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EXHIBIT 1.1
3,500,000 SHARES
SILVERLEAF VACATION CLUB
COMMON STOCK
UNDERWRITING AGREEMENT
May ___, 1997
CREDIT SUISSE FIRST BOSTON CORPORATION
EVEREN SECURITIES
XXXXXXXX & COMPANY SECURITIES, INC.
As Representatives of the Several Underwriters,
c/o Credit Suisse First Boston Corporation,
Eleven Madison Avenue,
New York, N.Y. 10010-3629
Dear Sirs:
1. Introductory. Silverleaf Resorts, Inc., a Texas corporation
("Company"), proposes to issue and sell 3,500,000 shares ("Firm Securities") of
its Common Stock ("Securities") and also proposes to issue and sell to the
Underwriters, at the option of the Underwriters, an aggregate of not more than
525,000 additional shares ("Optional Securities") of its Securities as set
forth below. The Firm Securities and the Optional Securities are herein
collectively called the "Offered Securities". The Company hereby agrees with
the several Underwriters named in Schedule A hereto ("Underwriters") as
follows:
2. Representations and Warranties of the Company. The Company
represents and warrants to, and agrees with, the several Underwriters that:
(a) A registration statement (No. 333-24273) relating to
the Offered Securities, including a form of prospectus, has been filed
with the Securities and Exchange Commission ("Commission") and either
(i) has been declared effective under the Securities Act of 1933
("Act") and is not proposed to be amended or (ii) is proposed to be
amended by amendment or post-effective amendment. If such registration
statement ("initial registration statement") has been declared
effective, either (i) an additional registration statement
("additional registration statement") relating to the Offered
Securities may have been filed with the Commission pursuant to Rule
462(b) ("Rule 462(b)") under the Act and, if so filed, has become
effective upon filing pursuant to such Rule and the Offered Securities
all have been duly registered under the Act pursuant to the initial
registration statement and, if applicable, the additional registration
statement or (ii) such an additional registration statement is
proposed to be filed with the Commission pursuant to Rule 462(b) and
will become effective upon filing pursuant to such Rule and upon such
filing the Offered Securities will all have been duly registered under
the Act pursuant to the initial registration statement and such
additional registration statement. If the Company does not propose to
amend the initial registration statement or if an additional
registration statement has been filed and the Company does not propose
to amend it, and if any post- effective amendment to either such
registration statement has been filed with the Commission prior to the
execution and delivery of this Agreement, the most recent amendment
(if any) to each such registration statement has been declared
effective by the Commission or has become effective upon filing
pursuant to Rule 462(c) ("Rule 462(c)") under the Act or, in the case
of the additional
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registration statement, Rule 462(b). For purposes of this Agreement,
"Effective Time" with respect to the initial registration statement
or, if filed prior to the execution and delivery of this Agreement,
the additional registration statement means (i) if the Company has
advised the Representatives that it does not propose to amend such
registration statement, the date and time as of which such
registration statement, or the most recent post-effective amendment
thereto (if any) filed prior to the execution and delivery of this
Agreement, was declared effective by the Commission or has become
effective upon filing pursuant to Rule 462(c), or (ii) if the Company
has advised the Representatives that it proposes to file an amendment
or post- effective amendment to such registration statement, the date
and time as of which such registration statement, as amended by such
amendment or post-effective amendment, as the case may be, is declared
effective by the Commission. If an additional registration statement
has not been filed prior to the execution and delivery of this
Agreement but the Company has advised the Representatives that it
proposes to file one, "Effective Time" with respect to such additional
registration statement means the date and time as of which such
registration statement is filed and becomes effective pursuant to Rule
462(b). "Effective Date" with respect to the initial registration
statement or the additional registration statement (if any) means the
date of the Effective Time thereof. The initial registration
statement, as amended at its Effective Time, including all information
contained in the additional registration statement (if any) and deemed
to be a part of the initial registration statement as of the Effective
Time of the additional registration statement pursuant to the General
Instructions of the Form on which it is filed and including all
information (if any) deemed to be a part of the initial registration
statement as of its Effective Time pursuant to Rule 430A(b) ("Rule
430A(b)") under the Act, is hereinafter referred to as the "Initial
Registration Statement". The additional registration statement, as
amended at its Effective Time, including the contents of the initial
registration statement incorporated by reference therein and including
all information (if any) deemed to be a part of the additional
registration statement as of its Effective Time pursuant to Rule
430A(b), is hereinafter referred to as the "Additional Registration
Statement". The Initial Registration Statement and the Additional
Registration Statement are herein referred to collectively as the
"Registration Statements" and individually as a "Registration
Statement". The form of prospectus relating to the Offered Securities,
as first filed with the Commission pursuant to and in accordance with
Rule 424(b) ("Rule 424(b)") under the Act or (if no such filing is
required) as included in a Registration Statement, is hereinafter
referred to as the "Prospectus". No document has been or will be
prepared or distributed in reliance on Rule 434 under the Act.
(b) If the Effective Time of the Initial Registration
Statement is prior to the execution and delivery of this Agreement:
(i) on the Effective Date of the Initial Registration Statement, the
Initial Registration Statement conformed in all respects to the
requirements of the Act and the rules and regulations of the
Commission ("Rules and Regulations") and did not include any untrue
statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements
therein not misleading, (ii) on the Effective Date of the Additional
Registration Statement (if any), each Registration Statement
conformed, or will conform, in all respects to the requirements of the
Act and the Rules and Regulations and did not include, or will not
include, any untrue statement of a material fact and did not omit, or
will not omit, to state any material fact required to be stated
therein or necessary to make the statements therein not misleading and
(iii) on the date of this Agreement, the Initial Registration
Statement and, if the Effective Time of the Additional Registration
Statement is prior to the execution and delivery of this Agreement,
the Additional Registration Statement each conforms, and at the time
of filing of the Prospectus pursuant to Rule 424(b) or (if no such
filing is required) at the Effective Date of the Additional
Registration Statement in which the Prospectus is included, each
Registration Statement and the Prospectus will conform, in all
respects to the requirements of the Act and the Rules and Regulations,
and neither of such documents includes, or will include, any untrue
statement of a material fact or omits, or will omit, to state any
material fact required to be stated therein or necessary to make the
statements therein not misleading. If the Effective Time of the
Initial Registration Statement is subsequent to the execution and
delivery of this Agreement: on the Effective Date of the Initial
Registration Statement, the Initial Registration Statement and the
Prospectus will conform in all respects to the requirements of the Act
and the Rules and Regulations, neither of such documents will include
any untrue statement of a material fact or will omit to state any
material fact required to be stated therein or necessary to make the
statements therein not misleading, and no Additional Registration
Statement has been or will be filed. The
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two preceding sentences do not apply to statements in or omissions
from a Registration Statement or the Prospectus based upon written
information furnished to the Company by any Underwriter through the
Representatives specifically for use therein, it being understood and
agreed that the only such information is that described as such in
Section 7(b) hereof.
(c) The Company has been duly incorporated and is an
existing corporation in good standing under the laws of the State of
Texas, with power and authority (corporate and other) to own its
properties and conduct its business as described in the Prospectus;
and the Company is duly qualified to do business as a foreign
corporation in good standing in all other jurisdictions in which its
ownership or lease of property or the conduct of its business requires
such qualification.
(d) Each subsidiary of the Company has been duly
incorporated and is an existing corporation in good standing under the
laws of the jurisdiction of its incorporation, with power and
authority (corporate and other) to own its properties and conduct its
business as described in the Prospectus; and each subsidiary of the
Company is duly qualified to do business as a foreign corporation in
good standing in all other jurisdictions in which its ownership or
lease of property or the conduct of its business requires such
qualification; all of the issued and outstanding capital stock of each
subsidiary of the Company has been duly authorized and validly issued
and is fully paid and nonassessable; and the capital stock of each
subsidiary owned by the Company, directly or through subsidiaries, is
owned free from liens, encumbrances and defects.
(e) Each of Master Club, Hill Country Resort Club, Xxxxx
Lake Resort Club, Piney Shores Resort Club, Villages Resort Club, The
Villages Club, Holiday Hills Resort Club, Ozark Mountain Resort Club,
Holiday Hills Condominium Association, Inc., The Bluffs at Holiday
Hills Condominium Association, Inc., The Lakes at Holiday Hills
Condominium Association, Inc., the Oaks at Holiday Hills Condominium
Association, Inc., The Pinnacle at Holiday Hills Condominium
Association, Inc., Ozark Mountain Condominium Association, Inc., The
Coves at Waters Bluff Condominium Association, Inc., Streamside at
Ozark Mountain Condominium Association, Inc., Waters Bluff at Ozark
Mountain Condominium Association, Inc., Xxxxx Lake Ranch Association,
The Villages Home Owners' Association, Inc., Holiday Hills Property
Owners Association, Inc. and The Ozark Mountain Boat Dock Association
(collectively, the "Clubs") has been duly formed and is an existing
nonprofit corporation or unincorporated association and is in good
standing under the laws of the jurisdiction of its formation, with
power and authority to own its properties and conduct its business as
described in the Prospectus; and each Club is duly qualified to do
business and in good standing in all other jurisdictions in which its
ownership or lease of property or the conduct of its business requires
such qualification.
(f) The Offered Securities and all other outstanding
shares of capital stock of the Company have been duly authorized; all
outstanding shares of capital stock of the Company are, and, when the
Offered Securities have been delivered and paid for in accordance with
this Agreement on each Closing Date (as defined below), such Offered
Securities will have been, validly issued, fully paid and
nonassessable and will conform to the description thereof contained in
the Prospectus; and the stockholders of the Company have no preemptive
rights with respect to the Securities.
(g) Except as disclosed in the Prospectus, there are no
contracts, agreements or understandings between the Company and any
person that would give rise to a valid claim against the Company or
any Underwriter for a brokerage commission, finder's fee or other like
payment in connection with this offering.
(h) Except as disclosed in the Prospectus, there are no
contracts, agreements or understandings between the Company and any
person granting such person the right to require the Company to file a
registration statement under the Act with respect to any securities of
the Company owned or to be owned by such person or to require the
Company to include such securities in the securities registered
pursuant to a Registration Statement or in any securities being
registered pursuant to any other registration statement filed by the
Company under the Act.
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(i) The Offered Securities have been approved for listing
on The New York Stock Exchange subject to notice of issuance.
(j) No consent, approval, authorization, or order of, or
filing with, any governmental agency or body or any court is required
for the consummation of the transactions contemplated by this
Agreement in connection with the issuance and sale of the Offered
Securities by the Company, except such as have been obtained and made
under the Act and such as may be required under state securities laws.
(k) The execution, delivery and performance of this
Agreement, and the issuance and sale of the Offered Securities will
not result in a breach or violation of any of the terms and provisions
of, or constitute a default under, any statute, any rule, regulation
or order of any governmental agency or body or any court, domestic or
foreign, having jurisdiction over the Company, any subsidiary of the
Company or any Club or any of their properties, or any agreement or
instrument to which the Company, any such subsidiary or any such Club
is a party or by which the Company, any such subsidiary or any such
Club is bound or to which any of the properties of the Company, any
such subsidiary or any such Club is subject, or the charter or by-laws
of the Company, any such subsidiary or any such Club, and the Company
has full power and authority to authorize, issue and sell the Offered
Securities as contemplated by this Agreement.
(l) This Agreement has been duly authorized, executed and
delivered by the Company.
(m) Deloitte & Touche LLP and Xxxxx X. Xxxxx & Company
are independent public accountants with respect to the Company as
required by the Act.
(n) Except as disclosed in the Prospectus, the Company,
its subsidiaries and the Clubs have good and marketable title to all
real properties and all other properties and assets owned by them, in
each case free from liens, encumbrances and defects that would
materially affect the value thereof or materially interfere with the
use made or to be made thereof by them; and except as disclosed in the
Prospectus, the Company, its subsidiaries and the Clubs hold any
leased real or personal property under valid and enforceable leases
with no exceptions that would materially interfere with the use made
or to be made thereof by them.
(o) The Company, its subsidiaries and the Clubs possess
adequate certificates, authorities or permits issued by appropriate
governmental agencies or bodies necessary to conduct the business now
operated by them and have not received any notice of proceedings
relating to the revocation or modification of any such certificate,
authority or permit that, if determined adversely to the Company, any
of its subsidiaries or any of the Clubs, would individually or in the
aggregate have a material adverse effect on the Company and its
subsidiaries taken as a whole.
(p) No labor dispute with the employees of the Company,
any subsidiary or any Club exists or, to the knowledge of the Company,
is imminent that might have a material adverse effect on the Company
and its subsidiaries taken as a whole.
(q) The Company, its subsidiaries and the Clubs own,
possess or can acquire on reasonable terms, adequate trademarks, trade
names and other rights to inventions, know-how, patents, copyrights,
confidential information and other intellectual property
(collectively, "intellectual property rights") necessary to conduct
the business now operated by them, or presently employed by them, and
have not received any notice of infringement of or conflict with
asserted rights of others with respect to any intellectual property
rights that, if determined adversely to the Company, any of its
subsidiaries or the Clubs, would individually or in the aggregate have
a material adverse effect on the Company and its subsidiaries taken as
a whole.
(r) Except as disclosed in the Prospectus, neither the
Company, any of its subsidiaries nor any Club is in violation of any
statute, any rule, regulation, decision or order of any governmental
agency
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or body or any court, domestic or foreign, relating to the use,
disposal or release of hazardous or toxic substances or relating to
the protection or restoration of the environment or human exposure to
hazardous or toxic substances (collectively, "environmental laws"),
owns or operates any real property contaminated with any substance
that is subject to any environmental laws, is liable for any off-site
disposal or contamination pursuant to any environmental laws, or is
subject to any claim relating to any environmental laws, which
violation, contamination, liability or claim would individually or in
the aggregate have a material adverse effect on the Company and its
subsidiaries taken as a whole; and the Company is not aware of any
pending investigation which might lead to such a claim.
(s) Except as disclosed in the Prospectus, there are no
pending actions, suits, proceedings, inquiries, arbitrations,
investigations, litigation or governmental proceedings against or
affecting the Company, any of its subsidiaries, any of the Clubs or
any of their respective properties that, if determined adversely to
the Company, any of its subsidiaries or any of the Clubs, would
individually or in the aggregate have a material adverse effect on the
condition (financial or other), business, properties or results of
operations of the Company and its subsidiaries taken as a whole, or
would materially and adversely affect the ability of the Company to
perform its obligations under this Agreement, or which are otherwise
material in the context of the sale of the Offered Securities; and no
such actions, suits, proceedings, inquiries, arbitrations,
investigations, litigation or governmental proceedings are threatened
or, to the Company's knowledge, contemplated. None of the Company,
any of its subsidiaries or any of the Clubs is a party or subject to
the provisions of any injunction, judgment, decree or order of any
court, regulatory body, administrative agency or other governmental
body which would individually or in the aggregate have a material
adverse effect on the Company and its subsidiaries taken as a whole.
(t) The financial statements included in each
Registration Statement and the Prospectus present fairly the financial
position of the Company and its consolidated subsidiaries as of the
dates shown and their results of operations and cash flows for the
periods shown, and such financial statements have been prepared in
conformity with the generally accepted accounting principles in the
United States applied on a consistent basis; and the schedules
included in each Registration Statement present fairly the information
required to be stated therein and the assumptions used in preparing
the pro forma financial statements included in each Registration
Statement and the Prospectus provide a reasonable basis for presenting
the significant effects directly attributable to the transactions or
events described therein, the related pro forma adjustments give
appropriate effect to those assumptions, and the pro forma columns
therein reflect the proper application of those adjustments to the
corresponding historical financial statement amounts.
(u) Except as disclosed in the Prospectus, since the date
of the latest audited financial statements included in the Prospectus
there has been no material adverse change, nor any development or
event involving a prospective material adverse change, in the
condition (financial or other), business, properties or results of
operations of the Company and its subsidiaries taken as a whole, and,
except as disclosed in or contemplated by the Prospectus, there has
been no dividend or distribution of any kind declared, paid or made by
the Company on any class of its capital stock.
(v) The Company is not and, after giving effect to the
offering and sale of the Offered Securities and the application of the
proceeds thereof as described in the Prospectus, will not be an
"investment company" as defined in the Investment Company Act of 1940.
(w) Except as disclosed in the Prospectus, the Company,
its subsidiaries and the Clubs have and maintain liability, property
and casualty insurance (insured by insurers of recognized financial
responsibility) in favor of the Company, its subsidiaries and the
Clubs with respect to each of the timeshare resorts operated by the
Company ("Resorts") in an amount and on such terms as is reasonable
and customary for businesses of the type proposed to be conducted by
the Company, its subsidiaries and the Clubs, including, among other
things, insurance against theft, damage, destruction and acts of
vandalism. None of the Company, any of its subsidiaries or any of the
Clubs has received from any insurance company notice of any material
defects or deficiencies affecting the insurability of any such Resort.
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(x) Title insurance in favor of the Company, is in force
with respect to each of the Resorts in an amount reasonably acceptable
to the Representatives.
(y) Except as disclosed in the Prospectus, all
entitlements necessary for development of the Resorts have been
obtained, and no further governmental or regulatory approvals are
necessary for additional development of the Resorts.
(z) The mortgages and deeds of trust encumbering the
Resorts are not convertible and such mortgages and deeds of trust are
not cross-defaulted or cross-collateralized to any Resort not owned
directly or indirectly by the Company.
(aa) No environmental engineering firm which prepared
Phase I environmental assessment reports (or other similar reports)
with respect to the Resorts as set forth in the Registration Statement
was employed for such purpose on a contingent basis or has any
substantial interest in the Company, any of its subsidiaries or any
Club.
(ab) Except as disclosed in the Prospectus, the Company,
its subsidiaries and the Clubs are in compliance with all federal,
state, local and foreign laws and regulations regarding the marketing,
advertising, offers to sell and sales of vacation intervals in each
state in which the Company, its subsidiaries and the Clubs are doing
business, including but not limited to the Federal Trade Commission
Act, Regulation Z (the truth-in-lending act), Equity Opportunity
Credit Act and Regulation B, Interstate Land Sales Full Disclosure
Act, Real Estate Standards Practices Act, Telephone Consumer
Protection Act, Telemarketing and Consumer Fraud and Abuse Prevention
Act, Fair Housing Act and Civil Rights Acts of 1964 and 1968, in each
case except as would not have a material adverse effect on the Company
and its subsidiaries taken as a whole. Except as disclosed in the
Prospectus, the Company, its subsidiaries and the Clubs have filed all
required documents and supporting information in compliance with
federal, state, local and foreign laws and regulations, and the
Company, its subsidiaries and the Clubs are in compliance with all
licensure, anti-fraud, telemarketing, price, gift and sweepstakes and
labor laws to which they are or may become subject, in each case
except as would not have a material adverse effect on the Company and
its subsidiaries taken as a whole. The Company, its subsidiaries and
the Clubs have all permits and licenses which are required to sell
vacation intervals in each state and foreign jurisdiction where they
conduct business, in each case except as would not have a material
adverse effect on the Company and its subsidiaries taken as a whole.
(ac) The timeshare interests ("Vacation Intervals") do not
constitute "securities" under the Act. Neither the offer, the sale
nor the issuance of Vacation Intervals by the Company or any of the
subsidiaries required registration under the Act or under the
securities laws of the state of Texas or under any other state
securities laws nor does the fact that such interests are outstanding
require registration under the Securities Act of 1934.
(ad) No person has an option or right of first refusal to
purchase all or part of any of the Resorts or any interest therein.
Each of the Resorts complies with all applicable codes, laws and
regulations (including, without limitation, building and zoning codes
and laws relating to handicapped access), except as would not have a
material adverse effect on the Company and its subsidiaries taken as a
whole. Except as disclosed in the Prospectus, the Company has no
knowledge of any pending or threatened condemnation proceedings,
zoning changes, or other proceedings or actions that will in any
manner affect the size of, number of Vacation Intervals planned for,
the use of any improvements on, or access to, the Resorts.
(ae) The Company will apply the net proceeds from the
offering of the Offered Securities in the manner set forth under "Use
of Proceeds" in the Prospectus, and the Company will file timely and
accurate reports on Form SR with the Commission in accordance with
Rule 463 under the Act or any successor provision.
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3. Purchase, Sale and Delivery of Offered Securities. On the
basis of the representations, warranties and agreements herein contained, but
subject to the terms and conditions herein set forth, the Company agrees to
sell to the Underwriters, and the Underwriters agree, severally and not
jointly, to purchase from the Company, at a purchase price of $ per
share, the respective numbers of shares of Firm Securities set forth opposite
the names of the Underwriters in Schedule A hereto.
The Company will deliver the Firm Securities to the Representatives
for the accounts of the Underwriters, against payment of the purchase price in
Federal (same day) funds by official bank check or checks or wire transfer to
an account at a bank acceptable to Credit Suisse First Boston Corporation
("CSFBC") drawn to the order of at the office of
, at A.M., New York time, on
, or at such other time not later than seven full
business days thereafter as CSFBC and the Company determine, such time being
herein referred to as the "First Closing Date". For purposes of Rule 15c6-1
under the Securities Exchange Act of 1934, the First Closing Date (if later
than the otherwise applicable settlement date) shall be the settlement date for
payment of funds and delivery of securities for all the Offered Securities sold
pursuant to the offering. The certificates for the Firm Securities so to be
delivered will be in definitive form, in such denominations and registered in
such names as CSFBC requests and will be made available for checking and
packaging at the office of at least 24 hours prior to the
First Closing Date.
In addition, upon written notice from CSFBC given to the Company from
time to time not more than 30 days subsequent to the date of the Prospectus,
the Underwriters may purchase all or less than all of the Optional Securities
at the purchase price per Security to be paid for the Firm Securities. The
Company agrees to sell to the Underwriters the number of shares of Optional
Securities specified in such notice and the Underwriters agree, severally and
not jointly, to purchase such Optional Securities. Such Optional Securities
shall be purchased for the account of each Underwriter in the same proportion
as the number of shares of Firm Securities set forth opposite such
Underwriter's name bears to the total number of shares of Firm Securities
(subject to adjustment by CSFBC to eliminate fractions) and may be purchased by
the Underwriters only for the purpose of covering over-allotments made in
connection with the sale of the Firm Securities. No Optional Securities shall
be sold or delivered unless the Firm Securities previously have been, or
simultaneously are, sold and delivered. The right to purchase the Optional
Securities or any portion thereof may be exercised from time to time and to the
extent not previously exercised may be surrendered and terminated at any time
upon notice by CSFBC to the Company.
Each time for the delivery of and payment for the Optional Securities,
being herein referred to as an "Optional Closing Date", which may be the First
Closing Date (the First Closing Date and each Optional Closing Date, if any,
being sometimes referred to as a "Closing Date"), shall be determined by CSFBC
but shall be not later than five full business days after written notice of
election to purchase Optional Securities is given. The Company will deliver the
Optional Securities being purchased on each Optional Closing Date to the
Representatives for the accounts of the several Underwriters, against payment
of the purchase price therefor in Federal (same day) funds by official bank
check or checks or wire transfer to an account at a bank acceptable to CSFBC
drawn to the order of , at the office of .
The certificates for the Optional Securities being purchased on each
Optional Closing Date will be in definitive form, in such denominations and
registered in such names as CSFBC requests upon reasonable notice prior to such
Optional Closing Date and will be made available for checking and packaging at
the office of at a reasonable time in advance of
such Optional Closing Date.
4. Offering by Underwriters. It is understood that the several
Underwriters propose to offer the Offered Securities for sale to the public as
set forth in the Prospectus.
5. Certain Agreements of the Company. The Company agrees with the
several Underwriters that:
(a) If the Effective Time of the Initial Registration
Statement is prior to the execution and delivery of this Agreement,
the Company will file the Prospectus with the Commission pursuant to
and in accordance with subparagraph (1) (or, if applicable and if
consented to by CSFBC, subparagraph (4)) of Rule 424(b) not later than
the earlier of (A) the second business day following the execution and
delivery
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of this Agreement or (B) the fifteenth business day after the
Effective Date of the Initial Registration Statement.
The Company will advise CSFBC promptly of any such filing pursuant to
Rule 424(b). If the Effective Time of the Initial Registration
Statement is prior to the execution and delivery of this Agreement and
an additional registration statement is necessary to register a
portion of the Offered Securities under the Act but the Effective Time
thereof has not occurred as of such execution and delivery, the
Company will file the additional registration statement or, if filed,
will file a post-effective amendment thereto with the Commission
pursuant to and in accordance with Rule 462(b) on or prior to 10:00
P.M., New York time, on the date of this Agreement or, if earlier, on
or prior to the time the Prospectus is printed and distributed to any
Underwriter, or will make such filing at such later date as shall have
been consented to by CSFBC.
(b) The Company will advise CSFBC promptly of any
proposal to amend or supplement the initial or any additional
registration statement as filed or the related prospectus or the
Initial Registration Statement, the Additional Registration Statement
(if any) or the Prospectus and will not effect such amendment or
supplementation without CSFBC's consent; and the Company will also
advise CSFBC promptly of the effectiveness of each Registration
Statement (if its Effective Time is subsequent to the execution and
delivery of this Agreement) and of any amendment or supplementation of
a Registration Statement or the Prospectus and of the institution by
the Commission of any stop order proceedings in respect of a
Registration Statement and will use its best efforts to prevent the
issuance of any such stop order and to obtain as soon as possible its
lifting, if issued.
(c) If, at any time when a prospectus relating to the
Offered Securities is required to be delivered under the Act in
connection with sales by any Underwriter or dealer, any event occurs
as a result of which the Prospectus as then amended or supplemented
would include an untrue statement of a material fact or omit to state
any material fact necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading,
or if it is necessary at any time to amend the Prospectus to comply
with the Act, the Company will promptly notify CSFBC of such event and
will promptly prepare and file with the Commission, at its own
expense, an amendment or supplement which will correct such statement
or omission or an amendment which will effect such compliance.
Neither CSFBC's consent to, nor the Underwriters' delivery of, any
such amendment or supplement shall constitute a waiver of any of the
conditions set forth in Section 6.
(d) As soon as practicable, but not later than the
Availability Date (as defined below), the Company will make generally
available to its securityholders an earnings statement covering a
period of at least 12 months beginning after the Effective Date of the
Initial Registration Statement (or, if later, the Effective Date of
the Additional Registration Statement) which will satisfy the
provisions of Section 11(a) of the Act. For the purpose of the
preceding sentence, "Availability Date" means the 45th day after the
end of the fourth fiscal quarter following the fiscal quarter that
includes such Effective Date, except that, if such fourth fiscal
quarter is the last quarter of the Company's fiscal year,
"Availability Date" means the 90th day after the end of such fourth
fiscal quarter.
(e) The Company will furnish to the Representatives
copies of each Registration Statement (four of which will be signed
and will include all exhibits), each related preliminary prospectus,
and, so long as a prospectus relating to the Offered Securities is
required to be delivered under the Act in connection with sales by any
Underwriter or dealer, the Prospectus and all amendments and
supplements to such documents, in each case in such quantities as
CSFBC requests. The Prospectus shall be so furnished on or prior to
3:00 P.M., New York time, on the business day following the later of
the execution and delivery of this Agreement or the Effective Time of
the Initial Registration Statement. All other documents shall be so
furnished as soon as available. The Company will pay the expenses of
printing and distributing to the Underwriters all such documents.
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(f) The Company will arrange for the qualification of the
Offered Securities for sale under the laws of such jurisdictions as
CSFBC designates and will continue such qualifications in effect so
long as required for the distribution.
(g) During the period of five years hereafter, the
Company will furnish to the Representatives and, upon request, to each
of the other Underwriters, as soon as practicable after the end of
each fiscal year, a copy of its annual report to stockholders for such
year; and the Company will furnish to the Representatives (i) as soon
as available, a copy of each report and any definitive proxy statement
of the Company filed with the Commission under the Securities Exchange
Act of 1934 or mailed to stockholders, and (ii) from time to time,
such other information concerning the Company as CSFBC may reasonably
request.
(h) The Company will pay all expenses incident to the
performance of its obligations under this Agreement, for any filing
fees and other expenses (including fees and disbursements of counsel)
incurred in connection with qualification of the Offered Securities
for sale under the laws of such jurisdictions as CSFBC designates and
the printing of memoranda relating thereto, for the filing fee
incident to, and the reasonable fees and disbursements of counsel to
the Underwriters in connection with, the review by the National
Association of Securities Dealers, Inc. of the Offered Securities, for
any travel expenses of the Company's officers and employees and any
other expenses of the Company in connection with attending or hosting
meetings with prospective purchasers of the Offered Securities and for
expenses incurred in distributing preliminary prospectuses and the
Prospectus (including any amendments and supplements thereto) to the
Underwriters.
(i) For a period of 180 days after the date of the
initial public offering of the Offered Securities, the Company will
not offer, sell, contract to sell, pledge or otherwise dispose of,
directly or indirectly, or file with the Commission a registration
statement under the Act relating to, any additional shares of its
Securities or securities convertible into or exchangeable or
exercisable for any shares of its Securities, or publicly disclose the
intention to make any such offer, sale, pledge, disposition or filing,
without the prior written consent of CSFBC except grants of employee
stock options pursuant to the terms of a plan in effect on the date
hereof, issuances of Securities pursuant to the exercise of such
options or the exercise of any other employee stock options
outstanding on the date hereof or issuances of Securities pursuant to
the Company's dividend reinvestment plan.
6. Conditions of the Obligations of the Underwriters. The
obligations of the several Underwriters to purchase and pay for the Firm
Securities on the First Closing Date and the Optional Securities to be
purchased on each Optional Closing Date will be subject to the accuracy of the
representations and warranties on the part of the Company herein, to the
accuracy of the statements of Company officers made pursuant to the provisions
hereof, to the performance by the Company of its obligations hereunder and to
the following additional conditions precedent:
(a) The Representatives shall have received a letter,
dated the date of delivery thereof (which, if the Effective Time of
the Initial Registration Statement is prior to the execution and
delivery of this Agreement, shall be on or prior to the date of this
Agreement or, if the Effective Time of the Initial Registration
Statement is subsequent to the execution and delivery of this
Agreement, shall be prior to the filing of the amendment or
post-effective amendment to the registration statement to be filed
shortly prior to such Effective Time), of each of Deloitte & Touche
LLP and Xxxxx X. Xxxxx & Company confirming that they are independent
public accountants within the meaning of the Act and the applicable
published Rules and Regulations thereunder and stating to the effect
that:
(i) in their opinion the financial statements and
schedules examined by them and included or incorporated by
reference in the Registration Statements comply as to form in
all material respects with the applicable accounting
requirements of the Act and the related published Rules and
Regulations;
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(ii) they have performed the procedures specified by
the American Institute of Certified Public Accountants for a
review of interim financial information as described in
Statement of Auditing Standards No. 71, Interim Financial
Information, on the unaudited financial statements included in
the Registration Statements;
(iii) on the basis of the review referred to in
clause (ii) above, a reading of the latest available interim
financial statements of the Company, inquiries of officials of
the Company who have responsibility for financial and
accounting matters and other specified procedures, nothing
came to their attention that caused them to believe that:
(A) the unaudited financial data included in
the Registration Statements do not comply as to form
in all material respects with the applicable
accounting requirements of the Act and the related
published Rules and Regulations or any material
modifications should be made to such unaudited
financial statements for them to be in conformity
with generally accepted accounting principles;
(B) the unaudited consolidated net sales, net
operating income, net income and net income per share
amounts for the three-month periods ended March 31,
1996 and March 31, 1997 included in the Prospectus do
not agree with the amounts set forth in the unaudited
consolidated financial statements for those same
periods or were not determined on a basis
substantially consistent with that of the
corresponding amounts in the audited statements of
income;
(C) at the date of the latest available
balance sheet read by such accountants, or at a
subsequent specified date not more than three
business days prior to the date of this Agreement,
there was any change in the capital stock or any
increase in short-term indebtedness or long-term debt
of the Company and its consolidated subsidiaries or,
at the date of the latest available balance sheet
read by such accountants, there was any decrease in
consolidated net current assets or net assets, as
compared with amounts shown on the latest balance
sheet included in the Prospectus; or
(D) for the period from the closing date of
the latest income statement included in the
Prospectus to the closing date of the latest
available income statement read by such accountants
there were any decreases, as compared with the
corresponding period of the previous year and with
the period of corresponding length ended the date of
the latest income statement included in the
Prospectus, in consolidated net sales, net operating
income, or in the total or per share amounts of
consolidated net income,
except in all cases set forth in clauses (C) and (D) above for
changes, increases or decreases which the Prospectus discloses
have occurred or may occur or which are described in such
letter; and
(iv) they have compared specified dollar amounts (or
percentages derived from such dollar amounts) and other
financial information contained in the Registration Statements
(in each case to the extent that such dollar amounts,
percentages and other financial information are derived from
the general accounting records of the Company and its
subsidiaries subject to the internal controls of the Company's
accounting system or are derived directly from such records by
analysis or computation) with the results obtained from
inquiries, a reading of such general accounting records and
other procedures specified in such letter and have found such
dollar amounts, percentages and other financial information to
be in agreement with such results, except as otherwise
specified in such letter.
For purposes of this subsection, (i) if the Effective Time of the
Initial Registration Statement is subsequent to the execution and
delivery of this Agreement, "Registration Statements" shall mean the
initial
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registration statement as proposed to be amended by the amendment or
post-effective amendment to be filed shortly prior to its Effective
Time, (ii) if the Effective Time of the Initial Registration Statement
is prior to the execution and delivery of this Agreement but the
Effective Time of the Additional Registration is subsequent to such
execution and delivery, "Registration Statements" shall mean the
Initial Registration Statement and the additional registration
statement as proposed to be filed or as proposed to be amended by the
post-effective amendment to be filed shortly prior to its Effective
Time, and (iii) "Prospectus" shall mean the prospectus included in the
Registration Statements.
(b) If the Effective Time of the Initial Registration
Statement is not prior to the execution and delivery of this
Agreement, such Effective Time shall have occurred not later than
10:00 P.M., New York time, on the date of this Agreement or such later
date as shall have been consented to by CSFBC. If the Effective Time
of the Additional Registration Statement (if any) is not prior to the
execution and delivery of this Agreement, such Effective Time shall
have occurred not later than 10:00 P.M., New York time, on the date of
this Agreement or, if earlier, the time the Prospectus is printed and
distributed to any Underwriter, or shall have occurred at such later
date as shall have been consented to by CSFBC. If the Effective Time
of the Initial Registration Statement is prior to the execution and
delivery of this Agreement, the Prospectus shall have been filed with
the Commission in accordance with the Rules and Regulations and
Section 5(a) of this Agreement. Prior to such Closing Date, no stop
order suspending the effectiveness of a Registration Statement shall
have been issued and no proceedings for that purpose shall have been
instituted or, to the knowledge of the Company or the Representatives,
shall be contemplated by the Commission.
(c) Subsequent to the execution and delivery of this
Agreement, there shall not have occurred (i) any change, or any
development or event involving a prospective change, in the condition
(financial or other), business, properties or results of operations of
the Company or its subsidiaries which, in the judgment of a majority
in interest of the Underwriters including the Representatives, is
material and adverse and makes it impractical or inadvisable to
proceed with completion of the public offering or the sale of and
payment for the Offered Securities; (ii) any downgrading in the rating
of any debt securities of the Company by any "nationally recognized
statistical rating organization" (as defined for purposes of Rule
436(g) under the Act), or any public announcement that any such
organization has under surveillance or review its rating of any debt
securities of the Company (other than an announcement with positive
implications of a possible upgrading, and no implication of a possible
downgrading, of such rating); (iii) any suspension or limitation of
trading in securities generally on the New York Stock Exchange or the
Nasdaq Stock Market's National Market, or any setting of minimum
prices for trading on such exchange, or any suspension of trading of
any securities of the Company on any exchange or in the
over-the-counter market; (iv) any banking moratorium declared by U.S.
Federal, New York or Texas authorities; or (v) any outbreak or
escalation of major hostilities in which the United States is
involved, any declaration of war by Congress or any other substantial
national or international calamity or emergency if, in the judgment of
a majority in interest of the Underwriters including the
Representatives, the effect of any such outbreak, escalation,
declaration, calamity or emergency makes it impractical or inadvisable
to proceed with completion of the public offering or the sale of and
payment for the Offered Securities.
(d) The Representatives shall have received an opinion,
dated as of such Closing Date, of Meadows, Owens, Collier, Reed,
Cousins & Blau, L.L.P., counsel for the Company, to the effect that:
(i) The Company has been duly incorporated and is
an existing corporation in good standing under the laws of the
State of Texas, with corporate power and authority to own its
properties and conduct its business as described in the
Prospectus; and the Company is duly qualified to do business
as a foreign corporation in good standing in all other
jurisdictions in which its ownership or lease of property or
the conduct of its business requires such qualification;
(ii) The Offered Securities delivered on such
Closing Date and all other outstanding shares of the Common
Stock of the Company have been duly authorized and validly
issued, are
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fully paid and nonassessable and conform to the description
thereof contained in the Prospectus; and the stockholders of
the Company have no preemptive rights with respect to the
Securities;
(iii) Except as disclosed in the Prospectus, there
are no contracts, agreements or understandings known to such
counsel between the Company and any person granting such
person the right to require the Company to file a registration
statement under the Act with respect to any securities of the
Company owned or to be owned by such person or to require the
Company to include such securities in the securities
registered pursuant to the Registration Statement or in any
securities being registered pursuant to any other registration
statement filed by the Company under the Act;
(iv) The Company is not and, after giving effect
to the offering and sale of the Offered Securities and the
application of the proceeds thereof as described in the
Prospectus, will not be an "investment company" as defined in
the Investment Company Act of 1940;
(v) No consent, approval, authorization or order
of, or filing with, any governmental agency or body or any
court is required for the consummation of the transactions
contemplated by this Agreement in connection with the issuance
or sale of the Offered Securities by the Company, except such
as have been obtained and made under the Act and such as may
be required under state securities laws;
(vi) The execution, delivery and performance of
this Agreement and the issuance and sale of the Offered
Securities will not result in a breach or violation of any of
the terms and provisions of, or constitute a default under,
any statute, any rule, regulation or order of any governmental
agency or body or any court having jurisdiction over the
Company or any subsidiary of the Company or any of their
properties, or any agreement or instrument to which the
Company or any such subsidiary is a party or by which the
Company or any such subsidiary is bound or to which any of the
properties of the Company or any such subsidiary is subject,
or the charter or by-laws of the Company or any such
subsidiary, and the Company has full power and authority to
authorize, issue and sell the Offered Securities as
contemplated by this Agreement;
(vii) The Initial Registration Statement was
declared effective under the Act as of the date and time
specified in such opinion, the Additional Registration
Statement (if any) was filed and became effective under the
Act as of the date and time (if determinable) specified in
such opinion, the Prospectus either was filed with the
Commission pursuant to the subparagraph of Rule 424(b)
specified in such opinion on the date specified therein or was
included in the Initial Registration Statement or the
Additional Registration Statement (as the case may be), and,
to the best of the knowledge of such counsel, no stop order
suspending the effectiveness of a Registration Statement or
any part thereof has been issued and no proceedings for that
purpose have been instituted or are pending or contemplated
under the Act, and each Registration Statement and the
Prospectus, and each amendment or supplement thereto, as of
their respective effective or issue dates, complied as to form
in all material respects with the requirements of the Act and
the Rules and Regulations; such counsel have no reason to
believe that any part of a Registration Statement or any
amendment thereto, as of its effective date or as of such
Closing Date, contained any untrue statement of a material
fact or omitted to state any material fact required to be
stated therein or necessary to make the statements therein not
misleading or that the Prospectus or any amendment or
supplement thereto, as of its issue date or as of such Closing
Date, contained any untrue statement of a material fact or
omitted to state any material fact necessary in order to make
the statements therein, in the light of the circumstances
under which they were made, not misleading; the descriptions
in the Registration Statements and Prospectus of statutes,
rules, regulations, orders, injunctions, decrees, judgments,
legal and governmental proceedings and contracts and other
documents are accurate and complete and fairly present the
information required to be shown; and such counsel do not know
of any legal or governmental proceedings required to be
described in a Registration Statement or the Prospectus which
are not described as
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required or of any contracts or documents of a character
required to be described in a Registration Statement or the
Prospectus or to be filed as exhibits to a Registration
Statement which are not described and filed as required; it
being understood that such counsel need express no opinion as
to the financial statements or other financial data contained
in the Registration Statements or the Prospectus;
(viii) This Agreement has been duly authorized,
executed and delivered by the Company;
(ix) The Company, its subsidiaries and the Clubs
have obtained the material approvals and permits from all
federal, state and local regulators necessary to offer for
sale and sell timeshare interests and offer purchase money
financing in connection with such sales in accordance with the
applicable laws and regulations governing the marketing and
sale of timeshare interests in real property;
(x) All of the permits and/or approvals issued by
regulators of states other than the state where each
applicable Resort is located ("Foreign State") for the
offering for sale and sale of timeshare interests in such
Resort constitute the material approvals and permits necessary
to be issued by such Foreign State to permit the offering for
sale and sale of timeshare interests in such Resort in
accordance with the laws and regulations of the Foreign State
specifically governing the offering for sale and sale of
timeshare interests in real property located outside of the
Foreign State;
(xi) Except as disclosed in the Prospectus, to
such counsel's knowledge and based upon its review of
certificates and letters from federal, state and local
regulators, the Company and other pertinent parties
(collectively, "Reliance Certificates and Letters"), except as
disclosed in the Prospectus, the Company has not received any
notice from any regulatory authority that it is in violation
of any applicable federal or state law or regulation regarding
the offering for sale and sale of timeshare interests in the
Resorts, the violation of which would have a material adverse
effect on the ownership or operation of the Resorts;
(xii) To such counsel's knowledge and based upon
such counsel's review of Reliance Certificates and Letters,
there are no real estate or timeshare related governmental
actions, governmental suits or governmental proceedings
pending or threatened against the Company with respect to the
business and property relating to the Resorts except (a) those
which have been disclosed in the Prospectus, and (b) those
which would not have a material adverse effect on the Company
and its subsidiaries taken as a whole; and
(xiii) The Vacation Intervals do not constitute
"securities" under the Act. Neither the offer, the sale nor
the issuance of Vacation Intervals by the Company or any
subsidiary required registration under the Act or under the
securities laws of the state of Texas or under the state
securities laws of any other state in which the Company is
currently qualified to do business, nor does the fact that
such interests are outstanding require registration under the
Securities Act of 1934. Meadows, Owens, Collier, Reed,
Cousins & Blau, L.L.P. may rely upon the opinion of Armstrong,
Teasdale, Schlafly & Xxxxx for certain matters regarding
Missouri law.
(e) The Representatives shall have received an opinion,
dated such Closing Date, of Armstrong, Teasdale, Schlafly, Xxxxx &
Xxxxx, counsel for the Company, to the effect that:
(i) The execution, delivery and performance of
this Agreement and the issuance and sale of the Offered
Securities will not result in a breach or violation of any of
the terms and provisions of, or constitute a default under,
any Missouri statute, any rule, regulation or order of any
governmental agency or body or any court within the State of
Missouri having jurisdiction over the Company or any
subsidiary of the Company or any of their properties;
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(ii) The Company, its subsidiaries and the Clubs
have obtained the material approvals and permits from all
federal, state and local regulators necessary to offer for
sale and sell in Missouri timeshare interests and offer
purchase money financing in connection with such sales in
accordance with the applicable laws and regulations governing
the marketing and sale of timeshare interests in real
property;
(iii) All of the permits and/or approvals issued by
Missouri regulators for the offering for sale and sale of
timeshare interests in a Resort located outside of Missouri
constitute the material approvals and permits necessary to
permit the offering for sale and sale of timeshare interests
in such Resort in accordance with the laws and regulations of
Missouri specifically governing the offering for sale and sale
of timeshare interests in real property located outside of
Missouri;
(iv) To such counsel's knowledge and based upon
its review of Reliance Certificates and Letters, except as
disclosed in the Prospectus, the Company has not received any
notice from any regulatory authority that it is in violation
of any applicable federal or state law or regulation regarding
the offering for sale and sale of timeshare interests in the
Resorts, the violation of which would have a material adverse
effect on the ownership or operation of the Resorts;
(v) To such counsel's knowledge and based upon
such counsel's review of Reliance Certificates and Letters,
there are no real estate or timeshare related governmental
actions, governmental suits or governmental proceedings
pending or threatened against the Company with respect to the
business and property relating to the Resorts except (a) those
which have been disclosed in the Registration Statement, and
(b) those which would not have a material adverse effect on
the Company and its subsidiaries taken as a whole.
(f) The Representatives shall have received from Xxxxxx &
Xxxxxxx, counsel for the Underwriters, such opinion or opinions, dated
such Closing Date, with respect to the incorporation of the Company,
the validity of the Offered Securities delivered on such Closing Date,
the Registration Statements, the Prospectus and other related matters
as the Representatives may require, and the Company shall have
furnished to such counsel such documents as they request for the
purpose of enabling them to pass upon such matters. In rendering such
opinion, Xxxxxx & Xxxxxxx may rely as to the incorporation of the
Company and all other matters governed by Texas law upon the opinion
of Meadows, Owens, Collier, Reed, Cousins & Blau, L.L.P. referred to
above and upon the opinion of Armstrong, Teasdale, Schlafly & Xxxxx,
for matters of Missouri Law.
(g) The Representatives shall have received a
certificate, dated as of such Closing Date, of the Chief Executive
Officer and a principal financial or accounting officer of the Company
in which such officers, to the best of their knowledge after
reasonable investigation, shall state that: the representations and
warranties of the Company in this Agreement are true and correct; the
Company has complied with all agreements and satisfied all conditions
on its part to be performed or satisfied hereunder at or prior to such
Closing Date; no stop order suspending the effectiveness of any
Registration Statement has been issued and no proceedings for that
purpose have been instituted or are contemplated by the Commission;
the Additional Registration Statement (if any) satisfying the
requirements of subparagraphs (1) and (3) of Rule 462(b) was filed
pursuant to Rule 462(b), including payment of the applicable filing
fee in accordance with Rule 111(a) or (b) under the Act, prior to the
time the Prospectus was printed and distributed to any Underwriter;
and, subsequent to the date of the most recent financial statements in
the Prospectus, there has been no material adverse change, nor any
development or event involving a prospective material adverse change,
in the condition (financial or other), business, properties or results
of operations of the Company and its subsidiaries taken as a whole
except as set forth in or contemplated by the Prospectus or as
described in such certificate.
(h) The Representatives shall have received letters,
dated as of such Closing Date, of Deloitte & Touche LLP and Xxxxx X.
Xxxxx & Company which meet the requirements of subsection (a) of this
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Section, except that the specified date referred to in such subsection
will be a date not more than three days prior to such Closing Date for
the purposes of this subsection.
(i) The Representatives shall have received on or before
the First Closing Date with respect to each Resort:
(i) A standard ALTA Owner's Title Insurance
Policy naming the Company or its predecessor- in-interest as
named insured and insuring such party that it owns fee title
to the real property described therein in an amount of the
original purchase price thereof, subject only to any material
exceptions to title as are described in the Prospectus, and
such exceptions which do not adversely affect the current or
potential use to be made of the Resort (the "Permitted
Exceptions");
(ii) An updated (i.e., within 90 days of the date
of this Agreement) Title Commitment for a standard ALTA
Owner's Title Insurance Policy issued by a reputable title
insurance company reasonably acceptable to the Representatives
(the "Title Company") and showing fee title to the property
described therein vested in the Company, subject only to the
Permitted Exceptions. Such Title Commitment(s) for each of
the Resorts shall cover at least the following portions of
each of the Resorts: amenity areas, current areas under
development and those areas with each of the Resorts which the
Company intends to develop and which are necessary to
construct the projected units described in the Prospects;
(iii) Policies or certificates of insurance
relating to the Resort evidencing coverages and in amounts
customarily obtained by owners of similar Resorts, together
with a letter of opinion from a nationally or regionally
recognized insurance broker approved by the Representatives
stating, in substance, that the coverage limits and companies
underwriting such insurance for the Company are within the
realm of reasonableness given the Company's business,
operations and claims history;
(iv) UCC, judgment and tax lien searches
confirming that the personal property comprising a part of the
Resort is subject to no liens other than Permitted Exceptions;
(v) Such affidavits, certificates and instruments
of indemnification as shall reasonably be required to induce
the Title Company to issue the policy contemplated in item (i)
above;
(vi) A check or wire transfer for the Title
Company in payment of the Title Company's premium, search and
examination charges, survey costs and any other amounts due in
connection with the issuance of its policy;
(vii) An opinion letter from an architectural firm
reasonably acceptable to the Representatives stating in
substance that (1) such firm designed and has overseen the
construction of all improvements at the Resorts, (2) such firm
is generally aware of the condition of such improvements, (3)
except for ordinary wear and tear there are no existing
material structural defects to any of the improvements
(including foundation or roof) at the Resorts and (4) the
Company and the Improvements at the Resorts are in material
compliance with federal and state regulations relating to
access by the disabled, including the Americans with
Disabilities Act;
(viii) If such Resort is subject to a mortgage, deed
of trust or similar financing (an "Existing Mortgage") which,
as described in the Prospectus, is to remain of record and not
be repaid with the proceeds of the offering, a letter dated
not earlier than 10 days prior to the First Closing Date from
the holder of such Existing Mortgage indicating that the
mortgagor or grantor under such Existing Mortgage is not then
in default and indicating the principal amount required to
satisfy all amounts then secured by such Existing Mortgage and
the additional amount required for each day after the date of
such letter necessary to satisfy all obligations secured
thereby,
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together with all documentation and consents necessary to
permit the repayment of all amounts owed and the release of
the Existing Mortgage; and
(ix) A recent Phase I Environmental Report in form
and substance acceptable to the Representatives.
The Company will furnish the Representatives with such conformed copies of such
opinions, certificates, letters and documents as the Representatives reasonably
request. CSFBC may in its sole discretion waive on behalf of the Underwriters
compliance with any conditions to the obligations of the Underwriters
hereunder, whether in respect of an Optional Closing Date or otherwise.
7. Indemnification and Contribution. (a) The Company will
indemnify and hold harmless each Underwriter against any losses, claims,
damages or liabilities, joint or several, to which such Underwriter may become
subject, under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact contained in
any Registration Statement, the Prospectus, or any amendment or supplement
thereto, or any related preliminary prospectus, or arise out of or are based
upon the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not
misleading, and will reimburse each Underwriter for any legal or other expenses
reasonably incurred by such Underwriter in connection with investigating or
defending any such loss, claim, damage, liability or action as such expenses
are incurred; provided, however, that the Company will not be liable in any
such case to the extent that any such loss, claim, damage or liability arises
out of or is based upon an untrue statement or alleged untrue statement in or
omission or alleged omission from any of such documents in reliance upon and in
conformity with written information furnished to the Company by any Underwriter
through the Representatives specifically for use therein, it being understood
and agreed that the only such information furnished by any Underwriter consists
of the information described as such in subsection (b) below.
(b) Each Underwriter will severally and not jointly
indemnify and hold harmless the Company against any losses, claims, damages or
liabilities to which the Company may become subject, under the Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions
in respect thereof) arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact contained in any Registration
Statement, the Prospectus, or any amendment or supplement thereto, or any
related preliminary prospectus, or arise out of or are based upon the omission
or the alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, in each
case to the extent, but only to the extent, that such untrue statement or
alleged untrue statement or omission or alleged omission was made in reliance
upon and in conformity with written information furnished to the Company by
such Underwriter through the Representatives specifically for use therein, and
will reimburse any legal or other expenses reasonably incurred by the Company
in connection with investigating or defending any such loss, claim, damage,
liability or action as such expenses are incurred, it being understood and
agreed that the only such information furnished by any Underwriter consists of
the following information in the Prospectus furnished on behalf of each
Underwriter: the last paragraph at the bottom of the cover page concerning the
terms of the offering by the Underwriters, the legend concerning
over-allotments and stabilizing on the inside front cover page, the concession
and reallowance figures appearing in the fourth paragraph under the caption
"Underwriting" and the information contained in the fifth paragraph under the
caption "Underwriting".
(c) Promptly after receipt by an indemnified party under
this Section of notice of the commencement of any action, such indemnified
party will, if a claim in respect thereof is to be made against the
indemnifying party under subsection (a) or (b) above, notify the indemnifying
party of the commencement thereof; but the omission so to notify the
indemnifying party will not relieve it from any liability which it may have to
any indemnified party otherwise than under subsection (a) or (b) above. In
case any such action is brought against any indemnified party and it notifies
the indemnifying party of the commencement thereof, the indemnifying party will
be entitled to participate therein and, to the extent that it may wish, jointly
with any other indemnifying party similarly notified, to assume the defense
thereof, with counsel satisfactory to such indemnified party (who shall not,
except with the consent of the indemnified party, be counsel to the
indemnifying party), and after notice from the
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indemnifying party to such indemnified party of its election so to assume the
defense thereof, the indemnifying party will not be liable to such indemnified
party under this Section for any legal or other expenses subsequently incurred
by such indemnified party in connection with the defense thereof other than
reasonable costs of investigation. No indemnifying party shall, without the
prior written consent of the indemnified party, effect any settlement of any
pending or threatened action in respect of which any indemnified party is or
could have been a party and indemnity could have been sought hereunder by such
indemnified party unless such settlement includes an unconditional release of
such indemnified party from all liability on any claims that are the subject
matter of such action.
(d) If the indemnification provided for in this Section
is unavailable or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above, then each indemnifying party shall contribute to
the amount paid or payable by such indemnified party as a result of the losses,
claims, damages or liabilities referred to in subsection (a) or (b) above (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 Securities 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 or liabilities 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 proportion
as the total net proceeds from the offering (before deducting expenses)
received by the Company bear to the total underwriting discounts and
commissions received by the Underwriters. The relative fault shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to
state a material fact relates to information supplied by the Company or the
Underwriters and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such untrue statement or omission. The
amount paid by an indemnified party as a result of the losses, claims, damages
or liabilities referred to in the first sentence of this subsection (d) shall
be deemed to include any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any action or
claim which is the subject of this subsection (d). Notwithstanding the
provisions of this subsection (d), no Underwriter shall be required to
contribute any amount in excess of the amount by which the total price at which
the Securities underwritten by it and distributed to the public were offered to
the public exceeds the amount of any damages which such Underwriter has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations in this subsection (d) to
contribute are several in proportion to their respective underwriting
obligations and not joint.
(e) The obligations of the Company under this Section
shall be in addition to any liability which the Company may otherwise have and
shall extend, upon the same terms and conditions, to each person, if any, who
controls any Underwriter within the meaning of the Act; and the obligations of
the Underwriters under this Section shall be in addition to any liability which
the respective Underwriters may otherwise have and shall extend, upon the same
terms and conditions, to each director of the Company, to each officer of the
Company who has signed a Registration Statement and to each person, if any, who
controls the Company within the meaning of the Act.
8. Default of Underwriters. If any Underwriter or Underwriters
default in their obligations to purchase Offered Securities hereunder on either
the First or any Optional Closing Date and the aggregate number of shares of
Offered Securities that such defaulting Underwriter or Underwriters agreed but
failed to purchase does not exceed 10% of the total number of shares of Offered
Securities that the Underwriters are obligated to purchase on such Closing
Date, CSFBC may make arrangements satisfactory to the Company for the purchase
of such Offered Securities by other persons, including any of the Underwriters,
but if no such arrangements are made by such Closing Date, the non-defaulting
Underwriters shall be obligated severally, in proportion to their respective
commitments hereunder, to purchase the Offered Securities that such defaulting
Underwriters agreed but failed to purchase on such Closing Date. If any
Underwriter or Underwriters so default and the aggregate number of shares of
Offered Securities with respect to which such default or defaults occur exceeds
10% of the total number of shares of Offered Securities that the Underwriters
are obligated to purchase on such Closing Date and arrangements
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satisfactory to CSFBC and the Company for the purchase of such Offered
Securities by other persons are not made within 36 hours after such default,
this Agreement will terminate without liability on the part of any
non-defaulting Underwriter or the Company, except as provided in Section 9
(provided that if such default occurs with respect to Optional Securities after
the First Closing Date, this Agreement will not terminate as to the Firm
Securities or any Optional Securities purchased prior to such termination). As
used in this Agreement, the term "Underwriter" includes any person substituted
for an Underwriter under this Section. Nothing herein will relieve a defaulting
Underwriter from liability for its default.
9. Survival of Certain Representations and Obligations. The
respective indemnities, agreements, representations, warranties and other
statements of the Company or its officers and of the several Underwriters set
forth in or made pursuant to this Agreement will remain in full force and
effect, regardless of any investigation, or statement as to the results thereof,
made by or on behalf of any Underwriter, the Company or any of their respective
representatives, officers or directors or any controlling person, and will
survive delivery of and payment for the Offered Securities. If this Agreement is
terminated pursuant to Section 8 or if for any reason the purchase of the
Offered Securities by the Underwriters is not consummated, the Company shall
remain responsible for the expenses to be paid or reimbursed by it pursuant to
Section 5 and the respective obligations of the Company and the Underwriters
pursuant to Section 7 shall remain in effect, and if any Offered Securities have
been purchased hereunder the representations and warranties in Section 2 and all
obligations under Section 5 shall also remain in effect; provided, however, if
the purchase of the Offered Securities by the Underwriters is not consummated
for any reason, the Company will not be required to reimburse the Underwriters
for their out-of-pocket expenses (including fees and disbursements of counsel)
reasonably incurred by them in connection with the offering of the Offered
Securities in an amount in excess of $100,000 (unless otherwise agreed to by the
Company).
10. Notices. All communications hereunder will be in writing and,
if sent to the Underwriters, will be mailed, delivered or telegraphed and
confirmed to the Representatives, c/o Credit Suisse First Boston Corporation,
Eleven Madison Avenue, New York, N.Y. 10010-3629, Attention: Investment
Banking Department--Transactions Advisory Group, or, if sent to the Company,
will be mailed, delivered or telegraphed and confirmed to it at 0000 Xxxxxxxxx
Xxxxx, Xxxxx 000, Xxxxxx, XX 00000, Attention: Xxxxxx X. Xxxx, with a copy to
Xxxxxx Xxx Xxxxxxx, Esq., Meadows, Owens, Collier, Reed, Cousins & Blau,
L.L.P., 000 Xxxx Xxxxxx, Xxxxx 0000, Xxxxxx, Xxxxx 00000; provided, however,
that any notice to an Underwriter pursuant to Section 7 will be mailed,
delivered or telegraphed and confirmed to such Underwriter.
11. Successors. This Agreement will inure to the benefit of and be
binding upon the parties hereto and their respective successors and the
officers and directors and controlling persons referred to in Section 7, and no
other person will have any right or obligation hereunder.
12. Representation of Underwriters. The Representatives will act
for the several Underwriters in connection with this financing, and any action
under this Agreement taken by the Representatives jointly or by CSFBC will be
binding upon all the Underwriters.
13. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all such
counterparts shall together constitute one and the same Agreement.
14. APPLICABLE LAW. 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 LAWS.
The Company hereby submits to the non-exclusive jurisdiction of the
Federal and state courts in the Borough of Manhattan in The City of New York in
any suit or proceeding arising out of or relating to this Agreement or the
transactions contemplated hereby.
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If the foregoing is in accordance with the Representatives
understanding of our agreement, kindly sign and return to the Company one of
the counterparts hereof, whereupon it will become a binding agreement between
the Company and the several Underwriters in accordance with its terms.
Very truly yours,
SILVERLEAF RESORTS, INC.
By . . . . . . . . . . . . . . . . . . .
Title:
The foregoing Underwriting Agreement is hereby confirmed and accepted as of the
date first above written.
Acting on behalf of itself and as the
Representative of the several
Underwriters.
CREDIT SUISSE FIRST BOSTON CORPORATION
EVEREN SECURITIES
XXXXXXXX & COMPANY SECURITIES, INC.
By CREDIT SUISSE FIRST BOSTON CORPORATION
By........................................
Title:
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SCHEDULE A
Underwriter
Number of
Firm Securities
---------------
Credit Suisse First Boston Corporation . . . . . . . . . . .
Everen Securities . . . . . . . . . . . . . . . . . . . . . .
XxXxxxxx & Company Securities, Inc. . . . . . . . . . . . . .
-----------------
Total . . . . . . . . . . . . . . . . . . .
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20
