condition contained in (A) any Subject Instrument or (B) any other
contract, indenture, mortgage, loan agreement, note, lease or other
instrument so described, referred to or filed or incorporated by
reference, which default (other than in the case of the Subject
Instruments) could have a material adverse effect on the Company and
its subsidiaries considered as one enterprise or on their
consolidated financial condition or earnings.
(viii) No authorization, approval, consent, order,
registration or qualification of or with any court or governmental
authority or agency is required in connection with the entry by the
Company into the Purchase Contracts underlying the Income PRIDES and
the Growth PRIDES, the offer, issuance or sale of the Securities as
contemplated herein and in the Prospectus, the issuance or sale of
the Common Securities or the Debentures as contemplated in the
Common Securities Purchase Agreement and Debenture Purchase
Agreement, respectively, and in the Prospectus, the offering of the
Shares or the issuance or sale of the Shares by the Company pursuant
to the Purchase Contracts, or the execution, delivery or performance
by the Company or the Trust of the Operative Documents or the
consummation of the transactions contemplated therein or compliance
by the Company or the Trust with their respective obligations
thereunder, except such as may be required under the 1933 Act, the
1933 Act Regulations, the 1934 Act, the 1934 Act Regulations, the
1939 Act, the 1939 Act Regulations or state securities laws.
(ix) The entry by the Company into the Purchase Contracts
underlying the Income PRIDES and the Growth PRIDES, the offer,
issuance and sale of the Securities as contemplated herein and in
the Prospectus, the issuance and sale of the Common Securities and
the Debentures as contemplated in the Common Securities Purchase
Agreement and the Debenture Purchase Agreement, respectively, and in
the Prospectus, the offering of the Shares and the issuance and sale
of the Shares by the Company pursuant to the
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Purchase Contracts, and the execution, delivery and performance of
the Operative Documents and the consummation of the transactions
contemplated therein (including, without limitation, the issuance of
the Securities, the Trust Securities and the Debentures and the use
of the proceeds therefrom as described in the Prospectus under the
caption "Use of Proceeds") and compliance by the Company and the
Trust with their respective obligations thereunder, do not and will
not conflict with or constitute a breach of, or default under, or
(except for liens created by the Pledge Agreement) result in the
creation or imposition of any lien, charge or encumbrance upon any
property or assets of the Company or any of its Significant
Subsidiaries or the Trust pursuant to, (A) any Subject Instrument or
(B) to the best of such counsel's knowledge and information, any
other contract, indenture, mortgage, loan agreement, note, lease or
other instrument to which the Company or any of its Significant
Subsidiaries is a party or by which it or any of them may be bound,
or to which any of the property or assets of the Company or any of
its Significant Subsidiaries is subject, nor will such action result
in any violation of the provisions of the charter or by-laws of the
Company, or any applicable law, administrative regulation or
administrative or court decree.
(x) The documents incorporated or deemed to be incorporated by
reference in the Prospectus (other than the financial statements and
supporting schedules included or incorporated by reference therein,
as to which no opinion need be rendered), at the time they were
filed with the Commission, complied as to form in all material
respects with the requirements of the 1934 Act and the 1934 Act
Regulations.
(xi) At the time the Registration Statement became effective,
the Registration Statement (other than the financial statements and
supporting schedules included or incorporated by reference therein
and any Form T-1, as to which no opinion need be rendered) complied
as to form in all material respects with the requirements of the
1933 Act and the 1933 Act Regulations.
(xii) To the best of such counsel's knowledge and information,
no default with respect to any Indebtedness of the Company or any of
its subsidiaries entitling, or which, with notice or lapse of time
or both, would entitle, the holders thereof to accelerate the
maturity thereof exists or will exist as a result of the execution
and delivery of the Operative Documents, the issuance and sale of
the Securities, the Trust Securities or the Shares or the
consummation of the transactions contemplated by the Operative
Documents.
In rendering such opinion, such counsel shall state that, insofar as
such opinion concerns the Declaration or the Trust Securities (which are
governed by the laws of the State of Delaware) or any instrument or
agreement which is governed by the laws of the State of New York, such
counsel has assumed without investigation that the laws of the States of
Delaware or New York, as the case may be, are the same as the
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laws of the State of California. In addition, in rendering such opinion,
such counsel may, as to other matters governed by the laws of any
jurisdiction other than the law of the State of California, the General
Corporation Law of the State of Delaware and the federal law of the United
States of America, either (a) assume without any investigation that the
law of the State of California is the same as the law governing such other
matters for all purposes relevant to such opinion or (b) rely on an
opinion or opinions of local counsel satisfactory to the Representatives,
so long as each such opinion shall be dated as of the Closing Time or the
relevant Date of Delivery, as the case may be, and in form and substance
satisfactory to the Representatives, and shall expressly permit the
Underwriters to rely thereon as if such opinion were addressed to the
Underwriters.
(3) The favorable opinion, dated as of the Closing Time, of Skadden,
Arps, Slate, Xxxxxxx & Xxxx LLP, special counsel to the Offerors, in form
and substance satisfactory to counsel for the Underwriters, to the effect
that:
(i) The Registration Statement (including any Rule 462(b)
Registration Statement) is effective under the 1933 Act and, to the
best of such counsel's knowledge and information, no stop order
suspending the effectiveness of the Registration Statement has been
issued under the 1933 Act or proceedings therefor initiated or
threatened by the Commission.
(ii) At the time the Registration Statement became effective,
the Registration Statement (other than the financial statements and
supporting schedules included or incorporated by reference therein
and any Form T-1, as to which no opinion need be rendered) complied
as to form in all material respects with requirements of the 1933
Act and the 1933 Act Regulations.
(iii) The Company and the Trust meet the requirements for the
use of Form S-3 under the 1933 Act.
(iv) The Trust has been duly created and is validly existing
in good standing as a business trust under the Delaware Act, and has
the trust power and authority to conduct its business as presently
conducted and as described in the Prospectus and to enter into and
perform its obligations under the Operative Documents to which it is
a party and the Declaration; and the Trust is qualified to transact
business as a foreign trust and is in good standing in each
jurisdiction in which such qualification is necessary, except where
the failure to so qualify or be in good standing would not have a
material adverse effect on the condition, financial or otherwise, or
the earnings, business affairs or business prospects of the Trust.
(v) The Purchase Contract Agreement has been duly authorized,
executed and delivered by the Company and, assuming due
authorization, execution and delivery thereof by the Purchase
Contract Agent, constitutes a
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valid and binding agreement of the Company, enforceable against the
Company in accordance with its terms except to the extent that enforcement
thereof may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws relating to or affecting creditors'
rights generally or by general equitable principles.
(vi) The Pledge Agreement has been duly authorized, executed
and delivered by the Company and, assuming due authorization,
execution and delivery thereof by the Collateral Agent and the
Purchase Contract Agent, constitutes a valid and binding agreement
of the Company, enforceable against the Company in accordance with
its terms except to the extent that enforcement thereof may be
limited by bankruptcy, insolvency, reorganization, moratorium or
other similar laws relating to or affecting creditors' rights
generally or by general equitable principles.
(vii) The Common Securities have been duly authorized by the
Declaration and, when duly executed in accordance with the
Declaration and delivered by the Trust to the Company against
payment of the consideration therefor set forth in the Common
Securities Purchase Agreement, will be validly issued and (except as
otherwise provided in Section __ of the Declaration) fully paid and
non-assessable undivided beneficial interests in the assets of the
Trust; the issuance of the Common Securities is not subject to
preemptive or other similar rights arising by operation of law or
under the Declaration or, to such counsel's knowledge, otherwise;
and all of the issued and outstanding Common Securities will be
directly owned by the Company free and clear of any security
interest, mortgage, pledge, encumbrance, claim or equitable right.
(viii) The Capital Securities have been duly authorized by the
Declaration and, when duly executed and authenticated in accordance
with the Declaration and delivered against payment therefor in
accordance with the terms of this Agreement, will be validly issued,
fully paid and non-assessable undivided beneficial interests in the
assets of the Trust and will be entitled to the benefits of the
Declaration; the issuance of the Capital Securities is not subject
to preemptive or other similar rights arising by operation of law or
under the Declaration or, to such counsel's knowledge, otherwise;
and the holders of the Capital Securities will be entitled to the
same limitation of personal liability extended to stockholders of
private corporations for profit organized under the General
Corporation Law of the State of Delaware. In rendering such opinion,
such counsel may state that they bring to your attention, however,
that the holders of Capital Securities may be obligated, pursuant to
the Declaration, to (a) provide indemnity and/or security in
connection with and pay taxes or governmental charges arising from
transfers of Capital Securities and the issuance of replacement
Capital Securities and (b) provide security and indemnity in
connection with requests of or directions
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to the Institutional Trustee to exercise its rights and powers under
the Declaration;
(ix) The Declaration has been duly authorized by the Company
and duly executed and delivered by the Company and the Regular
Trustees and, assuming the due authorization, execution and delivery
of the Declaration by the Institutional Trustee and the Delaware
Trustee, the Declaration constitutes a valid and binding obligation
of the Company and the Regular Trustees, enforceable against the
Company and the Regular Trustees in accordance with its terms,
except to the extent that enforcement thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar
laws relating to or affecting creditors' rights generally or by
general equitable principles and except to the extent that rights to
indemnification thereunder may be limited by applicable law; and the
Declaration has been duly qualified under the 1939 Acts.
(x) The Guarantee Agreement has been duly authorized, executed
and delivered by the Company and, assuming due authorization,
execution and delivery thereof by the Guarantee Trustee, constitutes
a valid and binding agreement of the Company, enforceable against
the Company in accordance with its terms, except to the extent that
enforcement thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or
affecting creditors' rights generally or by general equitable
principles; and the Guarantee Agreement has been duly qualified
under the 1939 Act.
(xi) The Indenture has been duly authorized, executed and
delivered by the Company and, assuming due authorization, execution,
and delivery thereof by the Debt Trustee, constitutes a valid and
binding agreement of the Company, enforceable against the Company in
accordance with its terms, except to the extent that enforcement
thereof may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws relating to or affecting creditors'
rights generally or by general equitable principles; and the
Indenture has been duly qualified under the 0000 Xxx.
(xii) The Debentures have been duly authorized, executed and
delivered by the Company and, when authenticated by the Debt Trustee
in the manner provided for in the Indenture and delivered to the
Trust against payment of the consideration therefor set forth in the
Debenture Purchase Agreement, will constitute valid and binding
obligations of the Company, enforceable against the Company in
accordance with their terms, except to the extent that enforcement
thereof may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws relating to or affecting creditors'
rights generally or by general equitable principles, and will be
entitled to the benefits of the Indenture.
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(xiii) This Agreement, the Remarketing Agreement, the Common
Securities Purchase Agreement and the Debenture Purchase Agreement
have been duly authorized, executed and delivered by each of the
Company and the Trust.
(xiv) The Income PRIDES and Growth PRIDES have been duly
authorized and executed by the Company and, when duly authenticated
by the Purchase Contract Agent in the manner provided for in the
Purchase Contract Agreement and delivered against payment therefor
as provided herein and assuming the certificates evidencing the
Income PRIDES and the Growth PRIDES have been duly executed by the
Purchase Contract Agent as attorney-in-fact of the holders thereof
will be validly issued and outstanding, fully paid and
non-assessable and will constitute valid and binding obligations of
the Company entitled to the benefits of the Purchase Contract
Agreement and enforceable against the Company in accordance with
their terms, except to the extent that enforcement thereof may be
limited by bankruptcy, insolvency, reorganization, moratorium or
other similar laws relating to or affecting creditors' rights
generally or by general equitable principles; the Income PRIDES, the
Growth PRIDES and the Shares have been duly registered under the
1934 Act and have been authorized for listing on the NYSE, subject
to official notice of issuance; and the issuance of the Income
PRIDES and the Growth PRIDES is not subject to preemptive or other
similar rights arising by operation of law, under the charter or
by-laws of the Company or, to the knowledge of such counsel,
otherwise.
(xv) When the Securities are delivered against payment
therefor as provided herein, the holders of the Income PRIDES and
the Growth PRIDES will be entitled to the rights and subject to the
obligations specified in the Purchase Contract Agreement.
(xvi) The Shares initially issuable pursuant to the Purchase
Contract Agreement have been duly authorized and reserved for
issuance by the Company and, when issued and delivered by the
Company in accordance with the provisions of the Purchase Contract
Agreement [, the Purchase Contracts, the Pledge Agreement,] will be
validly issued, fully paid and non-assessable; and the issuance of
such Shares is not and will not be subject to preemptive or other
similar rights arising by operation of law, under the charter or
by-laws of the Company or, to the best of such counsel's knowledge,
otherwise.
(xvii) The entry by the Company into the Purchase Contracts
underlying the Income PRIDES and the Growth PRIDES, the offer,
issuance and sale of the Securities as contemplated herein and in
the Prospectus, the issuance and sale of the Common Securities and
the Debentures as contemplated in the Common Securities Purchase
Agreement and the Debenture Purchase Agreement, respectively, and in
the Prospectus, the offering of the
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Shares and the issuance and sale of the Shares by the Company
pursuant to the Purchase Contracts and the execution, delivery and
performance of the Operative Documents and the consummation of the
transactions contemplated therein (including, without limitation,
the issuance of the Securities, the Trust Securities and the
Debentures and the use of the proceeds therefrom as described in the
Prospectus under the caption "Use of Proceeds") and compliance by
the Company and the Trust with their respective obligations
thereunder, have been duly authorized by all necessary corporate and
trust action and do not and will not result in any violation of the
provisions of the charter or by-laws of the Company or the
Declaration or Certificate of Trust or any applicable law, statute,
rule, or regulation of any government or government instrumentality
or official or, to the knowledge of such counsel, any judgment,
order, writ or decree of any court having jurisdiction over the
Company, any Significant Subsidiary or the Trust or any of their
assets or operations.
(xviii) All conditions precedent provided for in the Purchase
Contract Agreement relating to the authentication and delivery of
the certificates evidencing the Income PRIDES and the Growth PRIDES
have been complied with and the Company is duly entitled to the
authentication and delivery of such certificates in accordance with
the terms of the Purchase Contract Agreement.
(xix) No authorization, approval, consent, order, registration
or qualification of or with any court or governmental authority or
agency is required in connection with the entry by the Company into
the Purchase Contracts underlying the Income PRIDES and the Growth
PRIDES, the offer, issuance or sale of the Securities as
contemplated herein and in the Prospectus, the issuance or sale of
the Common Securities or the Debentures as contemplated in the
Common Securities Purchase Agreement and Debenture Purchase
Agreement, respectively, and in the Prospectus, the offering of the
Shares or the issuance or sale of the Shares by the Company pursuant
to the Purchase Contracts, or the execution, delivery or performance
by the Company or the Trust of the Operative Documents or the
consummation of the transactions contemplated therein or compliance
by the Company or the Trust with their respective obligations
thereunder, except such as has been obtained and made under the
federal securities laws or such as may be required under state
securities laws.
(xx) The statements made in Prospectus under the captions
"Description of the FELINE PRIDES," "Description of the Purchase
Contracts," "Certain Provisions of the Purchase Contract Agreement
and the Pledge Agreement," "Description of Capital Securities,"
"Description of the Guarantee," "Description of the Debentures,"
"Effect of Obligations Under the Debentures and the Guarantee," and
"ERISA Considerations," to the extent they constitute
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matters of law, summaries of legal matters, summaries of Operative
Documents or other documents, or legal conclusions, have been
reviewed by such counsel and are correct in all material respects.
(xxi) Each Purchase Contract constituting a part of the Income
PRIDES or the Growth PRIDES being delivered on the date of such
opinion constitutes a valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms, except
to the extent that enforcement thereof may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws
relating to or affecting creditors' rights generally or by general
equitable principles; provided, however, that upon the occurrence of
a Termination Event (as defined in the __), Section 365(e)(1) of the
Bankruptcy Code (11 U.S.C. xx.xx. 101-1330, as amended) should not
limit, invalidate or nullify the provisions of Sections 3.15 and 5.8
of the Purchase Contract Agreement and of Section 4.3 of the Pledge
Agreement that require termination of the Purchase Contracts and
release of the Collateral Agent's security interest in the Capital
Securities, the Debentures, the Applicable Ownership Interest in the
Treasury Portfolio or the Treasury Securities; provided, however,
that the procedural restrictions respecting relief from the
automatic stay under Section 362 of the Bankruptcy Code may affect
the timing of the exercise of such rights and remedies.
(xxii) The provisions of the Pledge Agreement are effective to
create in favor of the Collateral Agent for the benefit of the
Company, a valid and perfected security interest under the Uniform
Commercial Code as in effect on the date of such opinion in the
State of New York in the Pledged Capital Securities, Pledged
Debentures, Applicable Ownership Interests (as specified in clause
(A) of the definition thereof in the Declaration) of the Treasury
Portfolio and the Pledged Treasury Securities from time to time
credited to the Collateral Account. Capitalized terms used in this
paragraph and not defined have the respective meanings given to them
in the __ Agreement.
(xxiii) The issuance and sale of the Income PRIDES and Growth
PRIDES do not contravene the Commodity Exchange Act or the
regulations of the Commodity Futures Trading Commission thereunder.
(xxiv) Neither the Trust nor the Company is, and upon the
issuance and sale of the Securities as herein contemplated and the
application of the net proceeds therefrom as described in the
Prospectus will not be, an "investment company" or an entity
"controlled" by an "investment company," as such terms are defined
in the 0000 Xxx.
(xxv) The certificates evidencing the Income PRIDES and the
Growth PRIDES are in the respective forms contemplated by the
Purchase Contract Agreement and comply with all applicable statutory
requirements and with the
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requirements of the NYSE, the certificates evidencing the Capital
Securities and Common Securities are in the respective forms
contemplated by the Declaration, and the certificates evidencing the
Debentures are in the form contemplated by the Indenture.
(xxvi) Under current United States Federal income tax law: (i)
the Trust will be classified as a grantor trust and not as an
association taxable as a corporation; (ii) the Debentures will be
classified as indebtedness of the Company and (iii) the discussion
in the Prospectus under the caption "Certain Federal Income Tax
Consequences" is a fair and accurate summary of the matters
addressed therein.
(xxvii) Under the Delaware Act and the Declaration, the Trust
has the trust power and authority to (i) execute and deliver, and to
perform its obligations under, this Agreement and the Remarketing
Agreement, (ii) issue, and perform its obligations under, the Trust
Securities and (iii) perform its obligations under the Declaration.
(xxviii) Under the Delaware Act and the Declaration, the
execution and delivery by the Trust of this Agreement and the
Remarketing Agreement, and the performance by the Trust of its
obligations hereunder and thereunder, and the issuance by the Trust
of the Trust Securities and the performance by the Trust of its
obligations thereunder, have been authorized by all necessary trust
action on the part of the Trust.
(xxix) None of the execution and delivery by the Trust of, or
the performance by the Trust of its obligations under, this
Agreement or the Remarketing Agreement, the issuance and sale of the
Trust Securities by the Trust in accordance with the terms of this
Agreement, the performance by the Trust of its obligations under the
Declaration, or the consummation by the Trust of the other
transactions contemplated hereby or thereby, will contravene any
provisions of applicable Delaware law or Delaware administrative
regulations or the Certificate of Trust or the Declaration.
(xxx) No authorization, approval, consent, order, registration
or qualification of or with any Delaware court, any Delaware state
governmental authority or Delaware state agency is required in
connection with the entry by the Company into the Purchase Contracts
underlying the Income PRIDES or the Growth PRIDES, the offer,
issuance or sale by the Trust of the Trust Securities, or the
performance by the Company and the Trust of the Operative Documents
or the consummation of the transactions contemplated therein or
compliance by the Company or the Trust with their respective
obligations thereunder, except such as have been obtained and made
under federal securities laws or such as may be required under state
securities or Blue Sky laws.
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In rendering such opinion, Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP shall
expressly state that Xxxxxx, Xxxxxx & Xxxxx LLP, Xxxxxx X. Xxxxxxx and
Xxxxx & Wood LLP, in rendering their opinions pursuant to this Agreement,
may rely upon such opinion as if it were addressed to them as to all
matters arising under the laws of the State of Delaware other than the
General Corporation Law of the State of Delaware.
(4) The favorable opinion, dated as of the Closing Time, of Xxxxxx
Xxxxxxxx LLP, counsel to The First National Bank of Chicago, as Purchase
Contract Agent, Institutional Trustee, Guarantee Trustee and Debt Trustee,
and to First Chicago Delaware Inc., as Delaware Trustee, in form and
substance satisfactory to counsel for the Underwriters, to the effect
that:
(i) The First National Bank of Chicago ("FNBC") is a national
banking association with trust powers, duly organized, validly
existing and in good standing under the laws of the United States
with all necessary corporate power and authority to execute and
deliver, and to carry out and perform its obligations under the
terms of, the Purchase Contract Agreement, the Pledge Agreement, the
Declaration, the Guarantee and the Indenture.
(ii) The Delaware Trustee is a Delaware corporation duly
organized, validly existing and in good standing, with full
corporate power and authority to execute and deliver, and to carry
out and perform its obligations under the terms of, the Declaration.
(iii) The execution, delivery and performance by the Purchase
Contract Agent of the Purchase Contract Agreement and the Pledge
Agreement, and the authentication and delivery by the Purchase
Contract Agent of the certificates evidencing the Income PRIDES and
the Growth PRIDES, have been duly authorized by all necessary
corporate action on the part of the Purchase Contract Agent. The
Purchase Contract Agreement and the Pledge Agreement have been duly
executed and delivered by the Purchase Contract Agent and constitute
valid and binding obligations of the Purchase Contract Agent,
enforceable against the Purchase Contract Agent in accordance with
their terms, except to the extent that enforcement thereof may be
limited by bankruptcy, insolvency, reorganization, moratorium or
other similar laws relating to or affecting creditors' rights
generally or by general equitable principles.
(iv) The execution and delivery of the certificates evidencing
the Income PRIDES and the Growth PRIDES by FNBC, as attorney-in-fact
of the holders thereof, have been duly authorized by FNBC and such
certificates have been duly executed by FNBC in such capacity.
(v) The execution, delivery and performance by each of the
Institutional Trustee and the Delaware Trustee of the Declaration
have been duly authorized by all necessary corporate action on the
part of the Institutional
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Trustee and the Delaware Trustee, respectively. The Declaration has
been duly executed and delivered by the Institutional Trustee and
the Delaware Trustee and constitutes a valid and binding obligation
of the Institutional Trustee and the Delaware Trustee, enforceable
against the Institutional Trustee and the Delaware Trustee in
accordance with its terms, except to the extent that enforcement
thereof may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws relating to or affecting creditors'
rights generally or by general equitable principles.
(vi) the execution, delivery and performance by the Guarantee
Trustee of the Guarantee Agreement have been duly authorized by all
necessary corporate action on the part of the Guarantee Trustee. The
Guarantee Agreement has been duly executed and delivered by the
Guarantee Trustee and constitutes a valid and binding agreement of
the Guarantee Trustee, enforceable against the Guarantee Trustee in
accordance with its terms, except to the extent that enforcement
thereof may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws relating to or affecting creditors'
rights generally or by general equitable principles.
(vii) The execution, delivery and performance of the Purchase
Contract Agreement and the Pledge Agreement by the Purchase Contract
Agent, the execution, delivery and performance of the Declaration by
the Institutional Trustee and the Delaware Trustee, and the
execution, delivery and performance of the Guarantee Agreement by
the Guarantee Trustee, do not conflict with, or constitute a breach
of, FNBC's or the Delaware Trustee's respective charter or bylaws.
(viii) No consent, approval or authorization of, or
registration with or notice to, any Delaware, New York or federal
governmental authority or agency is required for the execution,
delivery or performance by the Purchase Contract Agent of the
Purchase Contract Agreement and the Pledge Agreement, for the
execution, delivery or performance by the Institutional Trustee or
the Delaware Trustee of the Declaration, or for the execution,
delivery or performance of the Guarantee Agreement by the Guarantee
Trustee.
(5) The favorable opinion, dated as of the Closing Time, of Xxxxx &
Wood LLP, counsel for the Underwriters, in form and substance satisfactory
to the Representatives, with respect to the issuance and sale of the
Securities, 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. In rendering such opinion, such counsel may rely, as to
all matters arising under or governed by the laws of the State of Delaware
(other than the General Corporation Law of the State of Delaware) upon the
opinion of Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP, special counsel to
the Offerors.
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(6) In giving their opinions required by subsections (b)(1), (b)(2)
and (b)(5), respectively, of this Section, Xxxxxx, Xxxxxx & Xxxxx LLP,
Xxxxxx X. Xxxxxxx and Xxxxx & Xxxx LLP shall each additionally state that
nothing has come to their attention that would lead them to believe that
the Registration Statement (except for financial statements and schedules
and other financial data included therein and any Form T-1, as to which
counsel need make no statement), at the time it became effective,
contained an untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading or that the Prospectus (except for
financial statements and schedules and other financial data included
therein, as to which counsel need make no statement), as of its date
(unless the term "Prospectus" refers to a prospectus which has been
provided to the Underwriters by the Company for use in connection with the
offering of the Securities which differs from the Prospectus filed with at
the Commission pursuant to Rule 424(b) of the 1933 Act Regulations, in
which case at the time it is first provided to the Underwriters for such
use) or at the date of such opinion, included or includes an untrue
statement of a material fact or omitted or omits to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
(c) At Closing Time, there shall not have been, since the date hereof or
since the respective dates as of which information is given in the Registration
Statement or the Prospectus, any material adverse change in the condition,
financial or otherwise, or in the earnings, business affairs or business
prospects of the Company and its subsidiaries considered as one enterprise or of
the Trust, whether or not arising in the ordinary course of business, and the
Representatives shall have received a certificate of the President or a Vice
President of the Company and of the chief financial or chief accounting officer
of the Company, and a certificate of a Regular Trustee of the Trust, each dated
as of Closing Time, to the effect that (i) there has been no such material
adverse change, (ii) the representations and warranties in Section 1 are true
and correct with the same force and effect as though expressly made at and as of
Closing Time, (iii) each of the Company and the Trust has complied with all
agreements and satisfied all conditions on its part to be performed or satisfied
at or prior to Closing Time, (iv) no stop order suspending the effectiveness of
the Registration Statement has been issued and, to the best of such officers'
and Trustee's knowledge and information, no proceedings for that purpose have
been initiated or threatened by the Commission and (v) the rating assigned by
any nationally recognized statistical rating organization to the Income PRIDES,
the Growth PRIDES, any other securities of the Company or the Capital Securities
has not been lowered, and no such rating organization has publicly announced
that it has under surveillance or review its rating of the Income PRIDES, the
Growth PRIDES, any other securities of the Company or the Capital Securities
unless such announcement indicates that such organization is considering an
upgrade in such rating.
(d) (i) At the time of the execution of this Agreement, the
Representatives shall have received from Ernst & Young LLP a letter dated such
date, in form and substance satisfactory to the Representatives, containing
statements and information of the type ordinarily included in accountants'
"comfort letters" to underwriters with respect to the
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financial statements and financial information included and incorporated by
reference in the Registration Statement and the Prospectus (including, without
limitation, any pro forma financial statements); and (ii) at Closing Time, the
Representatives shall have received from Ernst & Young LLP a letter, dated as of
Closing Time, to the effect that they reaffirm the statements made in the letter
delivered pursuant to clause (i) of this paragraph, except that the specified
date referred to shall be a date not more than three business days prior to the
Closing Time.
(e) At Closing Time, the Income PRIDES, Growth PRIDES and Capital
Securities shall have a rating of at least __, __ and __, respectively, from
Moody's Investor's Service Inc. ("Moody's") and at least __, __ and __,
respectively from Standard & Poor's ("S&P"), and the Company shall have
delivered to the Representatives a letter from each such rating agency or other
evidence satisfactory to the Underwriter, confirming that the Securities have
such ratings.
(f) At the Closing Time, the Income PRIDES, the Growth PRIDES and the
Shares shall have been approved for listing on the NYSE, subject to official
notice of issuance.
(g) In the event that the Underwriters exercise their options provided in
Section 2(b) hereof to purchase all or any portion of the Option Securities, the
representations and warranties of the Offerors contained herein and the
statements in any certificates furnished by either of the Offerors hereunder
shall be true and correct as of, and as if made on, each Date of Delivery, and
at the relevant Date of Delivery, the Representatives shall have received:
(1) A certificate, dated such Date of Delivery, of the President or
a Vice-President of the Company and the chief financial officer or chief
accounting officer of the Company and a certificate of a Regular Trustee
of the Trust confirming that the certificate delivered at the Closing Time
pursuant to Section 5(c) hereof is true and correct as of, and as if made
on, such Date of Delivery.
(2) The favorable opinion of Xxxxxx, Xxxxxx & Xxxxx LLP, counsel to
the Company, in form and substance satisfactory to counsel for the
Underwriters, dated such Date of Delivery, relating to the Option
Securities and otherwise to the same effect as the opinion required by
Sections 5(b)(1) and 5(b)(6) hereof.
(3) The favorable opinion of Xxxxxx X. Xxxxxxx, Senior Vice
President and General Counsel of the Company, in form and substance
satisfactory to counsel for the Underwriters, dated such Date of Delivery,
relating to the Option Securities and otherwise to the same effect as the
opinion required by Sections 5(b)(2) and 5(b)(6) hereof.
(4) The favorable opinion of Skadden, Arps, Slate, Xxxxxxx & Xxxx,
LLP, special counsel to the Offerors, in form and substance satisfactory
to counsel for the
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Underwriters, dated such Date of Delivery, relating to the Option
Securities and otherwise to the same effect as the opinion required by
Section 5(b)(3) hereof.
(5) The favorable opinion of Xxxxxx Xxxxxxxx LLP, counsel to The
First National Bank of Chicago and First Chicago Delaware Inc., in form
and substance satisfactory to counsel for the Underwriters, dated such
Date of Delivery, relating to the Option Securities and otherwise to the
same effect as the opinion required by Section 5(b)(4) hereof.
(6) The favorable opinion of Xxxxx & Xxxx LLP, counsel for the
Underwriters, dated such Date of Delivery, relating to the Option
Securities and otherwise to the same effect as the opinion required by
Section 5(b)(5) and 5(b)(6) hereof.
(7) A letter from Ernst & Young LLP, in form and substance
satisfactory to the Representatives and dated such Date of Delivery,
substantially the same in form and substance as the letter furnished to
the Representatives pursuant to Section 5(d)(ii) hereof, except that the
"specified date" in the letter furnished pursuant to this Section shall be
a date not more than five days prior to such Date of Delivery.
(8) At such Date of Delivery, the Income PRIDES, Growth PRIDES and
Capital Securities shall have a rating of at least __, __ and __,
respectively, from Xxxxx'x and at least __, __ and __, respectively, from
S&P.
(h) At Closing Time and at each Date of Delivery (if any), counsel for the
Underwriters shall have been furnished with such documents and opinions as they
may require for the purpose of enabling them to pass upon the issuance and sale
of the Securities as herein contemplated and related proceedings, or in order to
evidence the accuracy of any of the representations or warranties, or the
fulfillment of any of the conditions, herein contained; and all proceedings
taken by the Offerors in connection with the issuance and sale of the Securities
as herein contemplated shall be satisfactory in form and substance to the
Representatives and counsel for the Underwriters.
If any condition specified in this Section shall not have been fulfilled
when and as required to be fulfilled, this Agreement, or, in the case of any
condition to the purchase of Option Securities on a Date of Delivery which is
after the Closing Time, the obligations of the Underwriters to purchase such
Option Securities, may be terminated by the Representatives by notice to the
Company at any time at or prior to the Closing Time or such Date of Delivery, as
the case may be, and such termination shall be without liability of any party to
any other party except as provided in Section 4. Notwithstanding any such
termination, the provisions of Sections 4, 6, 7 and 8 shall remain in effect.
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SECTION 6. Indemnification.
(a) The Offerors agree, jointly and severally, to indemnify and hold
harmless each Underwriter and each person, if any, who controls any Underwriter
within the meaning of Section 15 of the 1933 Act as follows:
(i) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of any untrue statement or alleged
untrue statement of a material fact contained in the Registration
Statement (or any amendment thereto), including the Rule 430A Information
and the Rule 434 Information, if applicable, or the omission or alleged
omission therefrom of a material fact required to be stated therein or
necessary to make the statements therein not misleading or arising out of
any untrue statement or alleged untrue statement of a material fact
contained in any preliminary prospectus or the Prospectus (or any
amendment or supplement thereto) or the omission or alleged omission
therefrom of a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading;
(ii) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission, if such settlement is effected with
the written consent of the Offerors; and
(iii) against any and all expense whatsoever, as incurred
(including, subject to Section 6(c) hereof, the fees and disbursements of
counsel chosen by Xxxxxxx Xxxxx), reasonably incurred in investigating,
preparing or defending against any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or threatened, or
any claim whatsoever based upon any such untrue statement or omission, or
any such alleged untrue statement or omission, to the extent that any such
expense is not paid under (i) or (ii) above;
provided, however, that (A) the foregoing indemnity agreement shall not apply to
any loss, liability, claim, damage or expense to the extent arising out of any
untrue statement or omission or alleged untrue statement or omission (1) made in
reliance upon and in conformity with written information furnished to the
Offerors by any Underwriter through Xxxxxxx Xxxxx expressly for use in the
Registration Statement (or any amendment thereto) or any preliminary prospectus,
or the Prospectus (or any amendment or supplement thereto) or (2) in any Form
T-1; and (B) the foregoing indemnity agreement with respect to any preliminary
prospectus shall not inure to the benefit of the Underwriter from whom the
person asserting any such losses, claims, damages or liabilities purchased
Securities, or any person controlling such Underwriter, if it shall be
determined that a copy of the Prospectus (as it may then be amended or
supplemented if the Company shall have furnished any amendments or supplements
thereto in accordance with the provisions of Sections 3(b) and 3(d) of this
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Agreement, but excluding documents incorporated by reference therein) was not
sent or given by or on behalf of such Underwriter to such person, if such is
required by law, at or prior to the written confirmation of the sale of such
Securities to such person and if the Prospectus (as so amended or supplemented)
would have cured the defect giving rise to such loss, claim, damage, liability
or expense, except that this clause (B) shall not be applicable if such defect
shall have been corrected in a document which is incorporated or deemed to be
incorporated by reference in the Prospectus.
(b) Each Underwriter severally agrees to indemnify and hold harmless the
Company, its directors, each of its officers who signed the Registration
Statement, the Trust and each of its Trustees who signed the Registration
Statement, and each person, if any, who controls the Company or the Trust within
the meaning of Section 15 of the 1933 Act against any and all loss, liability,
claim, damage and expense described in the indemnity contained in subsection (a)
of this Section, as incurred, but only with respect to untrue statements or
omissions, or alleged untrue statements or omissions, made in the Registration
Statement (or any amendment thereto) or any preliminary prospectus or the
Prospectus (or any amendment or supplement thereto) in reliance upon and in
conformity with written information furnished to the Offerors by such
Underwriter through Xxxxxxx Xxxxx expressly for use in the Registration
Statement (or any amendment thereto) or such preliminary prospectus or the
Prospectus (or any amendment or supplement thereto).
(c) Each indemnified party shall give written notice as promptly as
reasonably practicable to each indemnifying party of any action commenced
against it in respect of which indemnity may be sought hereunder, but failure to
so notify an indemnifying party shall not relieve such indemnifying party from
any liability which it may have otherwise than on account of this indemnity
agreement. An indemnifying party may participate at its own expense in the
defense of any such action. In no event shall the indemnifying parties be liable
for fees and expenses of more than one counsel (in addition to any local
counsel) separate from their own counsel for all indemnified parties in
connection with any one action or separate but similar or related actions in the
same jurisdiction arising out of the same general allegations or circumstances.
SECTION 7. Contribution. In order to provide for just and equitable
contribution in circumstances in which the indemnity agreement provided for in
Section 6 is for any reason held to be unenforceable by the indemnified parties
although applicable in accordance with its terms, the Offerors and the
Underwriters shall contribute to the aggregate losses, liabilities, claims,
damages and expenses of the nature contemplated by said indemnity agreement
incurred by the Offerors and one or more of the Underwriters, as incurred, in
such proportions that the Underwriters are responsible for that portion
represented by the percentage that the total underwriting commission set forth
in the table on the cover page of the Prospectus (or, if Rule 434 is used, in
the corresponding location on the Term Sheet) bears to the sum of (i) such total
underwriting commission plus (ii) the total proceeds to Company set forth in the
table on the cover page of the Prospectus (or, if Rule 434 is used, in the
corresponding location on the Term Sheet) and the Offerors are responsible for
the balance; provided, however, that no person guilty of fraudulent
misrepresentation (within the
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meaning of Section 11(f) of the 0000 Xxx) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation; and
provided, further, that no Underwriter shall be required to contribute any
amount in excess of the amount by which the total price at which the Securities
underwritten by it and distributed to the public were offered to the public
exceeds the amount of any damages which such Underwriter has otherwise been
required to pay by reason of any such untrue or alleged untrue statement of a
material fact or omission or alleged omission to state a material fact. For
purposes of this Section, each person, if any, who controls an Underwriter
within the meaning of Section 15 of the 1933 Act shall have the same rights to
contribution as such Underwriter, and each director of the Company, each officer
of the Company who signed the Registration Statement, the Trust, each of its
Trustees who signed the Registration Statement, and each person, if any, who
controls the Company or the Trust within the meaning of Section 15 of the 1933
Act shall have the same rights to contribution as the Offerors. The Offerors'
obligations to contribute pursuant to this Section 7 are joint and several. The
Underwriters' respective obligations to contribute pursuant to this Section 7
are several in proportion to the aggregate number of __ set forth opposite their
respective names in Schedule A hereto and not joint.
SECTION 8. Representations, Warranties and Agreements to Survive Delivery.
All representations, warranties and agreements contained in this Agreement, or
contained in certificates of officers of the Company or trustees of the Trust
submitted pursuant hereto, shall remain operative and in full force and effect,
regardless of any investigation made by or on behalf of any Underwriter or any
controlling person, or by or on behalf of the Company or the Trust, and shall
survive delivery of the Securities to the Underwriters.
SECTION 9. Termination of Agreement.
(a) The Representatives may terminate this Agreement, by notice to the
Company, at any time at or prior to Closing Time (i) if there has been, since
the date of this Agreement or since the respective dates as of which information
is given in the Registration Statement, any material adverse change in the
condition, financial or otherwise, or in the earnings, business affairs or
business prospects of the Company and its subsidiaries considered as one
enterprise or of the Trust, in each case, whether or not arising in the ordinary
course of business, or (ii) if there has occurred any material adverse change in
the financial markets in the United States or any outbreak of hostilities or
escalation thereof or other calamity or crisis the effect of which is such as to
make it, in the judgment of the Representatives, impracticable to market any of
the Securities or to enforce contracts for the sale of any of the Securities, or
(iii) if trading in securities of the Company or the Trust has been suspended by
the Commission or a national securities exchange, or if trading generally on
either the American Stock Exchange or the New York Stock Exchange has been
suspended, or minimum or maximum prices for trading have been fixed, or maximum
ranges for prices for securities have been required, by either of said Exchanges
or by order of the Commission or any other governmental authority, or if a
banking moratorium has been declared by either federal, New York or California
authorities, (iv) if the rating assigned by any nationally recognized
statistical rating organization to the Income PRIDES, the Growth PRIDES, any
other securities of the Company or the Capital Securities shall have been
lowered, or if any
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such rating organization shall have publicly announced that it has under
surveillance or review its rating of the Income PRIDES, the Growth PRIDES, any
other securities of the Company or the Capital Securities unless such
announcement indicates that such organization is considering an upgrade in such
rating. As used in this Section 9(a), the term "Prospectus" means the Prospectus
in the form first used to confirm sales of the Securities.
(b) If this Agreement is terminated pursuant to this Section, such
termination shall be without liability of any party to any other party except as
provided in Section 4 hereof. Notwithstanding any such termination, the
provisions of Sections [4, 6, 7 and 8] shall remain in effect.
SECTION 10. Default by One of the Underwriters. If one of the Underwriters
shall fail at Closing Time or a Date of Delivery to purchase the Securities
which it is obligated to purchase under this Agreement (the "Defaulted
Securities"), the non-defaulting Underwriter shall have the right, within 24
hours thereafter, to make arrangements for such non-defaulting Underwriter or
any other underwriters to purchase all, but not less than all, of the Defaulted
Securities in such amounts as may be agreed upon and upon the terms herein set
forth; if, however, the non-defaulting Underwriter shall not have completed such
arrangements within such 24-hour period, then:
(a) if the aggregate number of Defaulted Securities of each type
does not exceed 10% of the aggregate number of Securities of such type to
be purchased on such date, the non-defaulting Underwriter shall be
obligated to purchase all of the Defaulted Securities, or
(b) if the aggregate number of Defaulted Securities of any type
exceeds 10% of the aggregate number of Securities of such type to be
purchased on such date, this Agreement or, with respect to any Date of
Delivery which occurs after the Closing Time, the obligation of the
Underwriters to purchase and the Company to sell the Options Securities to
be purchased and sold on such Date of Delivery shall terminate without
liability on the part of the non-defaulting Underwriter.
No action taken pursuant to this Section shall relieve any defaulting
Underwriter from liability in respect of its default.
In the event of any such default which does not result in a termination of
this Agreement or, in the case of a Date of Delivery which is after the Closing
Time, which does not result in a termination of the obligation of the
Underwriters to purchase and the Company to sell the relevant Option Securities,
as the case may be, either the non-defaulting Underwriter or the Company shall
have the right to postpone Closing Time or the relevant Date of Delivery, as the
case may be, for a period not exceeding seven days in order to effect any
required changes in the Registration Statement or Prospectus or in any other
documents or arrangements. As used herein, the term "Underwriter" includes any
person substituted for an Underwriter under this Section 10.
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SECTION 11. Notices. All notices and other communications hereunder shall
be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the
Underwriters shall be directed to them at Xxxxxxx Xxxxx & Co., Xxxxxxx Lynch,
Pierce, Xxxxxx & Xxxxx Incorporated, World Financial Center, Xxxxx Xxxxx, Xxx
Xxxx, Xxx Xxxx 00000-0000, Attention: __; and notices to the Offerors shall be
directed to them at 00000 Xxxxxxxx Xxxxxxxxx, Xxx Xxxxxxx, Xxxxxxxxxx 00000,
attention of Xxxxxxx X. Xxxx, Senior Vice President and Chief Financial Officer.
SECTION 12. Parties. This Agreement shall inure to the benefit of and be
binding upon the Underwriters and the Offerors and their respective successors.
Nothing expressed or mentioned in this Agreement is intended or shall be
construed to give any person, firm or corporation, other than the Underwriters
and the Offerors and their respective successors and the controlling persons and
officers, directors and Trustees referred to in Sections 6 and 7 and their heirs
and legal representatives, any legal or equitable right, remedy or claim under
or in respect of this Agreement or any provision contained herein. This
Agreement and all conditions and provisions hereof are intended to be for the
sole and exclusive benefit of the Underwriters and the Company and their
respective successors, and said controlling persons and officers, directors and
Trustees and their heirs and legal representatives, and for the benefit of no
other person, firm or corporation. No purchaser of Securities from any
Underwriter shall be deemed to be a successor by reason merely of such purchase.
SECTION 13. Governing Law and Time. This Agreement shall be governed by
and construed in accordance with the laws of the State of New York applicable to
agreements made and to be performed in said State. Unless otherwise set forth
herein, specified times of day refer to New York City time.
SECTION 14. Effect of Headings. The Article and Section headings herein
are for convenience only and shall not affect the construction hereof.
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If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Offerors a counterpart hereof,
whereupon this instrument, along with all counterparts, shall become a binding
agreement among the Company, the Trust and the Underwriters in accordance with
its terms.
Very truly yours,
XXXXXXX AND BROAD HOME CORPORATION
By:
-----------------------------------
Name:
Title:
KBHC FINANCING I
By:
-----------------------------------
Name:
Title: Trustee
Solely as Trustee and not in
his individual capacity
By:
-----------------------------------
Name:
Title: Trustee
Solely as Trustee and not in
his individual capacity
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CONFIRMED AND ACCEPTED,
as of the date first above written:
XXXXXXX XXXXX & CO.
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX
INCORPORATED
XXXXXXXXX, LUFKIN & XXXXXXXX SECURITIES CORPORATION
By: XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX
INCORPORATED
By:
-------------------------------------------
Authorized Signatory
For themselves and as Representatives of the
Underwriters named in Schedule A hereto.
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Schedule A
Number Number Number
of Income of Growth of Capital
Name of Underwriter PRIDES PRIDES Securities
------------------- --------- --------- ----------
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated ......................
Xxxxxxxxx, Lufkin & Xxxxxxxx Securities
Corporation .......................
--------- --------- ----------
Total.........................................
========= ========= ==========
Sch A-1
48
Schedule B
1. The initial public offering price per Security, and the aggregate
interest rate per annum to be paid by the Offerors for the Securities, shall be
(a) in the case of each Income PRIDES, $10.00 and __%, (b) in the case of each
Growth PRIDES, $__ and __% and (c) in the case of each Separate Capital
Security, $__ and __%.
2. The respective purchase prices per Security to be paid by the several
Underwriters shall be equal to the respective initial public offering prices set
forth in paragraph 1. above. The Company shall pay Underwriters' Compensation to
the Underwriters equal, in the case of the Initial Securities, to $__ and, with
respect to the Option Securities, $.__ per security in the case of Income
PRIDES, $.__ per security in the case of Growth PRIDES and $.__ per security in
the case of Separate Capital Securities.
Sch B-1
