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Exhibit 1.1
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XXX XXXX CORPORATION
10-1/4% SENIOR SUBORDINATED DEBENTURES DUE 2010
UNDERWRITING AGREEMENT
DATED FEBRUARY 12, 1999
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UNDERWRITING AGREEMENT
February 12, 1999
Warburg Dillon Read LLC
Xxxxxxx, Xxxxx & Co.
Xxxxxxx Xxxxx Xxxxxx Inc.
NationsBanc Xxxxxxxxxx Securities LLC
c/o Warburg Dillon Read LLC
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
Xxx Xxxx Corporation (the "Company") proposes to issue and sell to
Warburg Dillon Read LLC, Xxxxxxx, Xxxxx & Co., Xxxxxxx Xxxxx Barney Inc. and
NationsBanc Xxxxxxxxxx Securities LLC (the "Underwriters") $150,000,000
aggregate principal amount of its 10-1/4% Senior Subordinated Debentures due
2010, (the "Debentures"). The Debentures are described in the Prospectus which
is referred to below.
The Debentures are to be issued pursuant to an Indenture (the
"Indenture") to be dated as of February 18, 1999, between the Company and Bank
of Montreal Trust Company, as trustee.
The Company has filed, in accordance with the provisions of the
Securities Act of 1933, as amended, and the rules and regulations thereunder
(collectively, the "Act"), with the Securities and Exchange Commission (the
"Commission") a shelf registration statement on Form S-3, including a
prospectus, relating to $250,000,000 of securities, including the Debentures,
which incorporates by reference documents that the Company has filed or will
file in accordance with the provisions of the Securities Exchange Act of 1934,
as amended, and the rules and regulations thereunder (collectively, the
"Exchange Act"). As used in this Agreement, "Base Prospectus" shall mean the
prospectus included in the Registration Statement when it became effective under
the Act on October 22, 1998, as it may have been amended subsequent to that date
and prior to the date hereof. The Company has furnished to you, for use by you
and by dealers, copies of a preliminary prospectus supplement, including the
Base Prospectus contained therein and all documents incorporated by reference
therein (collectively, the "Preliminary Prospectus") relating to the Debentures.
Except where the context otherwise requires, the shelf registration
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statement, as in effect at the time of execution of this Agreement, including
all documents filed as part thereof or incorporated by reference therein, and
including the Base Prospectus, is herein called the "Registration Statement,"
and the final prospectus supplement relating to the Debentures, including (i)
the Base Prospectus and (ii) all documents incorporated therein or in the Base
Prospectus by reference, in the form first filed by the Company with the
Commission pursuant to Rule 424(b)(5) under the Act, is herein called the
"Prospectus."
The Company and the Underwriters agree as follows:
1. Sale and Purchase: Upon the basis of the warranties and
representations and the other terms and conditions herein set forth, the Company
agrees to sell to the Underwriters and the Underwriters, severally and not
jointly, agree to purchase from the Company, the aggregate principal amount of
Debentures set forth opposite the name of such Underwriter in Schedule I
attached hereto, in each case at a purchase price of 98.390% of the principal
amount thereof, plus accrued interest from the Time of Purchase (as hereinafter
defined). You shall release the Debentures for public sale promptly after this
Agreement becomes effective. You may from time to time increase or decrease the
public offering price after the initial public offering to such extent as you
may determine.
2. Payment and Delivery: Payment of the purchase price for the
Debentures shall be made to the Company in immediately available funds at the
office of Warburg Dillon Read LLC in New York City, against delivery of the
Debentures to you for the respective accounts of the Underwriters. Such payment
and delivery shall be made at 10:00 A.M., New York City time, on February 18,
1999 (unless another time shall be agreed to by you and the Company or unless
postponed in accordance with the provisions of Section 8 hereof). The time at
which such payment and delivery are actually made is hereinafter sometimes
called the "Time of Purchase." The Debentures shall be delivered to you in
definitive or global form in such names and in such denominations as you shall
specify on the second business day(1) preceding the Time of Purchase. For the
purpose of expediting the checking of the Debentures by you, the Company agrees
to make such Debentures available to you for such purpose at least one full
business day preceding the Time of Purchase.
3. Representations and Warranties of the Company: The Company
represents and warrants to the Underwriters that:
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(1) As used herein, "business day" shall mean a day on which the New York
Stock Exchange is open for trading.
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(a) each Preliminary Prospectus filed pursuant to Rule 424
under the Act complied in all material respects with the Act; when the
Registration Statement became effective and at all times subsequent
thereto up to the Time of Purchase, the Registration Statement and the
Prospectus, and any supplements or amendments thereto, complied and
will comply in all material respects with the provisions of the Act and
the Trust Indenture Act of 1939, as amended (the "Trust Indenture
Act"), and the Registration Statement at all such times 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, and the Prospectus at all
such times 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, in light of the
circumstances under which they were made, not misleading; provided,
however, that the Company makes no warranty or representation with
respect to any statement contained in the Prospectus in reliance upon
and in conformity with information concerning the Underwriters and
furnished in writing by or on behalf of you to the Company expressly
for use in the Prospectus and set forth in the section of the
Prospectus entitled "Underwriting;" the documents incorporated by
reference in the Prospectus, at the time they were filed (or, if an
amendment with respect to any such document was filed, when such
amendment was filed) with the Commission, complied in all material
respects with the requirements of the Exchange Act, and, except to the
extent, if any, they are modified or superseded by the Registration
Statement or the Prospectus, do 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 light of the
circumstances under which they were made, not misleading; and the
Company has complied and, until completion of the offering of the
Debentures will continue in the future to comply, with its obligations
under the Exchange Act;
(b) the conditions for use of a registration statement on Form
S-3 set forth in the General Instructions to Form S-3 have been
satisfied with respect to the Company and the transactions contemplated
by this Agreement, the Registration Statement and Prospectus;
(c) the consolidated capitalization of the Company as of
December 31, 1998 is as set forth under the column entitled "December
31, 1998 - Actual" in the section of the Prospectus entitled
"Capitalization" and, as of the Time of Purchase, assuming the Time of
Purchase had been
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December 31, 1998, the consolidated capitalization of the Company shall
be as set forth under the column entitled "December 31, 1998 - As
Adjusted" in the section of the Prospectus entitled "Capitalization;"
all of the issued and outstanding shares of capital stock of the
Company have been duly and validly authorized and issued and are fully
paid and nonassessable; the Company has been duly incorporated and is
validly existing as a corporation in good standing under the laws of
the State of Delaware, with full power and authority (i) to own its
properties and conduct its business as described in the Registration
Statement and Prospectus, and (ii) to execute, deliver and perform its
obligations under this Agreement and the Indenture and to issue, sell
and deliver the Debentures as herein contemplated;
(d) the Company and each of its subsidiaries listed on
Schedule II attached hereto (the "Operating Subsidiaries") are duly
qualified or licensed by and are in good standing in each jurisdiction
in which they conduct their respective business and in which the
failure to be so licensed or qualified could have a material adverse
effect on the condition (financial or other), business, prospects or
results of operations of the Company and the subsidiaries taken as a
whole; the Company and each of the Operating Subsidiaries are in
compliance with the laws, orders, rules, regulations and directives
issued or administered by each such jurisdiction, except where the
failure to be in compliance will not have a material adverse effect on
the condition (financial or other), business, prospects or results of
operations of the Company and its subsidiaries taken as a whole; all of
the outstanding capital stock or other securities evidencing equity
ownership of each of the Operating Subsidiaries have been duly and
validly authorized and issued and are fully paid and non-assessable,
and are directly or indirectly owned by the Company; each Operating
Subsidiary has been duly organized and is validly existing under the
laws of the jurisdiction pursuant to which such Operating Subsidiary is
incorporated or organized, and each Operating Subsidiary has full power
and authority to own its properties and conduct its business as
described in the Registration Statement and Prospectus; no subsidiary
of the Company other than an Operating Subsidiary, accounted for more
than one percent of the Company's consolidated assets, revenues or net
earnings at and for the fiscal year ended June 30, 1998 or at and for
the six months ended December 31, 1998 or is expected to account for
more than one percent of the Company's consolidated assets, revenues or
net earnings at and for the fiscal year ending June 30, 1999; and the
Company and the Operating Subsidiaries accounted for more than 99% of
the Company's consolidated assets, revenues and net earnings at and for
the fiscal year ended June 30, 1998 and at and for the six months ended
December 31, 1998 and are expected to account for more than 99% of the
Company's consolidated assets, revenues and net earnings at and for the
fiscal year ending June 30, 1999;
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(e) neither the Company nor any of its subsidiaries is in
breach of, or in default under (nor has any event occurred which with
notice, lapse of time or both would constitute a breach of, or default
under), its respective charter or bylaws or in the performance or
observance of any license, obligation, agreement, covenant or condition
contained in any indenture, mortgage, deed of trust, bank loan or
credit agreement or other agreement or instrument to which the Company
or any of its subsidiaries is a party or by which any of them is bound,
which breach or default could have a material adverse effect on the
condition (financial or other), business, prospects or results of
operations of the Company and its subsidiaries taken as a whole; and
the execution, delivery and performance of this Agreement and the
issuance of the Debentures and consummation of the transactions
contemplated hereby will not conflict with, or result in any breach of,
or constitute a default under (nor constitute any event which with
notice, lapse of time or both would constitute a breach of, or default
under), any provision of the charter, bylaws or operating agreement of
the Company or any of the Operating Subsidiaries or under any provision
of any license, indenture, mortgage, deed of trust, bank loan or credit
agreement or other agreement or instrument to which the Company or any
of the Operating Subsidiaries is a party or by which any of them or
their respective properties may be bound or affected, or under any
federal, state, local or foreign law, regulation or rule or any decree,
judgment or order applicable to the Company or any of its Operating
Subsidiaries;
(f) the Indenture has been duly authorized by the Company and
when executed and delivered by the Company will be a legal, valid and
binding agreement of the Company enforceable in accordance with its
terms, except as the enforceability thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting creditors' rights generally and general principles of equity;
(g) the Debentures have been duly authorized by the Company
and when executed and delivered by the Company will constitute legal,
valid and binding obligations of the Company entitled to the benefits
of the Indenture and enforceable in accordance with their terms, except
as the enforceability thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors' rights
generally and general principles of equity;
(h) this Agreement has been duly authorized, executed and
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delivered by the Company and is a legal, valid and binding agreement of
the Company enforceable in accordance with its terms, except as rights
to indemnity and contribution hereunder may be limited by federal or
state securities laws or announced public policy;
(i) the Debentures and the Indenture conform in all material
respects to the descriptions thereof contained in the Prospectus;
(j) no approval, authorization, consent or order of or filing
with any federal, state, local or foreign governmental or regulatory
commission, board, body, authority or agency is required in connection
with the issuance and sale of the Debentures as contemplated hereby
other than registration of the Debentures under the Act, any necessary
qualification or exemption under the securities or blue sky laws of the
various jurisdictions in which the Debentures are being offered by the
Underwriters and the filing of this Agreement and the Indenture with
the Commission as exhibits to a Form 8-K, which filing of this
Agreement the Company agrees to make in a timely manner and in any
event prior to the Time of Purchase and which filing of the Indenture
the Company agrees to make in a timely manner, and in any event within
5 days of the Time of Purchase;
(k) no person has the right, contractual or otherwise, to
cause the Company to issue to it, or register pursuant to the Act, any
securities of the Company as a consequence of the issue and sale of the
Debentures to the Underwriters hereunder nor does any person have
preemptive rights, rights of first refusal or other rights to purchase
any of the Debentures;
(l) KPMG LLP, whose reports on the consolidated financial
statements of the Company and its subsidiaries are included or
incorporated by reference in the Registration Statement and Prospectus,
are independent public accountants with respect to the Company as
required by the Act;
(m) each of the Company and the Operating Subsidiaries has all
necessary licenses, authorizations, consents and approvals and has made
all necessary filings required under any federal, state, local or
foreign law, regulation or rule, and has obtained all authorizations,
consents and approvals necessary to date from other persons, in order
to conduct its respective business, in each case where the absence of
which would have a material adverse effect on the condition (financial
or other), business, prospects or results of operations of the Company
and its subsidiaries taken as a whole; neither the Company nor any of
the Operating Subsidiaries is in violation of, or in default under, any
such license, authorization, consent or approval or any federal, state,
local or foreign law, regulation or rule or any decree, order or
judgment applicable to the Company or any of the Operating Subsidiaries
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the effect of which would have a material adverse effect on the
condition (financial or other), business, prospects or results of
operations of the Company and its subsidiaries taken as a whole;
(n) all legal or governmental proceedings, contracts or
documents of a character required to be described in the Registration
Statement or the Prospectus or to be filed as an exhibit to the
Registration Statement have been so described or filed as required;
(o) there is no action, suit, or proceeding pending or, to the
best knowledge of the Company, threatened against the Company or any of
its subsidiaries or any of their respective properties, at law or in
equity, or before or by any federal, state, local or foreign
governmental or regulatory commission, board, body, authority or agency
that could result in a judgment, decree or order having a material
adverse effect on the condition (financial or other), business,
prospects or results of operations of the Company and its subsidiaries
taken as a whole;
(p) the audited financial statements included in the
Registration Statement and the Prospectus present fairly the
consolidated financial position of the Company and its subsidiaries as
of the dates indicated and the consolidated results of operations and
cash flows of the Company and its subsidiaries for the periods
specified and comply with the requirements applicable to registration
statements on Form S-3 under the Act; such financial statements have
been prepared in conformity with generally accepted accounting
principles, applied on a consistent basis during the periods involved;
the other financial and statistical information and data included in
the Registration Statement and the Prospectus, historical and as
adjusted, are accurately presented in all material respects and
prepared on a basis consistent with the financial statements and the
books and records of the Company and its subsidiaries.
(q) subsequent to the respective dates as of which information
is given in the Registration Statement and Prospectus, and except as
may be otherwise stated in or contemplated by the Registration
Statement or Prospectus, there has not been (A) any material adverse
change in the business, prospects or results of operations of the
Company and its subsidiaries taken as a whole, (B) any transaction that
is material to the Company and its subsidiaries taken as a whole,
proposed or entered into by the Company or any of its subsidiaries or
(C) any obligation, contingent or
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otherwise, directly or indirectly, incurred by the Company or any of
its subsidiaries that is material to the Company and its subsidiaries
taken as a whole;
(r) there is no claim pending or threatened or to the best
knowledge of the Company, contemplated under any Environmental Law (as
defined below) against the Company or any subsidiary which, if
adversely determined, would have a material adverse effect on the
condition (financial or other), business, prospects or results of
operations of the Company and its subsidiaries taken as a whole; there
are no past or present actions or conditions including, without
limitation, the release of any hazardous substance or waste regulated
under any Environmental Law that are likely to form the basis of any
such claim under existing law against the Company or any of its
subsidiaries, which, if adversely determined, would have a material
adverse effect on the condition (financial or other), business,
prospects or results of operations of the Company and its subsidiaries
taken as a whole. The term "Environmental Law" means any federal,
state, local or foreign law, rule or regulation now in effect governing
pollution or protection of the environment;
(s) the Company or the applicable subsidiary has good and
market able title to all properties and assets reflected as owned in
the financial statements hereinabove described (or elsewhere in the
Prospectus), and no such property or asset is subject to any lien,
mortgage, pledge, charge or encumbrance of any kind except (i) those
reflected in such financial statements (or elsewhere in the
Prospectus), (ii) those existing in the ordinary course in connection
with the business of the Company and its subsidiaries and which do not
adversely affect the use made and proposed to be made of such property
by the Company and its subsidiaries taken as a whole or (iii) those
which are not material in amount and do not adversely affect the use
made and proposed to be made of such property by the Company and its
subsidiaries taken as a whole. The Company or the applicable subsidiary
holds its material leased properties, if any, under valid and binding
leases, with such exceptions as are not materially significant in
relation to the business of the Company and its subsidiaries taken as a
whole;
(t) neither the Company nor any of the Operating Subsidiaries,
nor any employee of the Company or any of the Operating Subsidiaries,
has made any payment of funds of the Company or any of the Operating
Subsidiaries prohibited by law, and no funds of the Company or any of
the Operating Subsidiaries have been set aside to be used for any
payment prohibited by law;
(u) the Company and its subsidiaries have filed all federal or
state
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income or franchise tax returns required to be filed and have paid all
taxes shown thereon as due, and there is no material tax deficiency
which has been or could be properly asserted against the Company or any
of its subsidiaries; all material tax liabilities are adequately
provided for on the books of the Company and its subsidiaries;
(v) the Company has not incurred any liability for any
finder's fees or similar payments in connection with the transactions
herein contemplated; and
(w) neither the Company nor any of its subsidiaries is an
"investment company" within the meaning of the Investment Company Act
of 1940, as amended, or is subject to regulation thereunder.
4. Certain Covenants of the Company: The Company hereby covenants
and agrees:
(a) to furnish such information as may be required and
otherwise to cooperate in qualifying the Debentures for offering and
sale under the securities or blue sky laws of such states as you may
designate and to maintain such qualifications in effect as long as
required for the distribution of the Debentures, provided that the
Company shall not be required to qualify as a foreign corporation or to
consent to the service of process under the laws of any such state
(except service of process with respect to the offering and sale of the
Debentures); to promptly advise you of the receipt by the Company of
any notification with respect to the suspension of the qualification of
the Debentures for sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose; and to use its best
efforts to obtain the withdrawal of any order of suspension at the
earliest practicable moment;
(b) from time to time to furnish to you as many copies of the
Prospectus (as amended or supplemented) as you may reasonably request;
(c) to advise you promptly and (if requested by you) to
confirm such advice in writing, (i) when any amendment to the
Registration Statement has been filed or becomes effective and (ii)
when the Prospectus is filed with the Commission pursuant to Rule
424(b)(5) under the Act (which the Company agrees to file in a timely
manner under such Rule);
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(d) to advise you promptly, confirming such advice in writing,
of any request by the Commission for amendments or supplements to the
Registration Statement or the Prospectus or for additional information
with respect thereto, or of notice of institution of proceedings for,
or the entry of a stop order suspending the effectiveness of, the
Registration Statement and, if the Commission should enter a stop
order suspending the effectiveness of the Registration Statement, to
make every reasonable effort to obtain the lifting or removal of such
order as soon as possible; to advise you promptly of any proposal to
amend or supplement the Registration Statement or Prospectus, including
by filing any documents that would be incorporated therein by reference
and to file no such amendment or supplement to which you shall
reasonably object in writing;
(e) to furnish to you for a period of eight years from the
date of this Agreement, but only so long as the Company is subject to
the periodic reporting requirements of the Exchange Act (or, if
shorter, the period of time the Debentures are outstanding) (i) copies
of any reports or other communications that the Company shall send to
its stockholders generally or shall from time to time publish or
publicly disseminate, (ii) copies of all annual, quarterly and current
reports filed with the Commission on Forms 10-K, 10-Q and 8-K, or such
other similar form as may be designated by the Commission, and (iii)
such other non-confidential information as you may reasonably request
regarding the Company and which is produced by the Company in the
ordinary course of business;
(f) to advise you promptly of the happening of any event known
to the Company within the time during which a Prospectus relating to
the Debentures is required to be delivered under the Act which, in the
judgment of the Company, would require the making of any change in the
Prospectus then being used or in the information incorporated therein
by reference, so that the Prospectus, as then supplemented, would not
include an untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein, in light of the
circumstances under which they are made, not misleading, and, during
such time, to prepare and furnish, at the Company's expense, to you
promptly such amendments or supplements to such Prospectus as may be
necessary to reflect any such change in such quantities as reasonably
requested by you and to furnish to you a copy of such proposed
amendment or supplement before filing any such amendment or supplement
with the Commission;
(g) to make generally available to its securityholders and to
deliver to you (if not otherwise delivered pursuant to Section 4(e)
hereof), an earnings statement of the Company (which need not be
audited and will satisfy the provisions of Section 11(a) of the Act
including, at the option of
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the Company, Rule 158) covering a period of twelve months beginning
after the date of the Prospectus as soon as is reasonably practicable
after the termination of such twelve-month period but not later than
fifteen months after the date of the Prospectus.
(h) to furnish to you two conformed copies of the Registration
Statement, as initially filed with the Commission, and of all
amendments thereto (including all exhibits thereto and documents
incorporated by reference therein) and such additional conformed copies
thereof as you shall reasonably request;
(i) to furnish to you as early as practicable prior to the
Time of Purchase, but no later than two business days prior thereto, a
copy of the latest available unaudited interim consolidated financial
statements, if any, of the Company and its subsidiaries that have been
read by the Company's independent certified public accountants, as
stated in their letter to be furnished pursuant to Section 6(d) of this
Agreement;
(j) to apply the net proceeds from the sale of the Debentures
in the manner set forth under the caption "Use of Proceeds" in the
Registration Statement and Prospectus;
(k) whether or not the transactions contemplated in this
Agreement are consummated or this Agreement otherwise becomes effective
or is terminated, to pay all expenses, fees and taxes (other than any
transfer taxes and fees and disbursements of counsel for the
Underwriters except as set forth under Section 5 hereof and (iv) below)
in connection with (i) the preparation and filing of each Preliminary
Prospectus, the Prospectus, and any amendments or supplements thereto
or to the Registration Statement, and the printing and furnishing of
copies of each thereof to the Underwriters and to dealers (including
the incorporated documents and costs of mailing and shipment), (ii) the
preparation, issuance, execution, authentication, sale and delivery of
the Debentures, (iii) the reproduction and furnishing of copies of this
Agreement, any dealer agreements and the Indenture to the Underwriters
and to dealers (including costs of mailing and shipment), (iv) the
qualification or registration of the Debentures for offering and sale
under state laws and the determination of their eligibility for
investment under state law as aforesaid (including the legal fees and
filing fees and other disbursements of counsel in connection with such
state law matters) and the preparation and furnishing of copies of any
blue sky surveys or legal investment surveys to the
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Underwriters and to dealers, (v) the listing of the Debentures on the
New York Stock Exchange and any other stock exchange on which the
Debentures may be listed, (vi) any filing fee for review of the public
offering of the Debentures by the National Association of Securities
Dealers, Inc. and (vii) the performance of the Company's other
obligations hereunder;
(l) to furnish to you, before filing with the Commission
subsequent to the effective date of the Registration Statement and
during the period referred to in paragraph (f) above, a copy of any
document proposed to be filed pursuant to Sections 13, 14 or 15(d) of
the Exchange Act;
(m) to refrain from investing the proceeds from the sale of
the Debentures in a manner to cause the Company or any of its
subsidiaries to become an "investment company" within the meaning of
the Investment Company Act of 1940, as amended; and
(n) to use its best efforts to cause the Debentures to be
listed on the New York Stock Exchange.
5. Reimbursement of Underwriters' Expenses: If the Debentures are
not delivered for any reason other than the default by the Underwriters in their
obligations hereunder, the Company shall reimburse the Underwriters for all of
their reasonable out-of-pocket expenses in connection with the matters
contemplated hereunder, including the reasonable fees and disbursements of their
counsel; provided, however, that if the Underwriters determine to terminate this
Agreement pursuant to Section 7 hereof and such determination is not reasonable,
then the Underwriters shall not be entitled to reimbursement of their
out-of-pocket expenses under this Section 5.
6. Conditions of the Underwriters' Obligations: The obligations
of the Underwriters hereunder are subject to the accuracy of the representations
and warranties on the part of the Company on the date hereof and at the Time of
Purchase, the performance by the Company of its obligations hereunder and to the
following conditions:
(a) The Company shall furnish to you at the Time of Purchase
an opinion of Xxxxxx, Xxxx & Xxxxxxxx LLP, special counsel for the
Company, addressed to you and dated the Time of Purchase in the form
set forth in Annex A hereto.
(b) The Company shall furnish to you at the Time of Purchase
an opinion of Xxxxxxxxx X. Xxxxx, Esq., Vice President and General
Counsel of the Company, addressed to you and dated the Time of Purchase
in the form set forth in Annex B hereto.
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(c) [Intentionally left blank]
(d) You shall have received from KPMG LLP letters dated as of
the date of this Agreement and the Time of Purchase, as the case may
be, and addressed to you, each in form and substance heretofore
approved by you.
(e) You shall have received at the Time of Purchase an opinion
from Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP in form and substance
reasonably satisfactory to you.
(f) No amendment or supplement to the Registration Statement
or Prospectus, including documents deemed to be incorporated by
reference therein, shall be filed to which you reasonably have objected
in writing prior to such filing.
(g) The Prospectus shall have been filed with the Commission
pursuant to Rule 424(b) within the applicable time period prescribed
for such filing by the rules and regulations under the Act;
(h) Prior to the Time of Purchase (i) no stop order with
respect to the effectiveness of the Registration Statement shall have
been issued under the Act or proceedings initiated under Section 8(d)
or 8(e) of the Act; (ii) the Registration Statement and all amendments
thereto, or modifications thereof, if any, shall 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; and (iii) the Prospectus and all amendments or supplements
thereto, or modifications thereof, if any, shall not contain an untrue
statement of material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein, in light
of the circumstances under which they were made, not misleading.
(i) Between the time of execution of this Agreement and the
Time of Purchase there has not been (i) any material and adverse
change, present or prospective, in the condition (financial or other),
business, prospects or results of operations of the Company and its
subsidiaries taken as a whole, (ii) any transaction that is material to
the Company and its subsidiaries taken as a whole entered into by the
Company or any of its subsidiaries or (iii) any obligation, contingent
or otherwise, directly or indirectly, incurred by the Company or any of
its subsidiaries that is material to the Company and its
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subsidiaries taken as a whole.
(j) The Company at the Time of Purchase will deliver to you a
certificate executed by two of its executive officers to the effect
that the representations and warranties of the Company set forth in
this Agreement and the conditions set forth in paragraph (h) and
paragraph (i) have been met and are true and correct as of such date.
(k) The Company shall have furnished to you such other
documents and certificates as to the accuracy and completeness of any
statement in the Registration Statement and the Prospectus as of the
Time of Purchase as you may reasonably request.
(l) The Company shall perform such of its obligations under
this Agreement as are to be performed by the terms hereof at or before
the Time of Purchase.
(m) The Debentures shall have been approved for listing on the
New York Stock Exchange.
(n) Between the time of execution of this Agreement and the
Time of Purchase (i) there shall not have occurred any downgrading in
the rating accorded the Company's debt securities by any "nationally
recognized statistical rating organization," as that term is defined in
Rule 436(g)(2) under the Act and (ii) no such organization shall have
publicly announced that it has under surveillance or review, with
possible negative implications, its rating of any of the Company's debt
securities.
7. Effective Date of Agreement; Termination: This Agreement shall
become effective when the parties hereto have executed and delivered this
Agreement.
The obligations of each of the Underwriters hereunder shall be subject
to termination in the absolute discretion of either of you if, at any time prior
to the Time of Purchase, trading in securities generally on the New York Stock
Exchange or American Stock Exchange shall have been suspended or minimum prices
shall have been established on such exchange, or if a banking moratorium shall
have been declared either by the United States or New York State authorities, or
if the United States shall have declared war in accordance with its
constitutional processes or there shall have occurred any material outbreak or
escalation of hostilities or other national or international calamity or crisis
of such magnitude in its effect on the financial markets of the United States
as, in your judgment make it impracticable to market the Debentures.
16
If you elect to terminate this Agreement as provided in this Section 7,
the Company and the other Underwriters shall be notified promptly by letter sent
by facsimile transmission and registered mail, or by telegram.
If the sale to the Underwriters of the Debentures, as contemplated by
this Agreement, is not carried out by the Underwriters for any reason permitted
under this Agreement or if such sale is not carried out because the Company
shall be unable to comply with any of the terms of this Agreement, the Company
shall not be under any obligation or liability under this Agreement (except to
the extent provided in Sections 4(k), 5 and 9 hereof), and the Underwriters
shall be under no obligation or liability to the Company under this Agreement
(except to the extent provided in Section 9 hereof).
8. Increase in Underwriters' Commitments: If any Underwriter
shall default in its obligation to take up and pay for the Debentures to be
purchased by it hereunder and:
(a) if the aggregate principal amount of the Debentures which
all Underwriters so defaulting shall have agreed but failed to take up
and pay for does not exceed 10% of the total aggregate principal amount
of the Debentures, the non-defaulting Underwriter or Underwriters shall
take up and pay for (in addition to the aggregate principal amount of
the Debentures it is obliged to purchase pursuant to Section 1 hereof)
the aggregate principal amount of the Debentures agreed to be purchased
by such defaulting Underwriter, as hereinafter provided. Such aggregate
principal amount of the Debentures shall be taken up and paid for by
such non-defaulting Underwriter or Underwriters in such amounts as you
may designate with the consent of each Underwriter so designated or, in
the event no such designation is made, such aggregate principal amount
of the Debentures shall be taken up and paid for by all nondefaulting
Underwriters pro rata in proportion to the aggregate principal amount
of the Debentures set forth opposite the names of such non-defaulting
Underwriters in Schedule I hereto; or
(b) if the aggregate principal amount of the Debentures which
all Underwriters so defaulting shall have agreed but failed to take up
and pay for exceeds 10% of the total aggregate principal amount of the
Debentures, the non-defaulting Underwriter or Underwriters may, but
shall not be required to, elect to take up and pay for the aggregate
principal amount of the Debentures agreed to be purchased by such
defaulting Underwriter or Underwriters in such amounts as you may
designate with the consent of each Underwriter so
17
designated. If the non-defaulting Underwriters do not so elect, this
Agreement shall terminate without liability on the part of any
non-defaulting Underwriter.
Without relieving any defaulting Underwriter from its obligations
hereunder, the Company agrees with the non-defaulting Underwriter or
Underwriters that it will not sell any Debentures hereunder unless all of the
Debentures are purchased by the Underwriters (or by substituted Underwriters
selected by you with the approval of the Company (which will not be unreasonably
withheld) or selected by the Company with your approval).
If a new Underwriter or Underwriters are substituted by the
non-defaulting Underwriter or Underwriters or by the Company for a defaulting
Underwriter or Underwriters in accordance with the foregoing provisions, the
Company or you shall have the right to postpone the Time of Purchase for a
period not exceeding five (5) business days in order that any necessary changes
in the Registration Statement and Prospectus and other documents may be
effected.
The term Underwriter as used in this Agreement shall refer to and
include any Underwriter substituted under this Section 8 with like effect as if
such substituted Underwriter had originally been named in Schedule I.
9. Indemnity by the Company and the Underwriters:
(a) The Company agrees to indemnify and hold harmless each of
the Underwriters, each person that controls any of the Underwriters
within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act, and the agents, employees, officers and directors of each
of the Underwriters and of each such controlling person (collectively,
the "Underwriter indemnified parties") from and against any and all
losses, claims, damages, judgments, liabilities and expenses
(including, but not limited to, the reasonable fees and expenses of
counsel and other expenses in connection with investigating, preparing,
defending or settling any such action or claim, whether commenced or
threatened) which, jointly or severally, any Underwriter indemnified
party may incur as they are incurred (and regardless of whether the
Underwriter indemnified party is a party to the litigation, if any)
arising out of or based upon any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement or
the Prospectus or the Preliminary Prospectus (as the same may have been
or may be amended or supplemented), or arising out of or based upon any
omission or alleged
18
omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, except
insofar as such losses, claims, damages, judgments, liabilities or
expenses arise out of, or are based upon, any such untrue statement or
omission or alleged untrue statement or omission based upon and in
conformity with information with respect to the Underwriters furnished
in writing by you to the Company expressly for use therein with
reference to the Underwriters; provided, however, that the indemnity
agreement contained in this Section 9(a) with respect to the
Preliminary Prospectus or amended or supplemented Preliminary
Prospectus shall not inure to the benefit of any of the Underwriters
(or to the benefit of any person controlling any of the Underwriters)
from whom the person asserting any such loss, expense, liability or
claim purchased the Debentures which is the subject thereof if the
Prospectus corrected any such alleged untrue statement or omission and
if such Underwriter failed to send or give a copy of the Prospectus to
such person at or prior to the written confirmation of the sale of such
Debentures to such person.
(b) If any action or proceeding (including any governmental or
regulatory investigation or proceeding) shall be brought or asserted
against any Underwriter indemnified party, with respect to which
indemnity may be sought against the Company pursuant to this Section 9,
such Underwriter indemnified party shall promptly notify the Company in
writing, and the Company shall assume the defense thereof, including
the employment of counsel satisfactory to the Underwriter indemnified
party in its reasonable judgment and payment of all fees and expenses;
provided that the omission so to notify the Company shall not relieve
the Company from any liability that it may have to any Underwriter
indemnified party unless, and only to the extent that, such omission
results in the forfeiture of substantive rights or defenses by the
Company. An Underwriter indemnified party shall have the right to
employ separate counsel in any such action or proceeding and to assume
in the defense thereof, but the fees and expenses of such counsel shall
be at the expense of such Underwriter indemnified party unless (i) the
employment of such counsel has been specifically authorized in writing
by the Company, (ii) the Company has failed promptly to assume the
defense and employ counsel satisfactory to the Underwriter indemnified
party in its reasonable judgment, or (iii) the named parties to any
such action or proceeding (including any impleaded parties) include
both the Underwriter indemnified party and the Company and such
Underwriter indemnified party shall have concluded in its reasonable
judgment that there may be one or more legal defenses available to it
that are different from or additional to those available to the Company
(in which case the Company shall not have the right to assume the
defense of such action on behalf of such Underwriter indemnified
party), in any of which events such fees and expenses shall be borne by
the Company and paid as
19
incurred. It is understood, however, that the Company shall not, in
connection with any one such action or separate but substantially
similar or related actions in the same jurisdiction arising out of the
same general allegations or circumstances, be liable for the
reasonable fees and expenses of more than one separate firm of
attorneys (in addition to any local counsel) at any time for all such
Underwriter indemnified parties, which firm shall be designated in
writing by Warburg Dillon Read LLC, and that all such fees and expenses
shall be reimbursed as they are incurred. The Company shall not be
liable for any settlement of any such action effected without the
written consent of the Company (which consent shall not be unreasonably
withheld or delayed), but if settled with the written consent of the
Company, or if there is a final judgment with respect thereto, the
Company agrees to indemnify and hold harmless each Underwriter
indemnified party from and against any loss or liability by reason of
such settlement or judgment.
(c) Each Underwriter, severally and not jointly, agrees to
indemnify and hold harmless the Company, its directors, its officers
who signed the Registration Statement, and any person that controls the
Company within the meaning of Section 15 of the Act or Section 20 of
the Exchange Act (collectively, the "Company indemnified parties") to
the same extent as the foregoing indemnity from the Company to the
Underwriter indemnified parties, but only with respect to information
covering such Underwriter furnished in writing by or on behalf of such
Underwriter through you to the Company expressly for use with respect
to such Underwriter in the Registration Statement, the Prospectus or
the Preliminary Prospectus (as the same may have been amended or
supplemented). In case any action shall be brought against any Company
indemnified party based on the Registration Statement, the Prospectus
or the Preliminary Prospectus (as the same may have been amended or
supplemented) and in respect of which indemnity may be sought against
the Underwriters pursuant to this Section 9(c), the Underwriters shall
have the rights and duties given to the Company by Section 9(b) hereof
(except that if the Company shall have assumed the defense thereof the
Underwriters shall not be required to do so, but may employ separate
counsel therein and participate in the defense thereof, provided that
the fees and expenses of such counsel shall be at the Underwriters'
expense), and the Company indemnified parties shall have the rights and
duties given to the Underwriter indemnified parties by Section 9(b)
hereof.
(d) If the indemnification provided for in this Section 9 is
20
unavailable to, or insufficient to hold harmless, any Underwriter
indemnified party or any Company indemnified party, then the party
required to indemnify such indemnified party under this Section 9
shall, in lieu of indemnifying such indemnified party, contribute to
the amount paid or payable by such indemnified party as a result of
such losses, claims, damages, judgments, liabilities and expenses (i)
in such proportion as is appropriate to reflect the relative benefits
received by the Company on the one hand and the Underwriters on the
other from the offering of the Debentures, or (ii) if the allocation
provided by clause (i) above is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative
benefits referred to in clause (i) above but also the relative fault of
the Company on the one hand and the Underwriters on the other in
connection with the statements or omissions which resulted in such
losses, claims, damages, liabilities or expenses, as well as any other
relevant equitable considerations. The relative benefits received by
the Company on the one hand and the Underwriters on the other shall be
deemed to be in the same proportions as the total proceeds from the
offering (net of underwriting discounts and commission but before
deducting expenses) received by the Company bear to the total
underwriting discounts and commissions received by the Underwriters, in
each case as set forth in the table on the cover page of the
Prospectus. The relative fault of the Company on the one hand and the
Underwriters on the other shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material
fact relates to information supplied by the Company or by the Under
writers, and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or
omission. The amount paid or payable by a party as a result of the
losses, claims, damages and liabilities referred to above shall be
deemed to include any legal or other fees or expenses incurred by such
party in its reasonable judgment in connection with investigating or
defending any claim or action.
The Company and the Underwriters agree that it would not be
just and equitable if contribution pursuant to this subsection (d) were
determined by pro rata allocation or by any other method of allocation
which does not take account of the equitable considerations referred to
in the immediately preceding paragraph. Notwithstanding the provisions
of this subsection (d), no Under writer shall be required to contribute
any amount in excess of the underwriting discount applicable to the
Debentures underwritten by such Underwriter and distributed to the
public. No person guilty of fraudulent
21
misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation.
The sixth paragraph under the caption "Underwriting" on page
[S-42] of the Prospectus Supplement concerning stabilization by the
Underwriters and the third paragraph under the caption "Underwriting"
on page [S-42] of the Prospectus Supplement concerning the terms of the
offering by the Underwriters constitute the only information furnished
to the Company in writing by the Underwriters expressly for use in the
Registration Statement, the Prospectus or the Preliminary Prospectus
(as the same may have been amended or supplemented prior to the date
of the Prospectus).
(e) The indemnity and contribution agreements contained in
this Section 9 and the covenants, warranties and representations of the
Company contained in this Agreement shall remain in full force and
effect, regardless of any investigation made by or on behalf of the
Underwriter indemnified party or by or on behalf of any Company
indemnified party, and shall survive any termination of this Agreement
or the issuance and delivery of the Debentures. The Company and the
Underwriters agree promptly to notify the other of the commencement of
any litigation or proceeding against it and, in the case of the
Company, against any of the Company's officers and directors, in
connection with the issuance and sale of the Debentures or in
connection with the Registration Statement, the Prospectus or the
Preliminary Prospectus (as the same may have been amended or
supplemented prior to the date of the Prospectus).
10. Other Agreements: Each of the Company and the Underwriters
represents and agrees that (a) it has not offered or sold, and for a period of
six months after the date of issue of the Debentures will not offer or sell, any
Debentures to persons in the United Kingdom except to persons whose ordinary
activities involve them in acquiring, holding, managing or disposing of
investments (as principal or agent) for the purposes of their businesses or
otherwise in circumstances which do not constitute an offer to the public in the
United Kingdom for the purposes of the Public Offers of Securities Regulations
1995, (b) it has complied and will comply with all applicable provisions of the
Public Offers of Securities Regulations 1995 and the Financial Services Xxx 0000
with respect to anything done by it in relation to the Debentures in, from or
otherwise involving the United Kingdom and (c) it has only issued or passed on
and will only issue or pass on in the United Kingdom any document received by it
in connection with the issue or sale of Debentures to a person who is of a kind
described in Article 11(3) of the Financial Services Act of 1986 (Investment
Advertisements) (Exemptions) Order 1996 (as amended) or is a person to whom the
document may otherwise lawfully be issued or passed on.
22
11. Notices: Except as otherwise provided herein, all statements,
requests, notices and agreements shall be in writing and, if to the
Underwriters, shall be sufficient in all respects if timely delivered or sent to
Warburg Dillon Read LLC, 000 Xxxx Xxxxxx, Xxx Xxxx, XX 00000, Attention:
Syndicate Department and, if to the Company, shall be sufficient in all respects
if timely delivered to the Company at the offices of the Company at 0000 X. 00xx
Xxxxxx, Xxxxxxx, Xxxxxxx 00000, Attention: Xxxxxxxxx X. Xxxxx, Esq. Any party
may change the address at which it is to receive statements, requests, notices
and agreements by written notice to the other parties.
12. GOVERNING LAW; CONSTRUCTION: THIS AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT
REGARD TO PRINCIPLES OF CONFLICTS OF LAW. THE SECTION HEADINGS IN THIS AGREEMENT
HAVE BEEN INSERTED AS A MATTER OF CONVENIENCE OF REFERENCE AND ARE NOT A PART OF
THIS AGREEMENT.
13. Parties in Interest: The Agreement herein set forth has been and is
made solely for the benefit of the Underwriters, the Company, the Underwriter
indemnified parties and the Company indemnified parties, and their respective
successors, assigns, executors and administrators. No other person, partnership,
association or corporation (including a purchaser, as such purchaser, from the
Underwriters) shall acquire or have any right under or by virtue of this
Agreement
14. Counterparts: This Agreement may be signed by the parties in
counterparts which together shall constitute one and the same agreement between
the parties.
[REMAINDER INTENTIONALLY LEFT BLANK]
23
Very truly yours,
XXX XXXX CORPORATION
By: _______________________________
Name:
Title:
Agreed to and accepted as of the date
first above written:
Warburg Dillon Read LLC
Xxxxxxx, Xxxxx & Co.
Xxxxxxx Xxxxx Xxxxxx Inc.
NationsBanc Xxxxxxxxxx Securities LLC
By: Warburg Dillon Read LLC
By: ___________________________
Name:
Title:
By: ___________________________
Name:
Title:
24
SCHEDULE I
Principal Amount
Underwriter of Debentures
----------- ----------------
Warburg Dillon Read LLC .................................. $ 82,500,000
Xxxxxxx Xxxxx Xxxxxx Inc. ................................ $ 25,500,000
Xxxxxxx, Sachs & Co. ..................................... $ 30,000,000
NationsBanc Xxxxxxxxxx Securities LLC .................... $ 12,000,000
Total ............................................... $150,000,000
============
SCHEDULE II
Anthem Arizona, LLC, an Arizona limited liability company
Bellasera Corp., an Arizona corporation
Xxx Xxxx Communities, Inc., an Arizona corporation
Del X. Xxxx Development Co., L.P., a Delaware limited partnership
Xxx Xxxx California Corp., an Arizona corporation
Xxx Xxxx'x Coventry Homes, Inc., an Arizona corporation
Xxx Xxxx'x Coventry Homes Construction Co., an Arizona corporation
Xxx Xxxx Home Construction, Inc., an Arizona corporation
Xxx Xxxx'x Spruce Creek Communities, Inc., an Arizona corporation
Xxx Xxxx'x Sunflower of Tucson, Inc., an Arizona corporation
Terravita Home Construction Co., an Arizona corporation
Terravita Corp., an Arizona corporation
Xxx Xxxx'x Coventry Homes of Tucson, Inc., an Arizona corporation
Xxx Xxxx'x Coventry Homes Construction of Tucson, Co. an Arizona Corporation
Xxx Xxxx'x Coventry Homes of Nevada, Inc., an Arizona corporation
Xxx Xxxx Conservation Holding Corp., an Arizona corporation
Trovas Company, an Arizona corporation
Trovas Construction Company, an Arizona corporation
Xxx Xxxx Texas Limited Partnership, an Arizona limited partnership
Fairmount Mortgage, Inc., an Arizona corporation
Xxx Xxxx Limited Holding Co., an Arizona corporation
Xxx Xxxx Southwest Co., an Arizona corporation
DW Aviation Co., Inc., an Arizona corporation
Mountain View Two LLC, an Arizona limited liability company
Spruce Creek South Utilities, Inc., a Florida corporation
25
ANNEX A
February [ ], 1999
Warburg Dillon Read LLC
Xxxxxxx, Xxxxx & Co.
Xxxxxxx Xxxxx Xxxxxx Inc.
NationsBanc Xxxxxxxxxx Securities LLC
c/o Warburg Dillon Read LLC
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: Xxx Xxxx Corporation
Public Offering of $200 Million of
[ ]% Senior Subordinated Debentures due 2010
Ladies and Gentlemen:
We have acted as special counsel to Xxx Xxxx Corporation, a
Delaware corporation (the "Company"), in connection with its sale to you of $200
million of [ ]% Senior Subordinated Debentures Due 2010 (the "Debentures")
pursuant to the Underwriting Agreement, dated February [ ], 1999, between each
of you and the Company (the "Underwriting Agreement"). This opinion is rendered
to you pursuant to Section 6(a) of the Underwriting Agreement.
In connection with our examination of documents as described
below, we have assumed the genuineness of all signatures on, and the
authenticity of, all documents submitted to us as originals and the conformity
to original documents of all documents submitted to us as copies. With respect
to agreements and instruments executed by natural persons, we have assumed the
legal competency of such persons.
For the purpose of rendering this opinion, we have made such
factual and legal inquiries as we deemed necessary under the circumstances and
in that connection we have examined, among other things, originals or copies of
the following:
(1) The registration statement on Form S-3 (file number
333-63671) filed by the Company with the Securities
and
26
Warburg Dillon Read LLC.
Xxxxxxx, Xxxxx & Co.
Xxxxxxx Xxxxx Xxxxxx Inc.
NationsBanc Xxxxxxxxxx Securities LLC
February [ ], 1999
Page 26
Exchange Commission (the "Commission") on September
18, 1998 for the purpose of registering the sale of
various securities, including Senior Subordinated
Debt Securities, under the Securities Act of 1933, as
amended (the "Securities Act"), the related Form T-1
filed with the Commission for the purpose of
qualifying the Indenture (defined below) under the
Trust Indenture Act of 1939, as amended (the "Trust
Indenture Act") and the prospectus included as part
of the Registration Statement (defined below). The
registration statement in the form in which it became
effective on October 22, 1998, including the
documents incorporated by reference therein to the
extent not modified or superseded thereby, is
referred to below as the "Registration Statement",
the prospectus of the Company dated October 22, 1998,
including the documents incorporated by reference
therein to the extent not modified or superseded
thereby, is referred to below as the "Prospectus" and
the Prospectus, as supplemented by the Prospectus
Supplement to Prospectus dated February [ ], 1999, in
the form filed with the Commission pursuant to Rule
424(b) of the Rules and Regulations adopted by the
Commission under the Securities Act, including the
documents incorporated by reference therein to the
extent not modified or superseded thereby, is
referred to below as the "Prospectus/Prospectus
Supplement";
(2) The order of the Commission dated October 22, 1998,
declaring the Registration Statement effective under
the Securities Act;
(3) The Certificate of Incorporation of the Company, as
amended to date;
(4) The Bylaws of the Company, as amended to date;
(5) Minutes of meetings of the Company's Board of
Directors at which actions were taken with respect to
the transactions covered by this opinion and minutes
or records of other
27
Warburg Dillon Read LLC.
Xxxxxxx, Xxxxx & Co.
Xxxxxxx Xxxxx Xxxxxx Inc.
NationsBanc Xxxxxxxxxx Securities LLC
February [ ], 1999
Page 27
corporate proceedings;
(6) The action of the Chief Executive Officer of the
Company, dated as of February [ ], 1999, with respect
to the terms of the Debentures and the Indenture;
(7) The letters of KPMG LLP, dated February [ ], 1999 and
the date hereof, delivered pursuant to Section 6(d)
of the Underwriting Agreement;
(8) The certificates, dated as of the date hereof,
delivered pursuant to Section 6(k) of the
Underwriting Agreement;
(9) The Directors and Officers Questionnaires of the
directors and executive officers of the Company;
(10) The Indenture, dated as of February [ ], 1999,
between the Company and Bank of Montreal Trust
Company, as Trustee (the "Trustee"), pursuant to
which the Debentures are to be issued (the
"Indenture");
(11) The Certificate of the Trustee, dated as of the date
hereof, as to the due authentication of the
Debentures;
(12) The Underwriting Agreement;
(13) Specimen certificate(s) representing the Debentures;
(14) The opinion of Xxxxxxxxx X. Xxxxx, Esq., Vice
President and General Counsel of the Company, to you,
dated February [ ], 1999;
(15) The documents referred to in subparagraphs (x)(B),
(C), (D), (E) and (F) below and the indentures with
respect to the Company's 9-3/4% Senior Subordinated
Debentures due 2003, 9% Senior Subordinated
Debentures due 2006, 9 3/4% Senior Subordinated
Debentures due 2008 and 9 3/8% Senior
28
Warburg Dillon Read LLC.
Xxxxxxx, Xxxxx & Co.
Xxxxxxx Xxxxx Xxxxxx Inc.
NationsBanc Xxxxxxxxxx Securities LLC
February [ ], 1999
Page 28
Subordinated Debentures due 2009;
(16) Such other certificates and assurances from public
officials and officers and representatives of the
Company that we considered necessary or appropriate
for the purpose of rendering this opinion, copies of
which have been delivered to you; and
(17) The opinions rendered by us in connection with our
representation of the Company in the issuance of its
common stock and certain related documents.
Based on the foregoing and in reliance thereon (with respect to
the opinion of Xxxxxxxxx X. Xxxxx, to the extent set forth below), and subject
to the assumptions, qualifications and limitations set forth herein, we are of
the opinion that:
(i) The Company is a corporation duly organized, validly
existing and in good standing under the laws of the
State of Delaware and has the corporate power to (A)
own its properties and conduct its business, in each
case as described in the Prospectus/Prospectus
Supplement, and (B) execute and deliver the
Underwriting Agreement and the Indenture and to
issue, sell and deliver the Debentures as
contemplated by the Underwriting Agreement;
(ii) Each of the entities listed on Schedule II to the
Underwriting Agreement (the "Material Subsidiaries")
is a corporation, limited partnership or limited
liability company, as the case may be, duly
organized, validly existing and, as to the Material
Subsidiaries that are corporations and Del X. Xxxx
Development Co., L.P., a Delaware limited partnership
("DEVCO"), in good standing under the laws of its
respective jurisdiction of incorporation or
organization. Each Material Subsidiary has the
corporate, partnership or limited liability company
power to own its properties and conduct its business,
in each case as described in the
Prospectus/Prospectus Supplement;
29
Warburg Dillon Read LLC.
Xxxxxxx, Xxxxx & Co.
Xxxxxxx Xxxxx Xxxxxx Inc.
NationsBanc Xxxxxxxxxx Securities LLC
February [ ], 1999
Page 29
(iii) The Company is qualified to do business and in good
standing in Arizona, California, Nevada, Illinois,
Texas and South Carolina; Bellasera Corp., an Arizona
corporation, is qualified to do business and in good
standing in Illinois; Xxx Xxxx Communities, Inc., an
Arizona corporation, is qualified to do business and
in good standing in Nevada and South Carolina; Xxx
Xxxx Conservation Holding Corp., an Arizona
corporation, is qualified to do business and in good
standing in Nevada; Xxx Xxxx California Corp., an
Arizona corporation, is qualified to do business and
in good standing in California; Xxx Xxxx'x Coventry
of Nevada, Inc., Homes Construction Co., an Arizona
corporation, is qualified to do business and in good
standing in Nevada; DEVCO is qualified to do business
in Arizona and Nevada; Xxx Xxxx Southwest Co., an
Arizona corporation, is qualified to do business and
in good standing in Texas; and Xxx Xxxx Texas Limited
Partnership, an Arizona limited partnership, is
qualified to do business in Arizona and Texas.
(iv) The Company has the authorized capital stock set
forth in the Prospectus/Prospectus Supplement;
(v) The 2,500,000 shares and 375,000 shares of the
Company's Common Stock issued on June 25 and July 25,
1991, respectively, in a registered public offering,
the approximately 1.1 million shares of the Company's
common stock publicly issued in August and September
1987 in an exchange offer for then outstanding notes,
the 333,333 shares of common stock of the Company
issued on September 25, 1983, upon exercise of
warrants, in a registered public offering and the
approximately 3.2 million shares of common stock of
the Company issued in connection with the
underwritten call in May and June 1992 of the
Company's 10-3/8% Convertible Subordinated Debentures
(none of which, we are informed, are now outstanding)
were all duly and validly authorized, fully paid,
non-assessable and not issued in violation of any
30
Warburg Dillon Read LLC.
Xxxxxxx, Xxxxx & Co.
Xxxxxxx Xxxxx Xxxxxx Inc.
NationsBanc Xxxxxxxxxx Securities LLC
February [ ], 1999
Page 30
preemptive rights provided by Arizona law or the
Articles of Incorporation or Bylaws of the Company as
then in effect (the Company was incorporated in
Arizona at the time of each of these issuances of
common stock). The 2,474,900 shares of the Company's
common stock issued on August 16, 1995 in a
registered public offering were all duly and validly
authorized, fully paid, non-assessable and not issued
in violation of any preemptive rights provided by
Delaware law or the Certificate of Incorporation or
Bylaws of the Company as then in effect;
(vi) To our knowledge, there are no actions, suits or
proceedings pending or threatened in writing against
the Company or any of the Material Subsidiaries or
any of their respective properties, at law or in
equity or before or by any commission, board, body,
authority or agency, that are required to be
described in the Prospectus/Prospectus Supplement but
are not so described;
(vii) The Underwriting Agreement has been duly authorized,
executed and delivered by the Company;
(viii) The Debentures have been duly authorized by the
Company and, when executed, issued and authenticated
in accordance with the terms of the Indenture and
delivered and paid for in accordance with the terms
of the Underwriting Agreement, will be entitled to
the benefits of the Indenture and will be legal,
valid and binding obligations of the Company,
enforceable against the Company in accordance with
their terms, and the Debentures and the Indenture
conform to the descriptions thereof in the Prospec-
tus/Prospectus Supplement;
(ix) The Indenture has been duly authorized, executed and
delivered by the Company and is a legal, valid and
binding agreement of the Company, enforceable against
the Company in accordance with its terms, and the
Indenture has been qualified under the Trust
Indenture Act;
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(x) The execution, delivery and performance of the
Underwriting Agreement and the Indenture, the
issuance and sale of the Debentures by the Company
and the consummation of the other transactions
contemplated by the Underwriting Agreement and the
Indenture will not result in any breach of or
constitute a default under (or constitute an event
which with notice, lapse of time or both would
constitute a breach of or default under): (A) the
Certificate of Incorporation or Bylaws of the
Company; (B) any indenture, mortgage, deed of trust,
bank loan or credit agreement or other similar
written agreement or instrument that was filed, or
incorporated by reference, as an exhibit to the
Company's Annual Report on Form 10-K for its fiscal
year ended June 30, 1998 filed with the Commission or
that is referred to in the Prospectus/Prospectus
Supplement; (C) the Company's 9-3/4% Senior
Subordinated Debentures due 2003; (D) the Company's
9% Senior Subordinated Debentures due 2006; (E) the
Company's 9-3/4% Senior Subordinated Debentures due
2008; (F) the Company's 9-3/8% Senior Subordinated
Debentures due 2009; (G) any federal or Arizona
state statute, regulation or rule applicable to the
Company (with respect to the execution, delivery and
performance of the Indenture and the issuance and
sale of the Debentures only, provided that no opinion
is expressed as to state securities or Blue Sky laws
or the rules and regulations under any of them or as
to any misstatements or omissions in the
Registration Statement, Prospectus or
Prospectus/Prospectus Supplement); (H) the Delaware
General Corporation Law (with respect to the
execution, delivery and performance of the Indenture
and the issuance and sale of the Debentures only,
provided that no opinion is expressed as to state
securities or Blue Sky laws or the rules and
regulations under any of them or as to any
misstatements or omissions in the Registration
Statement, Prospectus or Prospectus/Prospectus
Supplement); or (I) any license, decree, judgment or
order applicable to the Company and known to us (with
respect to the execution, delivery and performance of
the Indenture and the issuance and sale of the
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Debentures only, provided that no opinion is
expressed as to state securities or Blue Sky laws or
the rules and regulations under any of them or as to
any misstatements or omissions in the Registration
Statement, Prospectus or Prospectus/Prospectus
Supplement);
(xi) No consent, approval, authorization, order or
qualification of or registration with any federal or
Arizona, Delaware (to the extent required by the
Delaware General Corporation Law) or New York state
governmental or regulatory commission, board, body,
authority or agency is required for the issuance or
sale of the Debentures by the Company as contemplated
by the Underwriting Agreement and the Indenture,
other than as has been accomplished under the
Securities Act and the Trust Indenture Act and for
filing of the Indenture under the Securities Act
(which, we understand, is anticipated to be timely
done by the Company by the filing of a Current Report
on Form 8-K to which such document will be an
exhibit), provided that we express no opinion as to
any necessary qualification or registration, or
exemption therefrom, under any state securities or
Blue Sky laws;
(xii) The Registration Statement has become effective under
the Securities Act and, to our knowledge, no stop
order proceedings with respect thereto are pending or
threatened under the Securities Act;
(xiii) To our knowledge, neither the Company nor any of the
Material Subsidiaries is in breach of or in default
under (nor has any event occurred that with notice,
lapse of time or both would constitute a breach of or
default under): (a) any indenture, mortgage, deed of
trust, bank loan or credit agreement or other written
agreement or instrument identified or described in
subparagraph (x)(B), (C), (D), (E) and (F) above; or
(b) any federal or Arizona, California, Delaware,
Nevada, South Carolina, Texas, Illinois or Florida
state or local license, decree, judgment or order
applicable to the
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Company or any of the Material Subsidiaries and known
to us; in each case in clauses (a) and (b) where such
breach or default could have a material adverse
affect on the consolidated financial position,
prospects, shareholders' equity or results of
operations of the Company and its subsidiaries taken
as a whole;
(xiv) To our knowledge, there are no contracts, licenses,
agreements, leases or documents of a character that
are required to be filed as exhibits to the
Registration Statement or to be summarized or
described in the Prospectus/Prospectus Supplement
that have not been so filed, summarized or described;
and
(xv) The Registration Statement and the Prospectus/
Prospectus Supplement (except as to the financial
statements, financial statement notes and financial
statement schedules and other financial and
statistical data contained or incorporated by
reference therein and in the Exhibits thereto
(including the T-1), as to which we express no
opinion or make no other statement) comply as to form
in all material respects with the applicable
requirements of the Securities Act and the Trust
Indenture Act and the rules and regulations under
both; the documents incorporated by reference in
the Registration Statement and the Prospec-
tus/Prospectus Supplement when they were filed or, if
an amendment with respect to any such document was
filed, when such amendment was filed (except as to
financial statements, financial statement notes and
financial statement schedules and other financial and
statistical data contained therein, as to which we
express no opinion or make no other statement),
complied as to form in all material respects with the
then applicable requirements of the Securities
Exchange Act of 1934, as amended, and the rules and
regulations thereunder.
(xvi) The Statements in the Prospectus/Prospectus
Supplement under the caption "Certain Federal Tax
Matters," to the extent
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they constitute statements of United States federal
tax laws, are correct in all material respects.
(xvii) Neither the Company nor any of its subsidiaries is an
"investment company" within the meaning of the
Investment Company Act of 1940, as amended, or is
subject to regulation thereunder.
During the course of the preparation of the
Prospectus/Prospectus Supplement, we participated in conferences with
representatives of the Company, its independent accountants, you and your
counsel, at which conferences the contents of the Registration Statement,
Prospectus and Prospectus/Prospectus Supplement and related matters were
discussed. We have not independently verified the accuracy, completeness or
fairness of the statements contained in the Registration Statement, Prospectus
or Prospectus/Prospectus Supplement and the nature of our participation is such
that we are unable to assume, and do not assume, any responsibility for the
accuracy, completeness or fairness of such statements. However, based upon our
participation as described in this paragraph, we have no reason to believe and
do not believe that the Registration Statement, Prospectus or the
Prospectus/Prospectus Supplement or any documents incorporated by reference
therein (provided that we express no opinion and make no other statement as to
the financial statements, financial statement notes and financial statement
schedules and other financial and statistical data contained therein or with
respect to the T-1), as of their respective effective or issue dates and as of
the date hereof, contained or contains any untrue statement of a material fact
or omitted or omits 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.
Our opinion set forth in paragraphs (viii) and (ix) above is
subject to (a) the effect of applicable bankruptcy, reorganization, insolvency,
moratorium and other similar laws and court decisions of general application,
including without limitation, statutory or other laws regarding fraudulent or
preferential transfers relating to, limiting or affecting the enforcement of
creditors' rights generally and (b) general principles of equity which may limit
the enforceability of any of the remedies, covenants or other provisions of the
Debentures and the Indenture, as well as the availability of injunctive relief
or other equitable remedies, and the application of principles of equity
(regardless of whether enforcement is considered in
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proceedings at law or in equity) as such principles relate to, limit or affect
the enforcement of creditors' rights generally. In addition, we express no
opinion as to: (a) any provisions of the Debentures or the Indenture regarding
the remedies available to any person (1) to take discretionary action that is
arbitrary, unreasonable or capricious or is not taken in good faith or in a
commercially reasonable manner, whether or not such action is permitted under
the Debentures or the Indenture, or (2) for violations or breaches that are
determined by a court to be non-material; (b) with respect to subparagraphs
(x)(B), (C), (D), (E) and (F), whether compliance by the Company with Sections
4.14 or 4.15 of the Indenture, by making a "Change of Control Offer" or a "Net
Worth Offer" (as defined therein), the creation of a lien on property of the
Company under the fourth paragraph of Section 7.07 of the Indenture or the
existence of a "Default" or "Event of Default" under Article 6 of the Indenture
will constitute a default, event of default or cross-default under any of the
indentures, mortgages, deeds of trust, bank loans or credit agreements or other
similar written agreements or instruments referred to in subparagraphs (x)(B),
(C), (D), (E) and (F); (c) with respect to whether acceleration of the
Debentures may affect the collectibility of that portion of the stated principal
amount thereof that might be determined to constitute unearned interest thereon;
(d) the enforceability of the waivers of rights or defenses provided for in
Section 4.12 of the Indenture; or (e) the enforceability under certain
circumstances under law or court decisions of provisions providing for the
indemnification of or contribution to a party with respect to a liability where
such indemnification or contribution is contrary to public policy. Our opinion
in paragraphs (viii) and (ix) is subject to the assumption that the Indenture
has been duly authorized, executed and delivered by the Trustee and the Agent
and constitutes a valid and binding agreement of the Trustee and the Agent,
enforceable against the Trustee and the Agent in accordance with its terms,
subject to exceptions of the type contained above in this paragraph.
This letter is limited to the facts and the law as they exist
on the date hereof. In addition, with respect to statements in this letter based
on our knowledge, (i) we have advised you only as to knowledge obtained by us in
connection with matters to which we have given substantive attention as counsel
to the Company in the form of legal consultation and (ii) such knowledge refers
only to the knowledge of the lawyers in our firm participating in the
preparation of the Registration Statement and the Prospectus/Prospectus
Supplement (being Xxxxxx Xxxxxx, Xxxxxxx Xxxxxx, Xxxxx Xxxxx and ______________)
and not to the knowledge of every lawyer in our firm. The individuals mentioned
above are those whom, we believe, are the
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appropriate persons of whom to inquire in rendering the opinions given as to our
knowledge herein. Please be advised that (a) our firm has not represented the
Company or any of its subsidiaries in any real property-related matters or given
substantive attention as counsel for the Company in the form of legal
consultation as to any license, decree, judgment or order as may exist with
respect to the business of Company and its subsidiaries (other than judgments or
orders favorable to the Company that are either not relevant to, or are
consistent with, the opinions expressed in this letter), (b) we are not
representing the Company in connection with any actual or threatened actions,
suits or proceedings and (c) except for a review of one of the certificates
referred to in paragraph (16), with your permission, we have not made any other
inquiries with respect thereto.
The Company is a Delaware corporation and, until it
reincorporated in Delaware in 1994, was an Arizona corporation. The Material
Subsidiaries are Arizona corporations, an Arizona limited liability company, an
Arizona limited partnership and a Delaware limited partnership. We are not
admitted to practice in Arizona or Delaware. However, we are generally familiar
with Title 10 of the Arizona Revised Statutes, Chapters 1-23 (Corporations and
Associations) and its predecessor statutes, the Delaware General Corporation Law
and the Delaware Revised Uniform Limited Partnership Act and, except as set
forth in the following sentence, have made such review thereof as we consider
necessary for the purpose of rendering the opinion contained in paragraphs (i),
(ii) (as to DEVCO), (iv), (v), (vii), (viii), (ix), (x)(A) and (xi) of this
opinion. Insofar as this opinion covers Arizona law (except with respect to
paragraph (iii) hereof), or Arizona, California, Delaware, Nevada, South
Carolina, Texas, Illinois or Florida state or local licenses, decrees, judgments
or orders and as to paragraphs (v), (xiii) (b) and (xiv), we have relied, with
your permission, on the opinion of Xxxxxxxxx X. Xxxxx, Esq., Vice President and
General Counsel of the Company, to you, a copy of which is attached hereto, and
(a) as to paragraphs (ii) (second sentence) (with respect to the Material
Subsidiaries other than DEVCO), (x)(G) (except as to federal law), (xi) (except
as to federal law and the Delaware General Corporation Law), and (xiii) such
reliance is, with your permission, exclusive and without any independent
verification and (b) our opinion is subject to the same qualifications,
assumptions and limitations as are set forth in that opinion. We believe you and
we are justified in relying on that opinion. Subject to the foregoing, this
opinion is limited to federal, Arizona, Delaware and New York law, to the extent
set forth above. With respect to the opinion in paragraphs (i) and (ii) as to
valid existence and good standing and with respect to the opinion in
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paragraph (iii), we have relied exclusively on certificates from the relevant
state authorities, except with respect to the qualification of DEVCO in Arizona,
in which case we have relied exclusively on oral advice from a representative of
the relevant state authority.
This letter is furnished to you in connection with the
Underwriting Agreement and the transactions contemplated thereby, is solely for
your benefit, may not be quoted in part by you or in whole or in part by any
other person and may not be relied upon by any other person or by you in any
other context.
Very truly yours,
XXXXXX, XXXX & XXXXXXXX LLP
38
ANNEX B
February [ ], 1999
Warburg Dillon Read LLC
Xxxxxxx, Xxxxx & Co.
Xxxxxxx Xxxxx Xxxxxx Inc.
NationsBanc Xxxxxxxxxx Securities LLC
c/o Warburg Dillon Read LLC
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: Xxx Xxxx Corporation
Public Offering of $200,000,000 of
[ ]% Senior Subordinated Debentures due 2010
Ladies and Gentlemen:
I am the General Counsel of Xxx Xxxx Corporation, a Delaware
corporation (the "Company"), and render this opinion to you pursuant to Section
6(b) of the Underwriting Agreement, dated February [ ], 1999, between each of
you and the Company (the "Underwriting Agreement") in connection with the sale
by the Company to you of $200 million of [ ]% Senior Subordinated Debentures due
2010 (the "Debentures").
In connection with my examination of documents as described
below, I have assumed the genuineness of all signatures on, and the authenticity
of, all documents submitted to me as originals and the conformity to original
documents of all documents submitted to me as copies. With respect to agreements
and instruments executed by natural persons, I have assumed the legal competency
of such persons.
For the purpose of rendering this opinion, I have made such
factual and legal inquiries as I deemed necessary under the circumstances and in
that connection I have examined, among other things, originals or copies of the
following:
(1) The registration statement on Form S-3 (Securities
Act file number 333-63671) filed by the Company with
the Securities and Exchange Commission (the
"Commission") on September 18, 1998 for the purpose
of registering the sale of various securities,
including Senior Subordinated Debt Securities, under
the Securities Act of 1933, as amended (the
"Securities Act"), the related Form T-1 filed with
the Commission for the
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purpose of qualifying the Indenture (defined below)
under the Trust Indenture Act of 1939, as amended
(the "Trust Indenture Act") and the prospectus
included as part of the Registration Statement
(defined below). The registration statement in the
form in which it became effective on October 22,
1998, including the documents incorporated by
reference therein to the extent not modified or
superseded thereby, is referred to below as the
"Registration Statement", the prospectus of the
Company dated October 22, 1998, including the
documents incorporated by reference therein to the
extent not modified or superseded thereby, is
referred to below as the "Prospectus" and the
Prospectus, as supplemented by the Prospectus
Supplement to Prospectus dated February [ ], 1999 in
the form filed by the Company with the Commission
pursuant to Rule 424(b) of the Rules and Regulations
adopted by the Commission under the Securities Act
(the "Rules"), including the documents incorporated
by reference therein to the extent not modified or
superseded thereby, is referred to below as the
"Prospectus/Prospectus Supplement";
(2) The Certificate of Incorporation of the Company
The Articles of Incorporation of Xxx Xxxx
Communities, Inc.,
Anthem Arizona, LLC
Bellasera Corp
Xxx Xxxx'x Coventry Homes, Inc.
Xxx Xxxx'x Coventry Homes Construction Co.
Xxx Xxxx Home Construction, Inc.
Xxx Xxxx'x Spruce Creek Communities, Inc.
Xxx Xxxx'x Sunflower of Tucson, Inc.
Terravita Home Construction Co.
Terravita Corp.
Xxx Xxxx'x Coventry Homes of Tucson, Inc.
Xxx Xxxx'x Coventry Homes Construction of Tucson Co.
Xxx Xxxx'x Coventry Homes of Nevada, Inc.
Xxx Xxxx Homes, Inc.
Xxx Xxxx Conservation Holding Corp.
Trovas Company
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Trovas Construction Company
Fairmount Mortgage, Inc.
Xxx Xxxx Limited Holding Co.
Xxx Xxxx Southwest Co. (each of which is an Arizona
corporation)
Certificate and Agreement of Limited Partnership of
Xxx Xxxx Texas Limited Partnership, an Arizona
limited partnership ("DW Texas L.P.") (together, the
"Material Subsidiaries");
(3) The Bylaws of the Company and of the Material
Subsidiaries that are corporations, as amended to
date;
(4) Minutes of meetings of the Boards of Directors of the
Company at which actions were taken with respect to
the transactions covered by this opinion and minutes
or records of other corporate proceedings;
(5) The action of the Chief Executive Officer of the
Company, dated as of February [ ], 1999, with respect
to the terms of the Debentures and the Indenture;
(6) The letters of KPMG LLP, dated February [ ], 1999,
and the date hereof, delivered pursuant to Section
6(d) of the Underwriting Agreement;
(7) The certificate, dated as of the date hereof,
delivered pursuant to Section 6(j) of the
Underwriting Agreement;
(8) The Indenture, dated as of February [ ], 1999,
between the Company and Bank of Montreal Trust
Company, as Trustee (the "Trustee"), pursuant to
which the Debentures are to be issued (the
"Indenture");
(9) The Certificate of the Trustee, dated as of the date
hereof, as to the due authentication of the
Debentures;
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(10) The Underwriting Agreement;
(11) Specimen certificate(s) representing the Debentures;
(12) The documents referred to in subparagraph (v)(A)-(F)
below and the indentures with respect to the
Company's 9-3/4% Senior Subordinated Debentures due
2003, 9% Senior Subordinated Debentures due 2006,
9-3/4% Senior Subordinated Debentures due 2008 and
9-3/8% Senior Subordinated Debentures due 2009;
(13) My opinions rendered in connection with the public
offerings by the Company of its 9-3/4% Senior
Subordinated Debentures due 2003, 9% Senior
Subordinated Debentures due 2006, 9-3/4% Senior
Subordinated Debentures due 2008 and 9-3/8% Senior
Subordinated Debentures due 2009 and 2,474,900 shares
of the Common Stock in August 1995; and
(14) Such other certificates and assurances from public
officials and officers and representatives of the
Company that I considered necessary or appropriate
for the purpose of rendering this opinion, copies of
which have been delivered to you.
Based on the foregoing and in reliance thereon, and subject to
the assumptions, qualifications and limitations set forth herein, I am of the
opinion that:
(i) Each of the Material Subsidiaries (except DW Texas
L.P.) is a corporation organized, validly existing
and in good standing under the laws of Arizona, and
DW Texas L.P. is a limited partnership organized and
validly existing under the laws of Arizona. Each
Material Subsidiary has the corporate or partner ship
(as to DW Texas L.P.) power to own its properties and
conduct its business, in each case as described in
the Prospectus/Prospectus Supplement;
(ii) The 2,500,000 shares and 375,000 shares of the
Company's
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common stock issued on June 25 and July 25, 1991,
respectively, in a registered public offering, the
approximately 1.1 million shares of the Company's
common stock publicly issued in August and September
1987 in an exchange offer for then outstanding notes,
the 333,333 shares of common stock of the Company
issued on September 25, 1983, upon exercise of
warrants, in a registered public offering and the
approximately 3.2 million shares of common stock of
the Company issued in connection with the
underwritten call in May and June 1992 of the Com-
pany's 10-3/8% Convertible Subordinated Debentures
(none of which, I am informed, are now outstanding)
were all duly and validly authorized, fully paid,
non-assessable and not issued in violation of any
preemptive rights provided by Arizona law or the
Articles of Incorporation or Bylaws of the Company as
then in effect (the Company was incorporated in
Arizona at the time of each of these issuances of
common stock);
(iii) To my knowledge and except for a 1989 lawsuit
challenging the issuance of the Company's 10-3/8%
Convertible Subordinated Debentures and the shares
issuable upon conversion thereof, which lawsuit was
dismissed without any payment by the Company to the
plaintiffs or their counsel, no shares of common
stock of the Company issued and outstanding as of the
date hereof have been or are the subject of any claim
or threatened claim that they were not duly
authorized, validly issued and non-assessable. Though
it is unclear precisely which statute of limitations
in Arizona law would govern any such claim, for
issuances when the Company was an Arizona
corporation, the limitation period by which any such
claim must be made is the later of six years from the
date of any issuance of shares or three years from
the date any claimant knew or should have known that
the applicable shares were not authorized, validly
issued and non-assessable;
(iv) The Underwriting Agreement and the Indenture have
been
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duly authorized, executed and delivered by the
Company;
(v) To my knowledge, none of the Company, any of the
Material Subsidiaries or Del X. Xxxx Development Co.,
L.P., a Delaware limited partnership ("DEVCO"), is in
breach of or in default under (nor has any event
occurred which with notice, lapse of time or both
would constitute a breach of or default under): (A)
any indenture, mortgage, deed of trust, bank loan or
credit agreement or other written agreement or
instrument which was filed, or incorporated by
reference, as an exhibit to the Company's Annual
Report on Form 10-K for its fiscal year ended June
30, 1998 filed with the Commission or which is
referred to in the Prospectus/Prospectus Supplement;
(B) the Company's 9-3/4% Senior Subordinated
Debentures due 2003; (C) the Company's 9% Senior
Subordinated Debentures due 2006; (D) the Company's
9-3/4% Senior Subordinated Debentures due 2008; (E)
the Company's 9-3/8% Senior Subordinated Debentures
due 2009; (F) the Company's Option Agreements with
respect to real property located in Lincoln,
California, near Hilton Head Island, South Carolina,
and in Georgetown, Texas, in each case which are
referred to in the Prospectus/Prospectus Supplement;
or (G) any federal or Arizona, California, Delaware,
Nevada, South Carolina, Texas, Illinois or Florida
state or local license, decree, judgment or order
applicable to the Company, any of the Material
Subsidiaries or DEVCO and known to me; in each case
in subparagraphs (A)-(G) above, where such breach or
default could have a material adverse effect on the
consolidated financial position, prospects,
shareholders' equity or results of operations of the
Company and its subsidiaries taken as a whole;
(vi) To my knowledge, there are no contracts, licenses,
agreements, leases or documents of a character which
are required to be filed as exhibits to the
Registration Statement or to be summarized or
described in the Prospectus/Prospectus Supplement
which have not been so filed, summarized or
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described;
(vii) The Debentures have been duly authorized, executed
and delivered by the Company;
(viii) No consent, approval, authorization, order or
qualification of or registration with any Arizona
state governmental or regulatory commission, board,
body, authority or agency is required for the
issuance or sale of the Debentures by the Company as
contemplated by the Underwriting Agreement, provided
that I express no opinion as to any necessary
qualification or registration, or exemption
therefrom, under Arizona state securities or Blue Sky
laws;
(ix) The execution, delivery and performance of the
Underwriting Agreement and the Indenture and the
issuance and sale of the Debentures by the Company
and the consummation of the transactions contemplated
by the Underwriting Agreement and the Indenture by
the Company will not result in any breach of or
constitute a default under (or constitute an event
which with notice, lapse of time or both would
constitute a breach of or default under): (A) any
indenture, mortgage, deed of trust, bank loan or
credit agreement or other written agreement or
instrument referred to in paragraphs (v)(A)-(F)
above, provided that no opinion is rendered as to
whether the making of a Charge of Control Offer or a
Net Worth Offer, as defined in and pursuant to
Sections 4.14 or 4.15 of the Indenture, respectively,
or creating a lien pursuant to the fourth paragraph
of Section 7.07 of the Indenture would result in such
a breach or default (or event which with notice,
lapse of time or both would constitute such a breach
of default); (B) any Arizona, California, Delaware,
Nevada, South Carolina, Texas, Illinois or Florida
state statute, regulation or rule applicable to the
Company, any of the Material Subsidiaries or DEVCO
(with respect to the execution, delivery and
performance of the Indenture and the sale of the
Debentures only, provided that no opinion is
expressed as to state securities or Blue Sky laws or
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the rules and regulations under any of them or as
to any misstatements or omissions in the Registration
Statement, Prospectus or Prospectus/Prospectus
Supplement); or (C) any license, decree, judgment or
order applicable to the Company, any of the Material
Subsidiaries or DEVCO and known to me (with respect
to the execution, delivery and performance of the
Indenture and the sale of the Debentures only,
provided that no opinion is expressed as to state
securities or Blue Sky laws or the rules and
regulations under any of them or as to any
misstatements or omissions in the Registration
Statement, Prospectus or Prospectus/Prospectus
Supplement);
(x) To my knowledge, there are no actions, suits or
proceedings pending or threatened in writing against
the Company, any of the Material Subsidiaries or
DEVCO, or any of their respective properties, at law
or in equity or before or by any commission, board,
body, authority or agency, which are required to be
described in the Prospectus/Prospectus Supplement,
but are not so described; and
(xi) The Company owns, directly or indirectly, all of the
"Common Equity" (as defined in the Indenture) of each
of the Material Subsidiaries and DEVCO.
During the course of the preparation of the
Prospectus/Prospectus Supplement, I participated in conferences with
representatives of the Company, its independent accountants, you and your
counsel, at which conferences the contents of the Registration Statement,
Prospectus and Prospectus/Prospectus Supplement and related matters were
discussed. I have not independently verified the accuracy, completeness or
fairness of the statements contained in the Registration Statement, Prospectus
or Prospectus/Prospectus Supplement and the nature of my participation is such
that I am unable to assume, and do not assume, any responsibility for the
accuracy, completeness or fairness of such statements. However, based upon my
participation as described in this paragraph, I have no reason to believe and do
not believe that the Registration Statement, the Prospectus or the
Prospectus/Prospectus Supplement (provided that I express no opinion and make no
other statement as to the financial statements, financial statement notes and
financial statement schedules
46
Warburg Dillon Read LLC.
Xxxxxxx, Xxxxx & Co.
Xxxxxxx Xxxxx Xxxxxx Inc.
NationsBanc Xxxxxxxxxx Securities LLC
February [ ], 1999
Page 46
and other financial and statistical data contained or incorporated by reference
therein or with respect to the T-1), as of their respective effective or issue
date and as of the date hereof, contained or contains any untrue statement of a
material fact or omitted or omits 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.
This letter is limited to the facts and the law as they exist
on the date hereof. In addition, with respect to statements in this letter based
on my knowledge, I have advised you only as to knowledge obtained by me in
connection with matters to which I have given substantive attention as General
Counsel of the Company in the form of legal consultation and knowledge obtained
by me from consultation with attorneys in the legal department of the Company
concerning the opinions set forth above with respect to their knowledge in
connection with matters to which they have given substantive attention as
attorneys for the Company in the form of legal consultation.
This opinion is limited to Arizona law. The statements herein
as to California, Delaware, Nevada, South Carolina, Texas, Illinois and Florida
state or local statutes, regulations, rules, licenses, decrees, judgments or
orders are as to my knowledge and not an opinion with respect thereto. This
letter is furnished to you in connection with the Underwriting Agreement and the
transactions contemplated thereby, is solely for your benefit, may not be quoted
in part by you or in whole or in part by any NationsBanc Xxxxxxxxxx Securities
LLC February [ ], 1999 Page 10 other person and may not be relied upon by any
other person or by you in any other context, provided that this letter may be
relied upon by Xxxxxx, Xxxx & Xxxxxxxx LLP in connection with its opinion
pursuant to Section 6(a) of the Underwriting Agreement and in any opinion to the
Trustee and may be attached to those opinions.
Very truly yours,
XXXXXXXXX X. XXXXX
