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Exhibit 1.1
XXXXXXX AND BROAD HOME CORPORATION
(A DELAWARE CORPORATION)
KBHC FINANCING I
(A DELAWARE BUSINESS TRUST)
16,500,000 FELINE PRIDES*
AND
1,000,000 CAPITAL SECURITIES
UNDERWRITING AGREEMENT
DATED: JUNE 30, 1998
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* Service xxxx of Xxxxxxx Xxxxx & Co., Inc.
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XXXXXXX AND BROAD HOME CORPORATION
(A DELAWARE CORPORATION)
KBHC FINANCING I
(A DELAWARE BUSINESS TRUST)
16,500,000 FELINE PRIDES(SM)
(STATED AMOUNT OF $10 PER FELINE PRIDES)
CONSISTING OF
15,500,000 INCOME PRIDES(SM)
EACH CONSISTING OF
A PURCHASE CONTRACT OF XXXXXXX AND BROAD HOME CORPORATION REQUIRING THE
PURCHASE ON AUGUST 16, 2001 (OR EARLIER) OF CERTAIN SHARES
OF COMMON STOCK OF XXXXXXX AND BROAD HOME CORPORATION
AND
AN 8% CAPITAL SECURITY OF KBHC FINANCING I
AND
1,000,000 GROWTH PRIDES(SM)
EACH CONSISTING OF
A PURCHASE CONTRACT OF XXXXXXX AND BROAD HOME CORPORATION REQUIRING THE
PURCHASE ON AUGUST 16, 2001 (OR EARLIER) OF CERTAIN SHARES
OF COMMON STOCK OF XXXXXXX AND BROAD HOME CORPORATION
AND
A 1/100 UNDIVIDED BENEFICIAL INTEREST IN A ZERO-COUPON U.S.
TREASURY SECURITY HAVING A PRINCIPAL AMOUNT EQUAL
TO $1,000 AND MATURING ON AUGUST 15, 2001;
AND
1,000,000 8% CAPITAL SECURITIES OF
KBHC FINANCING I (LIQUIDATION AMOUNT $10 PER
CAPITAL SECURITY)
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June 30, 1998
XXXXXXX XXXXX & CO.
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX
INCORPORATED
XXXXXXXXX, LUFKIN & XXXXXXXX SECURITIES CORPORATION
As Representatives of the Several Underwriters
x/x Xxxxxxx Xxxxx & Xx.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
Xxxxxxx Xxxxx World Headquarters
World Financial Center
Xxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Ladies and Gentlemen:
Xxxxxxx and Broad Home Corporation, a Delaware corporation (the
"Company"), and KBHC Financing I, a Delaware statutory business trust (the
"Trust" and, together with the Company, the "Offerors"), confirm their agreement
with Xxxxxxx Xxxxx & Co., Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
("Xxxxxxx Xxxxx") and each of the other Underwriters named in Schedule A hereto
(collectively, the "Underwriters", which term shall also include any underwriter
substituted as hereinafter provided in Section 10 hereof), for whom Xxxxxxx
Xxxxx and Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities Corporation are acting as
representatives (in such capacity, the "Representatives"), with respect to the
issue and sale by the Offerors and the purchase by the Underwriters, acting
severally and not jointly, of the respective numbers of the FELINE PRIDES and 8%
Capital Securities of the Trust (the "Capital Securities") set forth in said
Schedule A (collectively, the "Initial Securities"). The FELINE PRIDES will
initially consist of (A) 15,500,000 units (referred to as "Income PRIDES") with
a stated amount, per Income PRIDES, of $10 (the "Stated Amount") and (B)
1,000,000 units (referred to as "Growth PRIDES") with a stated amount, per
Growth PRIDES, equal to the Stated Amount. Each Income PRIDES will initially
consist of a unit comprised of (a) a stock purchase contract (a "Purchase
Contract") under which (i) the holder will purchase from the Company on August
16, 2001 (the "Purchase Contract Settlement Date"), for an amount of cash equal
to the Stated Amount, a number of newly issued shares of common stock, $1.00 par
value per share ("Common Stock"), of the Company equal to the Settlement Rate
(as defined in the Purchase Contract Agreement referred to below), and (ii) the
Company will pay the holder unsecured contract adjustment payments ("Contract
Adjustment Payments") at the rate of 0.25% of the Stated Amount per annum and
(b) beneficial ownership of a Capital Security. Each Growth PRIDES will
initially consist of a unit comprised of (a) a Purchase Contract under which (i)
the holder will purchase from the Company on the Purchase Contract Settlement
Date, for an amount in cash equal to the Stated Amount, the number of shares of
Common Stock of the Company equal to the Settlement Rate, and (ii) the Company
will pay the holder Contract Adjustment Payments, at the rate of 0.75% of the
Stated Amount per annum, and (b) a 1/100 undivided beneficial interest in a
zero-
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coupon U.S. Treasury Security (CUSIP No. 000000XX0) in a principal amount at
maturity equal to $1,000 payable on August 15, 2001 (the "Treasury Securities").
The Company and the Trust also confirm their agreement to grant to the
Underwriters, acting severally and not jointly, of the option described in
Section 2(b) hereof to purchase all or any part of 2,475,000 additional Income
PRIDES (the "Option Securities" and, together with the Initial Securities, the
"Securities") to cover over-allotments, if any. The Capital Securities which
will initially constitute a component of the Income PRIDES are hereinafter
sometimes called the "Underlying Capital Securities," and Capital Securities
which initially are not Underlying Capital Securities are hereinafter sometimes
called the "Separate Capital Securities." In accordance with the terms of the
Purchase Contract Agreement, to be dated as of July 7, 1998 (the "Purchase
Contract Agreement"), between the Company and The First National Bank of
Chicago, as Purchase Contract Agent (the "Purchase Contract Agent"), the Capital
Securities constituting a part of the Income PRIDES and the Treasury Securities
constituting a part of the Growth PRIDES will be pledged by the Purchase
Contract Agent, on behalf of the holders of the Securities that are Income
PRIDES and Growth PRIDES, respectively, to The Bank of New York, as Collateral
Agent (the "Collateral Agent"), pursuant to the Pledge Agreement, to be dated as
of July 7, 1998 (the "Pledge Agreement"), among the Company, the Purchase
Contract Agent and the Collateral Agent, to secure the holders' obligation to
purchase Common Stock under the Purchase Contracts. The shares of Common Stock
issuable pursuant to the Purchase Contracts are hereinafter called the "Shares".
The Capital Securities and Common Securities (as defined below) will
be guaranteed by the Company with respect to distributions and payments upon
liquidation, redemption and otherwise (the "Guarantee") pursuant to the
Guarantee Agreement, to be dated as of July 7, 1998 (the "Guarantee Agreement"),
between the Company and The First National Bank of Chicago, as trustee (the
"Guarantee Trustee"), for the benefit of the holders from time to time of the
Capital Securities and the Common Securities, and certain back-up undertakings
of the Company. All of the net proceeds from the sale of the Capital Securities
will be combined with the entire net proceeds from the sale by the Trust to the
Company of its common securities (the "Common Securities" and, together with the
Capital Securities, the "Trust Securities") and will be used by the Trust to
purchase the 8% Debentures due August 16, 2003 (the "Debentures") of the
Company. The Trust Securities will be issued pursuant to the amended and
restated declaration of trust of the Trust, to be dated as of July 7, 1998 (the
"Declaration"), among the Company, as Sponsor, Xxxxxx X. Xxxxxxx and Xxxxxx
Xxxxxx (the "Regular Trustees"), and The First National Bank of Chicago, as the
institutional trustee (the "Institutional Trustee"), and First Chicago Delaware,
Inc., as the Delaware trustee (the "Delaware Trustee" and, together with the
Institutional Trustee and the Regular Trustees, the "Trustees"), and the holders
from time to time of undivided beneficial interests in the assets of the Trust.
The Debentures will be issued pursuant to the Indenture, to be dated as of July
7, 1998 (the "Base Indenture"), between the Company and The First National Bank
of Chicago, as trustee (the "Debt Trustee"), as amended and supplemented by the
First Supplemental Indenture, to be dated as of July 7, 1998 (the "First
Supplemental Indenture"), between the Company and the Debt Trustee (the Base
Indenture, as supplemented and amended by such First Supplemental Indenture,
being referred to as the "Indenture").
The Company and the Trust have entered into a Common Securities
Purchase Agreement dated as of July 7, 1998 (the "Common Securities Purchase
Agreement") pursuant to which the
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Trust will sell to the Company, and the Company will purchase from the Trust,
the Common Securities, and a Debenture Purchase Agreement dated as of July 7,
1998 (the "Debenture Purchase Agreement") pursuant to which the Trust will
purchase from the Company, and the Company will sell to the Trust, the
Debentures.
Pursuant to a Remarketing Agreement (the "Remarketing Agreement") to
be dated as of July 7, 1998, among the Company, the Trust, the Purchase Contract
Agent and Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated, the Capital
Securities may be remarketed, subject to certain terms and conditions. The
Remarketing Agreement contemplates that, in connection with any such
remarketing, the Company, the Trust, and one or more remarketing agents (the
"Remarketing Agents") will enter into a Supplemental Remarketing Agreement (the
"Supplemental Remarketing Agreement") in substantially the form attached as
Exhibit A to the Remarketing Agreement.
As used in this Agreement, the term "Operative Documents" means this
Agreement, the Purchase Contract Agreement, the Securities, the Pledge
Agreement, the Remarketing Agreement, the Declaration, the Trust Securities, the
Guarantee, the Indenture, the Debentures, the Common Securities Purchase
Agreement and the Debenture Purchase Agreement; and all references to the
Operative Documents to which the Company is a party (and all references of like
import) shall include, without limitation, the Income PRIDES, the Growth PRIDES
and the Debentures, and all references to the Operative Documents to which the
Trust is a party shall include, without limitation, the Trust Securities.
As used herein, the terms "Applicable Ownership Interest",
"Investment Company Event" and "Treasury Portfolio" have the meanings set forth
in the Declaration; the terms "Collateral Account", "Pledged Capital
Securities", "Pledged Treasury Securities" and "Pledge" have the meanings set
forth in the Pledge Agreement; the term "Termination Event" has the meaning set
forth in the Purchase Contract Agreement; the term "Remarketing Closing Date"
means the Remarketing Closing Date specified on Schedule I to the Supplemental
Remarketing Agreement; and the term "Uniform Commercial Code" has the same
meaning as the term "Code" as defined in the Pledge Agreement.
The Company and the Trust have filed with the Securities and
Exchange Commission (the "Commission") a registration statement on Form S-3
(Nos. 333-51825 and 333-51825-01) and pre-effective amendment nos. 1, 2, 3 and 4
thereto covering the registration of the Securities (including the Purchase
Contracts), the Capital Securities, the Guarantee, the Debentures and the Shares
under the Securities Act of 1933, as amended (the "1933 Act"), including the
related preliminary prospectus or prospectuses. Promptly after execution and
delivery of this Agreement, the Company and the Trust will either (i) prepare
and file a prospectus in accordance with the provisions of Rule 430A ("Rule
430A") of the rules and regulations of the Commission under the 1933 Act (the
"1933 Act Regulations") and paragraph (b) of Rule 424 ("Rule 424(b)") of the
1933 Act Regulations or (ii) if the Company and the Trust have elected to rely
upon Rule 434 ("Rule 434") of the 1933 Act Regulations, prepare and file a term
sheet (a "Term Sheet") in accordance with the provisions of Rule 434 and Rule
424(b). The information included in such prospectus or in such Term Sheet, as
the case may be, that was omitted from such registration statement at the time
it became effective but that is deemed to be part of such registration
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statement at the time it became effective (a) pursuant to paragraph (b) of Rule
430A is referred to as "Rule 430A Information" or (b) pursuant to paragraph (d)
of Rule 434 is referred to as "Rule 434 Information". Each prospectus used
before such registration statement became effective, and any prospectus that
omitted, as applicable, the Rule 430A Information or the Rule 434 Information,
that was used after such effectiveness and prior to the execution and delivery
of this Agreement, in each case including the documents incorporated or deemed
to be incorporated by reference therein, is herein called a "preliminary
prospectus". Such registration statement, including the exhibits thereto,
schedules thereto, if any, and the documents incorporated by reference therein
pursuant to Item 12 of Form S-3 under the 1933 Act, at the time it became
effective and including the Rule 430A Information and the Rule 434 Information,
as applicable, is herein called the "Registration Statement." Any registration
statement filed pursuant to Rule 462(b) of the 1933 Act Regulations is herein
referred to as the "Rule 462(b) Registration Statement", and after such filing
the term "Registration Statement" shall include the Rule 462(b) Registration
Statement. The final prospectus, including the documents incorporated by
reference therein pursuant to Item 12 of From S-3 under the 1933 Act, in the
form first furnished to the Underwriters for use in connection with the offering
of the Securities is herein called the "Prospectus". If Rule 434 is relied on,
the term "Prospectus" shall refer to the preliminary prospectus dated June 12,
1998 together with the Term Sheet, and all references in this Agreement to the
date of the Prospectus shall mean the date of the Term Sheet. For purposes of
this Agreement, all references to the Registration Statement, any preliminary
prospectus, the Prospectus or any Term Sheet or any amendment or supplement to
any of the foregoing shall be deemed to include the copy filed with the
Commission pursuant to its Electronic Data Gathering, Analysis and Retrieval
system ("XXXXX").
All references in this Agreement to financial statements and
schedules and other information which is "contained," "included" or "stated" in
the Registration Statement, any preliminary prospectus or the Prospectus (or
other references of like import) shall be deemed to mean and include all such
financial statements and schedules and other information which is incorporated
or deemed to be incorporated by reference in the Registration Statement, any
preliminary prospectus or the Prospectus, as the case may be; and all references
in this Agreement to amendments or supplements to the Registration Statement,
any preliminary prospectus or the Prospectus shall be deemed to mean and include
the filing of any document under the Securities Exchange Act of 1934, as amended
(the "1934 Act"), which is incorporated or deemed to be incorporated by
reference in the Registration Statement, such preliminary prospectus or the
Prospectus, as the case may be.
The Offerors understand that the Underwriters propose to make a
public offering of the Securities as soon as the Underwriters deem advisable
after this Agreement has been executed and delivered and the Declaration, the
Indenture and the Guarantee Agreement have been qualified under the Trust
Indenture Act of 1939, as amended (the "1939 Act").
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SECTION 1. Representations and Warranties.
(a) The Offerors jointly and severally represent and warrant to each
Underwriter as of the date hereof, as of the Closing Time referred to in Section
2(d) hereof and as of each Date of Delivery (if any) referred to in Section 2(b)
hereof (the Closing Time and each Date of Delivery (if any) are hereinafter
called, individually, a "Representation Date"), and jointly and severally agree
with each Underwriter, as follows:
(i) The Company and the Trust meet the requirements for the
use of Form S-3 under the 1933 Act. Each of the Registration Statement and any
Rule 462(b) Registration Statement has become effective under the 1933 Act. At
the respective times the Registration Statement, any Rule 462(b) Registration
Statement and any post-effective amendments thereto became or become effective,
at the date of this Agreement, and at each Representation Date, the Registration
Statement, any Rule 462(b) Registration Statement and any amendments or
supplements thereto complied and will comply in all material respects with the
requirements of the 1933 Act and the 1933 Act Regulations and the 1939 Act and
the rules and regulations of the Commission under the 1939 Act (the "1939 Act
Regulations") and did not and will not contain an untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
to make the statements therein not misleading. At the date of the Prospectus and
at each Representation Date, the Prospectus and any amendments and supplements
thereto did not and will not include an untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not misleading. If
the Offerors elect to rely upon Rule 434 of the 1933 Act Regulations, the
Offerors will comply with the requirements of Rule 434. Notwithstanding the
foregoing, the representations and warranties in this subsection (i) shall not
apply to (A) statements in or omissions from the Registration Statement or the
Prospectus made in reliance upon and in conformity with information furnished to
the Offerors in writing by any Underwriter through Xxxxxxx Xxxxx expressly for
use in the Registration Statement or the Prospectus or (B) the part of the
Registration Statement which shall constitute a Statement of Eligibility (Form
T-1) under the 1939 Act of any trustee (each, a "Form T-1").
Each preliminary prospectus and prospectus filed as part of the
Registration Statement as originally filed or as part of any amendment thereto,
or filed pursuant to Rule 424 under the 1933 Act, complied when filed in all
material respects with the 1933 Act and the 1933 Act Regulations and each
preliminary prospectus delivered to the Underwriters for use in connection with
the offering of the Securities was and will be identical to the electronically
transmitted copies thereof filed with the Commission pursuant to XXXXX, except
to the extent permitted by Regulation S-T.
(ii) Ernst & Young LLP, whose reports are incorporated by
reference into the Registration Statement, are independent public accountants
with respect to the Company and its subsidiaries as required by the 1933 Act and
the 1933 Act Regulations.
(iii) The financial statements included or incorporated by
reference in the Registration Statement and the Prospectus present fairly the
financial position of the Company
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and its consolidated subsidiaries as at the dates indicated and the results of
operations of the Company and its consolidated subsidiaries for the periods
specified; except as otherwise stated in the Registration Statement, said
financial statements have been prepared in conformity with generally accepted
accounting principles in the United States applied on a consistent basis; the
supporting schedules included or incorporated by reference in the Registration
Statement present fairly the information required to be stated therein; the
Company's ratios of earnings to fixed charges and of earnings to combined fixed
charges and preferred stock dividends (including the amounts the ratios would
have been were interest on the outstanding collateralized mortgage obligations
of the Company's wholly owned limited purpose financing subsidiaries included in
such ratios' calculation) included in the Prospectus under the caption
"Consolidated Ratios of Earnings to Fixed Charges and of Earnings to Combined
Fixed Charges and Preferred Stock Dividends" and in Exhibit 12 to the
Registration Statement have been calculated in compliance with Item 503(d) of
Regulation S-K of the Commission; and the pro forma financial statements, if
any, and related notes thereto included in the Registration Statement and the
Prospectus present fairly the information shown therein, have been prepared in
accordance with the Commission's rules and guidelines with respect to pro forma
financial statements and have been properly compiled on the bases described
therein, and the assumptions used in the preparation thereof are reasonable and
the adjustments used therein are appropriate to give effect to the transactions
and circumstances referred to therein.
(iv) Since the respective dates as of which information is given
in the Registration Statement and the Prospectus, except as otherwise stated
therein, (A) there has been no material adverse change in the condition,
financial or otherwise, or in the earnings, business affairs or business
prospects of (1) the Company and its subsidiaries (which term, as used in this
Agreement, includes without limitation consolidated joint ventures in which the
Company or any of its other subsidiaries is a participant and limited and
general partnerships in which the Company or any of its other subsidiaries owns
partnership interests (such joint ventures and limited and general partnerships
being hereinafter called, collectively, the "Partnerships")) considered as one
enterprise, whether or not arising in the ordinary course of business, or (2)
the Trust, (B) there have been no transactions entered into by the Company or
any of its subsidiaries, other than those in the ordinary course of business,
which are material with respect to the Company and its subsidiaries considered
as one enterprise, and (C) except for regular quarterly dividends in customary
amounts per share on the Common Stock, there has been no dividend or
distribution of any kind declared, paid or made by the Company on any class of
its capital stock.
(v) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State of
Delaware and has corporate power and authority to own, lease and operate its
properties and to conduct its business as described in the Prospectus and to
enter into and perform its obligations under, and as contemplated under, the
Operative Documents to which it is a party; and the Company is duly qualified as
a foreign corporation to transact business and is in good standing in each
jurisdiction in which such qualification is required, whether by reason of the
ownership or leasing of property or the conduct of business, except where the
failure to so qualify would not have a material adverse effect on the condition,
financial or otherwise, or the earnings, business affairs or business prospects
of the Company and its subsidiaries considered as one enterprise.
(vi) Each Significant Subsidiary (as defined below) is either a
corporation or a
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limited partnership. Each Significant Subsidiary has been duly organized and is
validly existing as a corporation or limited partnership, as the case may be, in
good standing under the laws of the jurisdiction of its organization, has power
and authority to own, lease and operate its properties and to conduct its
business as described in the Prospectus and is duly qualified to transact
business and is in good standing in each jurisdiction in which such
qualification is required, whether by reason of the ownership or leasing of
property or the conduct of business, except where the failure to so qualify
would not have a material adverse effect on the condition, financial or
otherwise, or the earnings, business affairs or business prospects of the
Company and its subsidiaries considered as one enterprise; all of the issued and
outstanding capital stock of each Significant Subsidiary which is a corporation
has been duly authorized and validly issued, is fully paid and non-assessable
and is owned (except for directors qualifying shares and a nominal number of
shares held by affiliated parties) by the Company, directly or through
subsidiaries, free and clear of any security interest, mortgage, pledge, lien,
encumbrance, claim or equity; and all of the outstanding equity interests in
each Significant Subsidiary which is a Partnership have been duly authorized (if
applicable) and validly issued, are fully paid and non-assessable and are owned
by the Company (except to the extent that a minority interest in the Partnership
is reflected in the Company's consolidated financial statements included or
incorporated by reference in the Prospectus), directly or through subsidiaries,
free and clear of any security interest, mortgage, pledge, lien, encumbrance,
claim or equity. For purposes of this Agreement, "Significant Subsidiary" means
any subsidiary of the Company (including, without limitation, any Partnership
but excluding the Trust) that is a "significant subsidiary" as defined in Rule
1-02 of Regulation S-X (as in effect on January 1, 1996), but substituting "5%"
for "10%" wherever "10%" appears in such definition.
(vii) The Trust has been duly created and is validly existing
in good standing as a business trust under the Delaware Business Trust Act (the
"Delaware Act") with the power and authority to own its property and to conduct
its business as described in the Registration Statement and Prospectus and to
enter into and perform its obligations under the Operative Documents to which it
is a party and the Declaration; the Trust is qualified to transact business as a
foreign trust and is in good standing in each jurisdiction in which such
qualification is necessary, except where the failure to so qualify or be in good
standing would not have a material adverse effect on the condition, financial or
otherwise, or the earnings, business affairs or business prospects of the Trust;
the Trust is not a party to or otherwise bound by any agreement other than the
Operative Documents to which it is a party and the Declaration; and the Trust is
and will, under current law, be classified for United States federal income tax
purposes as a grantor trust and not as an association taxable as a corpo-
ration.
(viii) The authorized, issued and outstanding capital stock of
the Company is as set forth in the Prospectus under "Capitalization" (except for
subsequent issuances, if any, pursuant to reservations, agreements or employee
benefit plans referred to or incorporated by reference in the Prospectus); and
the shares of issued and outstanding Common Stock have been duly authorized and
validly issued and are fully paid and non-assessable; the Common Stock, the
Company's authorized but unissued special common stock, par value $1.00 per
share (the "Special Common Stock"), and the Company's authorized and unissued
preferred stock, par value $1.00 per share (the "Preferred Stock"), conform to
the respective statements relating thereto included in the Prospectus.
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(ix) Neither the Company nor any of its Significant Subsidiaries
is in violation of its charter or by-laws, limited partnership agreement or
other organizational documents (collectively, "Organizational Documents"); the
Trust is not in violation of the Declaration or its certificate of trust filed
with the State of Delaware (the "Certificate of Trust"); neither the Company nor
any of its Significant Subsidiaries nor the Trust is in default in the
performance or observance of (A) any obligation, agreement, covenant or
condition contained in the Company's 1997 Revolving Loan Agreement dated as of
April 21, 1997 with Bank of America National Trust and Savings Association, as
administrative agent, and the other parties thereto, as the same may have
heretofore been or may hereafter be amended or supplemented from time to time
(the "Loan Agreement"), the Company's 7-3/4% Senior Notes due October 15, 2004
(the "7-3/4% Senior Notes") or the Indenture dated as of October 14, 1997
between the Company and Suntrust Bank, Atlanta pursuant to which the 7- 3/4%
Senior Notes were issued, including the officers certificate establishing the
form and terms of the 7-3/4% Senior Notes (the "7-3/4% Senior Indenture"), the
Company's 9-3/8% Senior Subordinated Notes due 2003 (the "9-3/8% Senior
Subordinated Notes") or the Indenture dated as of May 1, 1993 between the
Company and The First National Bank of Boston pursuant to which the 9-3/8%
Senior Subordinated Notes were issued, including the officers certificate
establishing the form and terms of the 9-3/8% Senior Notes (the "9-3/8% Senior
Subordinated Indenture"), or the Company's 9-5/8% Senior Subordinated Notes due
2007 (the "9-5/8% Senior Subordinated Notes") or the Indenture dated as of
November 19, 1996 between the Company and Suntrust Bank, Atlanta pursuant to
which the 9-5/8% Senior Subordinated Notes were issued, including the officers
certificate establishing the form and terms of the 9-5/8% Senior Subordinated
Notes (the "9-5/8% Senior Subordinated Indenture") (the Loan Agreement, the
7-3/4% Senior Notes, the 7-3/4% Senior Indenture, the 9-3/8% Senior Subordinated
Notes, the 9-3/8% Senior Subordinated Indenture, the 9-5/8% Senior Subordinated
Notes and the 9-5/8% Senior Subordinated Indenture are hereinafter called,
collectively, the "Subject Instruments" and, individually, a "Subject
Instrument") or (B) any obligation, agreement, covenant or condition contained
in any other contract, indenture, mortgage, loan agreement, note, lease or other
instrument to which the Company or any of the Significant Subsidiaries or the
Trust is a party or by which it or any of them may be bound, or to which any of
the property or assets of the Company or any of the Significant Subsidiaries or
the Trust is subject, which default or violation would have a material adverse
effect on the condition, financial or otherwise, or the earnings, business
affairs or business prospects of the Company and its subsidiaries considered as
one enterprise or of the Trust; and the entry by the Company into the Purchase
Contracts underlying the Income PRIDES and the Growth PRIDES, the offer,
issuance and sale of the Securities as contemplated herein and in the
Prospectus, the issuance and sale of the Common Securities and the Debentures as
contemplated in the Common Securities Purchase Agreement and the Debenture
Purchase Agreement, respectively, and in the Prospectus, the offering of the
Shares and the issuance and sale of the Shares by the Company pursuant to the
Purchase Contracts, and the execution, delivery and performance of the Operative
Documents and the consummation of the transactions contemplated therein
(including, without limitation, the issuance and sale of the Securities, the
Trust Securities and the Debentures and the use of the proceeds therefrom as
described in the Prospectus under the caption "Use of Proceeds") and compliance
by the Company and the Trust with their respective obligations thereunder, have
been duly authorized by all necessary corporate and trust action and do not and
will not conflict with or constitute a breach of, or default under, or result in
the creation or imposition of any lien,
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charge or encumbrance upon any property or assets of the Company or any of the
Significant Subsidiaries or the Trust pursuant to, any contract, indenture,
mortgage, loan agreement, note, lease or other instrument to which the Company
or any of the Significant Subsidiaries or the Trust is a party or by which it or
any of them may be bound (including, without limitation, the Subject
Instruments), or to which any of the property or assets of the Company or any of
the Significant Subsidiaries or the Trust is subject, except (other than in the
case of the Subject Instruments) for a conflict, breach, default, lien, charge
or encumbrance which would not have a material adverse effect on the condition,
financial or otherwise, or the earnings, business affairs or business prospects
of the Company and its subsidiaries considered as one enterprise or of the
Trust, nor will such action result in any violation of the provisions of the
Organizational Documents of the Company or any of the Significant Subsidiaries,
the Declaration or Certificate of Trust, or any applicable law, administrative
regulation or administrative or court order or decree.
(x) There is no action, suit or proceeding before or by any
court or governmental agency or body, domestic or foreign, now pending, or, to
the knowledge of the Company, threatened, against or affecting the Company or
any of its subsidiaries which is required to be disclosed in the Registration
Statement (other than as disclosed therein), or which is not so disclosed and
(net of reserves and insurance) the Company believes might result in any
material adverse change in the condition, financial or otherwise, or in the
earnings, business affairs or business prospects of the Company and its
subsidiaries considered as one enterprise or of the Trust, or which might
materially and adversely affect the properties or assets thereof or which might
materially and adversely affect the consummation of the transactions
contemplated by the Operative Documents; all pending legal or governmental
proceedings to which the Company or any subsidiary is a party or of which any of
their respective property or assets is the subject which are not described in or
incorporated by reference in the Registration Statement, including ordinary
routine litigation incidental to the business, are, considered in the aggregate
and net of reserves and insurance, not material to the Company and its
subsidiaries considered as one enterprise; there is no action, suit or
proceeding before or by any court or governmental agency or body, domestic or
foreign, now pending or, to the knowledge of the Offerors, threatened, against
or affecting the Trust; and there are no contracts or documents of the Company
or any of its subsidiaries or the Trust which are required to be filed as
exhibits to, or incorporated by reference in, the Registration Statement by the
1933 Act or by the 1933 Act Regulations which have not been so filed or
incorporated by reference.
(xi) No authorization, approval, consent, order, registration or
qualification of or with any court or governmental authority or agency is
required in connection with the entry by the Company into the Purchase Contracts
underlying the Income PRIDES and the Growth PRIDES, the offer, issuance or sale
of the Securities as contemplated herein and in the Prospectus, the issuance or
sale of the Common Securities or the Debentures as contemplated in the Common
Securities Purchase Agreement and Debenture Purchase Agreement, respectively,
and in the Prospectus, the offering of the Shares or the issuance or sale of the
Shares by the Company pursuant to the Purchase Contracts, or the execution,
delivery or performance by the Company or the Trust of the Operative Documents
or the consummation of the transactions contemplated therein or compliance by
the Company or the Trust with their respective obligations thereunder, except
such as have been obtained and made under the 1933 Act, the
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1933 Act Regulations, the 1934 Act and the rules and regulations of the
Commission thereunder (the "1934 Act Regulations"), the 1939 Act and the 1939
Act Regulations and such as may be required under state securities or Blue Sky
laws.
(xii) The documents incorporated or deemed to be incorporated
by reference in the Prospectus, at the time they were or hereafter are filed
with the Commission, complied and will comply in all material respects with the
requirements of the 1934 Act and the 1934 Act Regulations, and, when read
together with the other information in the Prospectus, at the respective times
the Registration Statement and any amendments thereto became or become
effective, at the date of this Agreement and at each Representation Date did
not, do not and will not contain an untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.
(xiii) The Offerors complied with, and are and will be in
compliance with, the provisions of that certain Florida act relating to
disclosure of doing business with Cuba, codified as Section 517.075 of the
Florida statutes, and the rules and regulations thereunder (collectively, the
"Cuba Act") or are exempt therefrom.
(xiv) The Debentures rank and will rank pari passu in right of
payment with all other senior unsecured indebtedness of the Company, including,
without limitation, borrowings under the Loan Agreement.
(xv) There are no holders of securities of the Company with
currently exercisable registration rights to have any securities registered as
part of the Registration Statement or included in the offering contemplated by
this Agreement.
(xvi) The Company and each of the Significant Subsidiaries have
good and marketable title to all of their respective properties, in each case
free and clear of all liens, encumbrances and defects, except (i) customary
liens and encumbrances arising in the ordinary course of the Company's
construction and development business and the financing thereof, (ii) as stated
or incorporated by reference in the Prospectus or (iii) such as do not
materially affect the value of such properties in the aggregate to the Company
and its subsidiaries considered as one enterprise and do not materially
interfere with the use made and proposed to be made of such properties.
(xvii) The Company and its Significant Subsidiaries possess such
certificates, authorities and permits issued by the appropriate state, federal
and foreign regulatory agencies or bodies necessary to conduct all material
aspects of the business now operated by them, and neither the Company nor any of
its Significant Subsidiaries has received any notice of proceedings relating to
the revocation or modification of any such certificate, authority or permit
which, singly or in the aggregate, if the subject of an unfavorable decision,
ruling or finding, would materially and adversely affect the condition,
financial or otherwise, or the earnings, business affairs or business prospects
of the Company and its subsidiaries considered as one enterprise.
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(xviii) No default or event of default with respect to any
Indebtedness (as such term is defined in the Officers' Certificate dated October
14, 1997 establishing the form and terms of the 7-3/4% Senior Notes) of the
Company or any of its Significant Subsidiaries entitling, or which, with notice
or lapse of time or both, would entitle, the holders thereof to accelerate the
maturity thereof exists or will exist as a result of the execution and delivery
of the Operative Documents, the issuance and sale of the Securities, the Trust
Securities or the Debentures, or the consummation of the transactions
contemplated by the Operative Documents.
(xix) The Company and each of the Significant Subsidiaries
have filed all tax returns required to be filed, which returns, as amended, are
complete and correct in all material respects, and neither the Company nor any
Significant Subsidiary is in default in the payment of any taxes which were
payable pursuant to said returns or any assessments with respect to said returns
which would materially and adversely affect the condition, financial or
otherwise, or the earnings, business affairs or business prospects of the
Company and its subsidiaries considered as one enterprise.
(xx) The Company and its Significant Subsidiaries maintain a
system of internal accounting controls sufficient to provide reasonable
assurances that (A) transactions are executed in accordance with management's
general or specific authorization; (B) transactions are recorded as necessary to
permit preparation of financial statements in conformity with generally accepted
accounting principles and to maintain accountability for assets; (C) access to
assets is permitted only in accordance with management's general or specific
authorization; and (D) the recorded accountability for assets is compared with
the existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.
(xxi) The Purchase Contract Agreement has been duly authorized
by the Company and, at the Closing Time and at each Date of Delivery (if any),
will have been duly executed and delivered by the Company and, assuming due
authorization, execution and delivery of the Purchase Contract Agreement by the
Purchase Contract Agent, will constitute a legal, valid and binding agreement of
the Company, enforceable in accordance with its terms except to the extent that
enforcement thereof may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws relating to or affecting creditors' rights
generally or by general equitable principles (regardless of whether enforcement
is considered in a proceeding at law or in equity).
(xxii) The Pledge Agreement has been duly authorized by the
Company and, at the Closing Time and at each Date of Delivery (if any), will
have been duly executed and delivered by the Company and, assuming due
authorization, execution and delivery of the Pledge Agreement by the Collateral
Agent and the Purchase Contract Agent, will constitute a legal, valid and
binding agreement of the Company, enforceable in accordance with its terms
except to the extent that enforcement thereof may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws relating to or
affecting creditors' rights generally or by general equitable principles
(regardless of whether enforcement is considered in a proceeding at law or in
equity).
(xxiii) (A) The Common Securities have been duly authorized by
the
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Declaration and, when delivered by the Trust to the Company against payment of
the consideration therefor set forth in the Common Securities Purchase
Agreement, will have been duly executed by the Trust and will be validly issued
and (except as provided in Section 4.4 of the Declaration) fully paid and
non-assessable undivided beneficial interests in the assets of the Trust; the
issuance of the Common Securities is not and will not be subject to preemptive
or other similar rights; and at each Representation Date all of the issued and
outstanding Common Securities will be directly owned by the Company free and
clear of any security interest, mortgage, pledge, lien, encumbrance, claim or
equitable right. (B) The Capital Securities have been duly authorized by the
Declaration and, when issued and authenticated in accordance with the provisions
of the Declaration and delivered against payment of the consideration therefor
set forth in this Agreement, will have been duly executed by the Trust, will be
validly issued, fully paid and non-assessable undivided beneficial interests in
the assets in the Trust and will be entitled to the benefits of the Declaration;
the issuance of the Capital Securities is not and will not be subject to
preemptive or other similar rights; and holders of Capital Securities will be
entitled to the same limitation of personal liability extended to stockholders
of private corporations for profit organized under the General Corporation Law
of the State of Delaware.
(xxiv) The Declaration has been duly authorized by the Company
and, at the Closing Time and at each Date of Delivery (if any), will have been
executed and delivered by the Company and the Regular Trustees, and assuming due
authorization, execution and delivery of the Declaration by the Institutional
Trustee and the Delaware Trustee, the Declaration will, at the Closing Time and
at each Date of Delivery (if any), be a legal, valid and binding obligation of
the Company and the Regular Trustees, enforceable in accordance with its terms,
except to the extent that enforcement thereof may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws relating to or
affecting creditors' rights generally or by general equitable principles
(regardless of whether enforcement is considered in a proceeding at law or in
equity), and except to the extent that rights to indemnification thereunder may
be limited by applicable law; and the Declaration has been duly qualified under
the 1939 Act.
(xxv) The Guarantee Agreement has been duly authorized by the
Company and, at the Closing Time and at each Date of Delivery (if any), will
have been duly executed and delivered by the Company and, assuming due
authorization, execution and delivery of the Guarantee Agreement by the
Guarantee Trustee, will constitute a legal, valid and binding agreement of the
Company, enforceable in accordance with its terms except to the extent that
enforcement thereof may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws relating to or affecting creditors' rights
generally or by general equitable principles (regardless of whether enforcement
is considered in a proceeding at law or in equity); and the Guarantee Agreement
has been duly qualified under the 0000 Xxx.
(xxvi) The Indenture has been duly authorized by the Company
and, at the Closing Time and at each Date of Delivery (if any), will have been
executed and delivered by the Company and, assuming due authorization, execution
and delivery of the Indenture by the Debt Trustee, will constitute a legal,
valid and binding agreement of the Company, enforceable in accordance with its
terms except to the extent that enforcement thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
relating to or affecting creditors' rights generally or by general equitable
principles (regardless of whether enforcement
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is considered in a proceeding at law or in equity); and the Indenture has been
duly qualified under the 0000 Xxx.
(xxvii) The Debentures have been duly authorized by the Company
and, when authenticated in the manner provided for in the Indenture and
delivered to the Trust against payment of the consideration therefor set forth
in the Debenture Purchase Agreement, will have been duly executed and delivered
by the Company and will constitute legal, valid and binding obligations of the
Company, enforceable in accordance with their terms except to the extent that
enforcement thereof may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws relating to or affecting creditors' rights
generally or by general equitable principles (regardless of whether enforcement
is considered in a proceeding at law or in equity), and will be entitled to the
benefits of the Indenture.
(xxviii) This Agreement and the Remarketing Agreement have been
duly authorized, executed and delivered by each of the Company and the Trust.
The Supplemental Remarketing Agreement has been duly authorized by each of the
Company and the Trust and, at the date of the Supplemental Remarketing Agreement
and at the Remarketing Closing Date, will have been duly executed and delivered
by each of the Company and, if applicable, the Trust.
(xxix) The Common Securities Purchase Agreement and Debenture
Purchase Agreement have been duly authorized, executed and delivered by each of
the Company and the Trust.
(xxx) The Income PRIDES and the Growth PRIDES have been duly
authorized by the Company and, when delivered against payment therefor as
provided herein, will have been duly executed and delivered by the Company, will
be validly issued and outstanding, fully paid and non-assessable and will
constitute valid and binding obligations of the Company entitled to the benefits
of the Purchase Contract Agreement and enforceable against the Company in
accordance with their terms, except to the extent that enforcement thereof may
be limited by bankruptcy, insolvency, reorganization, moratorium or other
similar laws relating to or affecting creditors' rights generally or by general
equitable principles (regardless of whether enforcement is considered in a
proceeding at law or in equity); the Income PRIDES, the Growth PRIDES and the
Shares have been duly registered under the 1934 Act and have been authorized for
listing on the NYSE, subject to official notice of issuance; and the issuance of
the Income PRIDES and the Growth PRIDES is not subject to preemptive or other
similar rights. The Purchase Contracts constituting a part of the Income PRIDES
and the Growth PRIDES have been duly authorized by the Company and, when such
Income PRIDES and Growth PRIDES are delivered against payment therefor as
provided herein, will be valid and binding obligations of the Company,
enforceable against the Company in accordance with their terms, except to the
extent that enforcement thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or affecting
creditors' rights generally or by general equitable principles (regardless of
whether enforcement is considered in a proceeding at law or in equity).
(xxxi) The Shares issuable pursuant to the Purchase Contract
Agreement have been duly authorized and reserved for issuance by the Company
and, when issued and delivered in accordance with the provisions of the Purchase
Contract Agreement, will be validly issued and
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fully paid and non-assessable; and the issuance of such Shares is not and will
not be subject to preemptive or other similar rights.
(xxxii) Each of the Regular Trustees is an employee of the
Company and has been authorized by the Company to execute and deliver the
Declaration.
(xxxiii) None of the Trust nor the Company or any of its
subsidiaries is, and upon the issuance and sale of the Securities, the Trust
Securities and the Debentures as herein contemplated and the application of the
net proceeds therefrom as described in the Prospectus, will not be, an
"investment company" or an entity "controlled" by an "investment company" as
such terms are defined in the Investment Company Act of 1940, as amended (the
"1940 Act").
(xxxiv) The Operative Documents conform and will conform to the
respective descriptions thereof in the Prospectus.
(xxxv) The issuance and sale of the Securities, the Debentures
and the Shares has been expressly approved by resolutions adopted by at least a
two-thirds vote of the Continuing Directors (as defined in Article Eighth of the
Company's charter) of the Company.
(b) Any certificate signed by any officer of the Company or a
Trustee of the Trust and delivered to the Representatives or to counsel for the
Underwriters shall be deemed a representation and warranty by the Company and
the Trust to the Underwriters as to the matters covered thereby.
SECTION 2. Sale and Delivery to Underwriters; Closing.
(a) On the basis of the representations and warranties herein
contained and subject to the terms and conditions herein set forth, the Offerors
agree to sell to each Underwriter, severally and not jointly, and each
Underwriter, severally and not jointly, agrees to purchase from the Offerors, at
the respective prices set forth in Schedule B, the number of each type of
Initial Securities set forth in Schedule A opposite the name of such
Underwriter, plus any additional number of Initial Securities which such
Underwriter may become obligated to purchase pursuant to the provisions of
Section 10 hereof.
(b) In addition, on the basis of the representations and warranties
herein contained and subject to the terms and conditions herein set forth, the
Offerors hereby grant an option to the Underwriters, severally and not jointly,
to purchase up to an additional 2,475,000 Income PRIDES at the price set forth
in Schedule B. The option hereby granted will expire 30 days after the date
hereof and may be exercised in whole or in part from time to time only for the
purpose of covering over-allotments which may be made in connection with the
offering and distribution of the Initial Securities upon notice by the
Representatives to the Company setting forth the number of Option Securities as
to which the several Underwriters are then exercising the option and the time
and date of payment and delivery for such Option Securities. Any such time and
date of delivery (a "Date of Delivery") shall be determined by the
Representatives, but shall not be later than seven full business days after the
exercise of said option, nor in any event prior to the Closing Time. If the
option is exercised as to all or any portion of the Option Securities, each
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of the Underwriters, acting severally and not jointly, will purchase that
proportion of the total number of Option Securities then being purchased which
the number of Initial Securities of such type set forth in Schedule A opposite
the name of such Underwriter bears to the total number of Initial Securities of
such type, subject in each case to such adjustments as the Representatives in
their discretion shall make to eliminate any sales or purchases of fractional
securities.
(c) The Capital Securities and Treasury Securities underlying the
Securities will be pledged with the Collateral Agent to secure the holders'
obligations to purchase Shares under the Purchase Contracts. Such pledge shall
be effected by the transfer to the Collateral Agent of the Capital Securities
and Treasury Securities to be pledged at the Closing Time and each Date of
Delivery, if any, in accordance with the Pledge Agreement.
(d) Delivery of certificates for the Initial Securities shall be
made at the offices of the Representatives in New York, against the delivery to
the Collateral Agent of the Capital Securities and Treasury Securities relating
to the Initial Securities by the Representatives or on their behalf, and payment
of the purchase price for the Initial Securities shall be made at the offices of
Skadden, Arps, Slate, Xxxxxxx & Xxxx, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000, or at such other place as shall be agreed upon by the Representatives and
the Offerors, at 6:00 a.m. (California time) on the third (or fourth, if the
pricing occurs after 4:30 p.m. (Eastern time) on any given day) business day
after the date hereof (unless postponed in accordance with the provisions of
Section 10), or such other time not later than ten business days after such date
as shall be agreed upon by the Representatives and the Offerors (such time and
date of payment and delivery being referred to herein as the "Closing Time").
In addition, in the event that any or all of the Option Securities
are purchased by the Underwriters, delivery of certificates for such Option
Securities, delivery to the Collateral Agent of the Capital Securities relating
to such Option Securities, and payment for such Option Securities, shall be made
at the respective offices mentioned above, or at such other place as shall be
agreed upon by the Representatives and the Offerors, on each Date of Delivery as
specified in the notice from the Representatives to the Company.
Payment for the Securities purchased by the Underwriters shall be
made by wire transfer of immediately available funds to a bank account
designated by the Offerors, against delivery to the Representatives for the
respective accounts of the Underwriters of certificates for the Securities to be
purchased by them and delivery to the Collateral Agent of the Capital Securities
and Treasury Securities relating to such Securities. It is understood that each
Underwriter has authorized the Representatives, for its account, to accept
delivery of, and receipt for, and make payments of the purchase price for, the
Initial Securities and the Option Securities, if any, which it has agreed to
purchase. Xxxxxxx Xxxxx, individually and not as a representative of the
Underwriters, may (but shall not be obligated to) make payment of the purchase
price for the Initial Securities or the Option Securities, if any, to be
purchased by any Underwriter whose funds have not been received by the Closing
Time or the relevant Date of Delivery, as the case may be, but such payment
shall not relieve such Underwriter from its obligations hereunder.
Certificates for the Initial Securities and the Option Securities,
if any, shall be in such denominations and registered in such names as the
Representatives may request in writing at
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least one full business day before the Closing Time or the relevant Date of
Delivery, as the case may be. The certificates for the Initial Securities and
the Option Securities, if any, will be made available for examination by the
Representatives no later than 10:00 a.m. (New York City time) on the last
business day prior to the Closing Time or the relevant Date of Delivery, as the
case may be.
In view of the fact that the proceeds from the sale of the Income
PRIDES and the Separate Capital Securities will be invested by the Trust in the
Debentures, and in view of the fact that the proceeds from the sale of the
Growth PRIDES will be used to purchase the underlying Treasury Securities and
that the proceeds from the Treasury Securities will be applied, subject to
certain possible exceptions, to purchase Shares from the Company, the Company
hereby agrees to pay the several Underwriters, as compensation (the
"Underwriters' Compensation") for their arranging for the investment therein of
such proceeds, the amounts set forth in Schedule B hereto. Such Underwriters'
Compensation shall be payable to the Underwriters by wire transfer of
immediately available funds to Xxxxxxx Xxxxx at the Closing Time and at each
Date of Delivery (if any).
(e) If settlement for any Option Securities occurs after the Closing
Time, the Offerors will deliver to the Underwriters on the relevant Date of
Delivery, and the several obligations of the Underwriters to purchase such
Option Securities shall be conditioned upon the receipt of, the documents
specified in Section 5(h) hereof.
SECTION 3. Covenants of the Offerors. The Offerors jointly and
severally consent and agree with each Underwriter as follows:
(a) The Offerors will notify the Representatives immediately, and
confirm the notice in writing, (i) of the effectiveness of the Registration
Statement, any Rule 462(b) Registration Statement or any post-effective
amendment to any Registration Statement, (ii) of the transmission to the
Commission for filing of the Prospectus, any Rule 462(b) Registration Statement
or any amendment to any Registration Statement or amendment or supplement to the
Prospectus or any document to be filed pursuant to the 1934 Act during any
period when the Prospectus is required to be delivered under the 1933 Act, (iii)
of the receipt of any comments or inquiries from the Commission relating to any
Registration Statement or Prospectus, (iv) of any request by the Commission for
any amendment to any Registration Statement or any amendment or supplement to
the Prospectus or for additional information and (v) of the issuance by the
Commission of any stop order suspending the effectiveness of the Registration
Statement or the initiation of any proceedings for that purpose. The Offerors
will make every reasonable effort to prevent the issuance of any stop order and,
if any stop order is issued, to obtain the lifting thereof at the earliest
possible moment.
(b) The Offerors will give the Representatives notice of their
intention to file or prepare any amendment to the Registration Statement
(including any post-effective amendment and any filing under Rule 462(b) of the
1933 Act Regulations), any Term Sheet or any amendment, supplement or revision
to either the prospectus included in the Registration Statement at the time it
became effective or to the Prospectus, whether pursuant to the 1933 Act, the
1934 Act or otherwise; will furnish the Representatives with copies of any such
amendment
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to the Registration Statement (including any post-effective amendment and any
filing under Rule 462(b)), Term Sheet, amendment, supplement or revision a
reasonable amount of time prior to such proposed filing or use, as the case may
be; and will not file or use any such amendment to the Registration Statement
(including any post-effective amendment and any filing under Rule 462(b)), Term
Sheet, amendment, supplement or revision to which the Representatives or counsel
for the Underwriters shall reasonably object.
(c) The Offerors have delivered to the Representatives one signed
copy of the Registration Statement as originally filed and of each amendment
thereto (including exhibits filed therewith or incorporated by reference therein
and documents incorporated or deemed to be incorporated by reference therein)
and will also deliver to the Representatives as many conformed copies of the
Registration Statement as originally filed and of each amendment thereto
(without exhibits) as the Representatives may reasonably request. The copies of
the Registration Statement and each amendment thereto furnished to the
Representatives will be identical to the electronically transmitted copies
thereof filed with the Commission pursuant to XXXXX, except to the extent
permitted by Regulation S-T.
(d) The Company will furnish to each Underwriter, from time to time
during the period when the Prospectus is required to be delivered under the 1933
Act or the 1934 Act, such number of copies of the Prospectus (as amended or
supplemented) as such Underwriter may reasonably request for the purposes
contemplated by the 1933 Act or the 1934 Act or the respective applicable rules
and regulations of the Commission thereunder. The Prospectus and any amendments
or supplements thereto furnished to the Underwriters will be identical to the
electronically transmitted copies thereof filed with the Commission pursuant to
XXXXX, except to the extent permitted by Regulation S-T.
(e) If any event shall occur as a result of which it is necessary,
in the opinion of counsel for the Underwriters, to amend or supplement the
Prospectus in order to make the Prospectus not misleading in the light of the
circumstances existing at the time it is delivered to a purchaser, the Offerors
will forthwith amend or supplement the Prospectus (in form and substance
satisfactory to the Representatives and counsel for the Underwriters) so that,
as so amended or supplemented, the Prospectus will not include an untrue
statement of a material fact or omit to state a material fact necessary in order
to make the statements therein, in the light of the circumstances existing at
the time it is delivered to a purchaser, not misleading, and the Offerors will
furnish to the Underwriters a reasonable number of copies of such amendment or
supplement.
(f) The Offerors will endeavor, in cooperation with the
Underwriters, to qualify the Securities, the Capital Securities, the Guarantee,
the Debentures and the Shares for offering and sale under the applicable
securities laws of such states and other jurisdictions of the United States as
the Representatives may designate; provided, however, that neither Offeror shall
be obligated to qualify as a foreign corporation or trust in any jurisdiction in
which it is not so qualified. In each jurisdiction in which the foregoing
securities have been so qualified, the Offerors will file such statements and
reports as may be required by the laws of such jurisdiction to continue such
qualification in effect for so long as may be required by applicable law. The
Offerors will promptly advise the Representatives of the receipt by either of
the Offerors of any notification with respect to the suspension of qualification
of any of the foregoing securities for sale in any
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state or jurisdiction or the initiating or threatening of any proceeding for
such purpose.
(g) The Company will make generally available to its security
holders as soon as practicable, but not later than 60 days after the close of
the period covered thereby (or 120 days in the case of the close of the
Company's fiscal year), an earnings statement (in form complying with the
provisions of Rule 158 of the 1933 Act Regulations) covering a twelve month
period beginning not later than the first day of the Company's fiscal quarter
next following the date of this Agreement.
(h) The Company and the Trust will use the net proceeds received by
them from the sale of the Securities and the Debentures, respectively, in the
manner to be specified in the Prospectus under "Use of Proceeds".
(i) The Company, during the period when the Prospectus is required
to be delivered under the 1933 Act or the 1934 Act, will file all documents
required to be filed with the Commission pursuant to Sections 13, 14 or 15 of
the 1934 Act within the time periods required by the 1934 Act and the 1934 Act
Regulations.
(j) In accordance with the Cuba Act, if applicable, and without
limitation to the provisions of Sections 6 and 7 hereof, the Offerors agree to
indemnify and hold harmless the Underwriters from and against any and all loss,
liability, claim, damage and expense whatsoever (including fees and
disbursements of counsel), as incurred, arising out of any violation by the
Offerors of the Cuba Act, if applicable.
(k) If, at the time that the Registration Statement became (or in
the case of a post-effective amendment becomes) effective, any information shall
have been omitted therefrom in reliance upon Rule 430A or Rule 434 of the 1933
Act Regulations, then immediately following the execution of this Agreement, the
Offerors will prepare, and file with the Commission in accordance with such Rule
430A or Rule 434 and Rule 424(b) of the 1933 Act Regulations, copies of an
amended Prospectus or Term Sheet, as the case may be, or, if required by such
Rule 430A, a post-effective amendment to the Registration Statement (including
an amended Prospectus), containing all information so omitted.
(l) If the Offerors elect to rely upon Rule 462(b), the Offerors
shall file a Rule 462(b) Registration Statement with the Commission in
compliance with Rule 462(b) and pay the applicable fees in accordance with Rule
111 of the 1933 Act Regulations by the earlier of (i) 10:00 p.m. Eastern time on
the date of this Agreement and (ii) the time confirmations are sent or given, as
specified by Rule 462(b)(2).
(m) The Offerors will use their best efforts to effect the listing
of the Income PRIDES, the Growth PRIDES and the Shares on the New York Stock
Exchange (the "NYSE"). The Offerors will register the Income PRIDES, the Growth
PRIDES and the Shares under the 1934 Act.
(n) During a period of 90 days after the date of this Agreement,
neither the Trust nor the Company will, without the prior written consent of
Xxxxxxx Xxxxx, directly or indirectly, sell,
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offer to sell, grant any option for the sale of, or otherwise dispose of, or
enter into any agreement to sell, any Income PRIDES, Growth PRIDES, Purchase
Contracts, Debentures, Capital Securities or Common Stock, or any securities of
the Company or any affiliate of the Company similar to the Income PRIDES, Growth
PRIDES, Purchase Contracts, Debentures, Capital Securities or Common Stock
(collectively, "Similar Securities") or any securities convertible into or
exchangeable or exercisable for Income PRIDES, Growth PRIDES, Purchase
Contracts, Debentures, Capital Securities or Common Stock or any such Similar
Securities, other than (i) to the Underwriters pursuant to this Agreement, to
the Trust pursuant to the Debenture Purchase Agreement and to the Company
pursuant to the Common Securities Purchase Agreement, (ii) shares of Common
Stock or options for shares of Common Stock issued pursuant to or sold in
connection with any employee benefit plan, dividend reinvestment plan and stock
option and stock purchase plan of the Company and its subsidiaries described in
the Registration Statement, (iii) any securities issued pursuant to a merger or
acquisition and (iv) the Growth PRIDES or Income PRIDES to be created or
recreated upon substitution of Capital Securities or Treasury Securities pledged
pursuant to the Pledge Agreement, or shares of Common Stock issuable upon early
settlement of the Income PRIDES or Growth PRIDES, or (B) enter into any swap or
any other agreement or any transaction that transfers, in whole or in part,
directly or indirectly, the economic consequence of ownership of any Income
PRIDES, Growth PRIDES, Purchase Contracts, Debentures, Capital Securities or
Common Stock or any Similar Securities or any securities convertible into or
exchangeable into or exercisable for Income PRIDES, Growth PRIDES, Purchase
Contracts, Debentures, Capital Securities, Common Stock or any such Similar
Securities, whether any such swap or transaction is to be settled by delivery of
Income PRIDES, Growth PRIDES, Purchase Contracts, Debentures, Capital
Securities, Common Stock, Similar Securities, other securities, in cash or
otherwise.
(o) The Company will reserve and keep available at all times, free
of preemptive or other similar rights and liens and adverse claims, sufficient
shares of Common Stock to satisfy its obligations to issue Shares upon
settlement of the Purchase Contracts and shall take all actions necessary to
keep effective the Registration Statement with respect to the Shares.
SECTION 4. Payment of Expenses. The Company will pay all expenses
incident to the performance by the Offerors of their respective obligations
under the Operative Documents, including: (i) the printing and filing of the
Registration Statement as originally filed and of each amendment thereto, (ii)
the printing or reproduction of the Operative Documents, (iii) the preparation,
issuance and delivery of the certificates for the Securities and the Shares,
(iv) the fees and disbursements of the Company's counsel and accountants, (v)
the qualification of the Securities, the Shares and certain other securities
under securities laws in accordance with the provisions of Section 3(f) hereof,
including filing fees and the reasonable fees and disbursements of counsel for
the Underwriters in connection therewith and in connection with the preparation
of the Blue Sky Survey, (vi) the printing and delivery to the Underwriters of
copies of the Registration Statement as originally filed and of each amendment
thereto, of each preliminary prospectus, any Term Sheet, and the Prospectus and
any amendments or supplements thereto, (vii) the printing and delivery to the
Underwriters of copies of the Blue Sky Survey, (viii) the fees and expenses of
the Trustees, Purchase Contract Agent, Collateral Agent, the Debt Trustee, and
any other fiduciaries or agents, including the fees and disbursements of their
respective counsel, (ix) any fees payable in connection with the rating of the
Securities, the Capital
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Securities or the Debentures; (x) any fees and expenses of a depositary in
connection with holding the Securities in book-entry form; (xi) any fees payable
or expenses incurred pursuant to any Uniform Commercial Code related filings;
(xii) the fees and expenses incurred in connection with the listing of the
Income PRIDES, the Growth PRIDES and the Shares on the NYSE; and (xiii) the
filing fees of the National Association of Securities Dealers, Inc. in
connection with their review of the offering of the Securities.
If this Agreement is terminated by the Representatives in accordance
with the provisions of Section 5 or Section 9(a)(i) hereof with respect to the
Initial Securities or the Option Securities, as the case may be, the Company
shall reimburse the Underwriters for all of their out-of-pocket expenses,
including the reasonable fees and disbursements of counsel for the Underwriters.
SECTION 5. Conditions of Underwriter's Obligations. The obligations
of the several Underwriters hereunder are subject to the accuracy of the
representations and warranties of the Offerors contained herein or in
certificates of any officer of the Company or any of its subsidiaries or any
trustee of the Trust delivered pursuant to the provisions hereof, to the
performance by the Offerors of their covenants and other obligations hereunder,
and to the following further conditions:
(a) The Registration Statement, including any Rule 462(b)
Registration Statement, have become effective and at the Closing Time and any
Date of Delivery, no stop order suspending the effectiveness of the Registration
Statement shall have been issued under the 1933 Act or proceedings therefor
initiated or threatened by the Commission, and any request on the part of the
Commission for additional information shall have been complied with to the
satisfaction of counsel to the Underwriters. A prospectus containing the Rule
430A Information shall have been filed with the Commission in accordance with
Rule 424(b) (or at post-effective amendment providing such information shall
have been filed and declared effective in accordance with the requirements of
Rule 430A) or, if the Company has elected to rely upon Rule 434 of the 1933 Act
Regulations, a Term Sheet including the Rule 434 Information shall have been
filed with the Commission in accordance with Rule 424(b).
(b) At the Closing Time the Representatives shall have received:
(1) The favorable opinion, dated as of Closing Time, of Xxxxxx,
Xxxxxx & Xxxxx LLP, counsel for the Company, in form and substance
satisfactory to counsel for the Underwriters, to the effect that:
(i) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the
State of Delaware.
(ii) The entry by the Company into the Purchase Contracts
underlying the Income PRIDES and the Growth PRIDES, the offer,
issuance and sale of the Securities as contemplated herein and
in the Prospectus, the issuance and sale of the Common
Securities and the Debentures as contemplated in the Common
Securities Purchase Agreement and the Debenture Purchase
Agreement,
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respectively, and in the Prospectus, the offering of the Shares
and the issuance and sale of the Shares by the Company pursuant
to the Purchase Contracts, and the execution, delivery and
performance of the Operative Documents and the consummation of
the transactions contemplated therein (including, without
limitation, the issuance of the Securities, the Trust Securities
and the Debentures and the use of the proceeds therefrom as
described in the Prospectus under the caption "Use of Proceeds")
and compliance by the Company and the Trust with their
respective obligations thereunder, do not and will not conflict
with or constitute a breach of, or default under, or result in
the creation or imposition of any lien, charge or encumbrance
upon any property or assets of the Company or any of its
Significant Subsidiaries or the Trust pursuant to, the 7-3/4%
Senior Notes, the 7-3/4% Senior Indenture, the 9-3/8% Senior
Subordinated Notes, the 9-3/8% Senior Subordinated Indenture,
the 9-5/8% Senior Subordinated Notes or the 9- 5/8% Senior
Subordinated Indenture.
(iii) The information in the Prospectus under the caption
"Description of Capital Stock," to the extent that it
constitutes matters of law, summaries of legal matters, the
Company's charter or by-laws, the Company's shareholder rights
agreement or other documents or proceedings, or legal
conclusions, has been reviewed by such counsel and is correct in
all material respects.
In rendering such opinion, such counsel shall state that,
insofar as such opinion concerns the Declaration or the Trust
Securities (which are governed by the laws of the State of Delaware)
or any instrument or agreement which is governed by the laws of the
State of New York, such counsel has assumed without investigation
that the laws of the States of Delaware or New York, as the case may
be, are the same as the laws of the State of California.
(2) The favorable opinion, dated as of Closing Time, of Xxxxxx
X. Xxxxxxx, Esq., Senior Vice President and General Counsel of the
Company, in form and substance satisfactory to counsel for the
Underwriters, to the effect that:
(i) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the
State of Delaware and has corporate power and authority to own,
lease and operate its properties and to conduct its business as
described in the Prospectus and to enter into and perform its
obligation under, and as contemplated under, the Operative
Documents to which it is a party.
(ii) To the best of such counsel's knowledge and
information, the Company is duly qualified as a foreign
corporation to transact business and is in good standing in each
jurisdiction in which such qualification is required, except
where the failure to so qualify would not have a material
adverse effect on the condition, financial or otherwise, or the
earnings, business affairs or business prospects of the Company
and its subsidiaries (as such term is defined in this Agreement)
considered as one enterprise.
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(iii) Each of the Company's Significant Domestic
Subsidiaries (as defined below) has been duly organized and is
validly existing as a corporation or limited partnership, as the
case may be, in good standing under the laws of the jurisdiction
of its incorporation or formation, as the case may be, has power
and authority as a corporation or limited partnership, as the
case may be to own, lease and operate its properties and to
conduct its business as described in the Prospectus and, to the
best of such counsel's knowledge and information, is duly
qualified to transact business and is in good standing in each
jurisdiction in which such qualification is required, whether by
reason of the ownership or leasing of property or the conduct of
business, except where the failure to so qualify would not have
a material adverse effect on the Company and its subsidiaries
considered as one enterprise or on their consolidated financial
condition or earnings; the Trust is qualified to transact
business as a foreign trust and is in good standing in each
jurisdiction in which such qualification is necessary, except
where the failure to so qualify or be in good standing would not
have a material adverse effect on the condition, financial or
otherwise, or the earnings, business affairs or business
prospects of the Trust; to the best of such counsel's knowledge
and information, all of the issued and outstanding capital stock
of each such Significant Domestic Subsidiary which is a
corporation has been duly authorized and validly issued, is
fully paid and non-assessable and is owned (except for directors
qualifying shares and a nominal number of shares held by
affiliated parties) by the Company, directly or through
subsidiaries, free and clear of any security interest, mortgage,
pledge, lien, encumbrance, claim or equity; and to the best of
such counsel's knowledge and information, all of the issued and
outstanding partnership interests in each such Significant
Domestic Subsidiary which is a limited partnership have been
duly authorized (if applicable) and validly issued, are fully
paid and non-assessable and are owned by the Company (except to
the extent that a minority interest in such limited partnership
is reflected in the Company's consolidated financial statements
included or incorporated by reference in the Prospectus),
directly or through subsidiaries, free and clear of any security
interest, mortgage, pledge, lien, encumbrance, claim or equity.
As used in this Agreement, the term "Significant Domestic
Subsidiaries" means all Significant Subsidiaries, other than any
Significant Subsidiaries organized and existing under the laws
of any jurisdiction other than the United States of America, any
State thereof or the District of Columbia.
(iv) The authorized, issued and outstanding capital stock
of the Company is as set forth in the Prospectus under
"Capitalization" (except for subsequent issuances, if any,
pursuant to the exercise of options issued under employee
benefit plans referred to in the Prospectus or in the documents
incorporated by reference therein); and the shares of issued and
outstanding Common Stock have been duly authorized and validly
issued and are fully paid and non-assessable.
(v) To the best of such counsel's knowledge and
information, there are
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no statutes or regulations required to be described in the
Registration Statement or the Prospectus or in the documents
incorporated by reference therein which are not described as
required and there are no legal or governmental proceedings
pending or threatened which are required to be disclosed in the
Registration Statement or in the documents incorporated by
reference therein, other than those disclosed therein, and all
pending legal or governmental proceedings to which the Company
or any subsidiary is a party or to which any of their property
is subject which are not described in or incorporated by
reference in the Registration Statement, including ordinary
routine litigation incidental to the business, are, considered
in the aggregate and net of reserves and insurance, not material
to the Company and its subsidiaries considered as one
enterprise.
(vi) The information under "Item 1. Business--Regulation
and Environmental Matters" and "Item 3. Legal Proceedings" in
the Company's 1997 Annual Report on Form 10-K and in Item 15 in
Part II of the Registration Statement, to the extent that such
information constitutes matters of law, summaries of legal
matters, summaries of securities, instruments, agreements or
other documents or legal conclusions, has been reviewed by such
counsel and is correct in all material respects.
(vii) To the best of such counsel's knowledge and
information, there are no contracts, indentures, mortgages, loan
agreements, notes, leases or other instruments required to be
described or referred to in the Registration Statement or to be
filed or incorporated by reference as exhibits thereto other
than those described or referred to or filed as exhibits
thereto, the descriptions thereof or references thereto are
correct, and, to the best of such counsel's knowledge, no
default exists in the due performance or observance of any
obligation, agreement, covenant or condition contained in (A)
any Subject Instrument or (B) any other contract, indenture,
mortgage, loan agreement, note, lease or other instrument so
described, referred to or filed or incorporated by reference,
which default (other than in the case of the Subject
Instruments) could have a material adverse effect on the Company
and its subsidiaries considered as one enterprise or on their
consolidated financial condition or earnings.
(viii) No authorization, approval, consent, order,
registration or qualification of or with any court or
governmental authority or agency is required in connection with
the entry by the Company into the Purchase Contracts underlying
the Income PRIDES and the Growth PRIDES, the offer, issuance or
sale of the Securities as contemplated herein and in the
Prospectus, the issuance or sale of the Common Securities or the
Debentures as contemplated in the Common Securities Purchase
Agreement and Debenture Purchase Agreement, respectively, and in
the Prospectus, the offering of the Shares or the issuance or
sale of the Shares by the Company pursuant to the Purchase
Contracts, or the execution, delivery or performance by the
Company or the Trust of the Operative Documents or the
consummation of the transactions contemplated therein or
compliance by the Company or the Trust with their respective
obligations thereunder, except such
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as may be required under the 1933 Act, the 1933 Act Regulations,
the 1934 Act, the 1934 Act Regulations, the 1939 Act, the 1939
Act Regulations or state securities laws.
(ix) The entry by the Company into the Purchase Contracts
underlying the Income PRIDES and the Growth PRIDES, the offer,
issuance and sale of the Securities as contemplated herein and
in the Prospectus, the issuance and sale of the Common
Securities and the Debentures as contemplated in the Common
Securities Purchase Agreement and the Debenture Purchase
Agreement, respectively, and in the Prospectus, the offering of
the Shares and the issuance and sale of the Shares by the
Company pursuant to the Purchase Contracts, and the execution,
delivery and performance of the Operative Documents and the
consummation of the transactions contemplated therein
(including, without limitation, the issuance of the Securities,
the Trust Securities and the Debentures and the use of the
proceeds therefrom as described in the Prospectus under the
caption "Use of Proceeds") and compliance by the Company and the
Trust with their respective obligations thereunder, do not and
will not conflict with or constitute a breach of, or default
under, or result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of the Company
or any of its Significant Subsidiaries or the Trust pursuant to,
(A) any Subject Instrument or (B) to the best of such counsel's
knowledge and information, any other contract, indenture,
mortgage, loan agreement, note, lease or other instrument to
which the Company or any of its Significant Subsidiaries is a
party or by which it or any of them may be bound, or to which
any of the property or assets of the Company or any of its
Significant Subsidiaries is subject, nor will such action result
in any violation of the provisions of the charter or by-laws of
the Company, or any applicable law, administrative regulation or
administrative or court decree.
(x) The documents incorporated or deemed to be
incorporated by reference in the Prospectus (other than the
financial statements and supporting schedules included or
incorporated by reference therein, as to which no opinion need
be rendered), at the time they were filed with the Commission,
complied as to form in all material respects with the
requirements of the 1934 Act and the 1934 Act Regulations.
(xi) At the time the Registration Statement became
effective, the Registration Statement (other than the financial
statements and supporting schedules included or incorporated by
reference therein and any Form T-1, as to which no opinion need
be rendered) complied as to form in all material respects with
the requirements of the 1933 Act and the 1933 Act Regulations.
(xii) To the best of such counsel's knowledge and
information, no default with respect to any Indebtedness of the
Company or any of its subsidiaries entitling, or which, with
notice or lapse of time or both, would entitle, the holders
thereof to accelerate the maturity thereof exists or will exist
as a result of the
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execution and delivery of the Operative Documents, the issuance
and sale of the Securities, the Trust Securities or the Shares
or the consummation of the transactions contemplated by the
Operative Documents.
In rendering such opinion, such counsel shall state that,
insofar as such opinion concerns the Declaration or the Trust
Securities (which are governed by the laws of the State of Delaware)
or any instrument or agreement which is governed by the laws of the
State of New York, such counsel has assumed without investigation
that the laws of the States of Delaware or New York, as the case may
be, are the same as the laws of the State of California. In
addition, in rendering such opinion, such counsel may, as to other
matters governed by the laws of any jurisdiction other than the law
of the State of California, the General Corporation Law of the State
of Delaware and the federal law of the United States of America,
either (a) assume without any investigation that the law of the
State of California is the same as the law governing such other
matters for all purposes relevant to such opinion or (b) rely on an
opinion or opinions of local counsel satisfactory to the
Representatives, so long as each such opinion shall be dated as of
the Closing Time or the relevant Date of Delivery, as the case may
be, and in form and substance satisfactory to the Representatives,
and shall expressly permit the Underwriters to rely thereon as if
such opinion were addressed to the Underwriters.
(3) The favorable opinion, dated as of the Closing Time, of
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP, special counsel to the
Offerors, in form and substance satisfactory to counsel for the
Underwriters, to the effect that:
(i) The Registration Statement (including any 462(b)
Registration Statement) as of its effective date, and the
Prospectus, as of the date thereof, appeared on their face to be
appropriately responsive in all material respects to the
requirements of the 1933 Act and the 1933 Act Regulations,
except that in each case such counsel need not express any
opinion as to the financial statements, schedules and other
financial data included or incorporated by reference therein or
excluded therefrom, or any statements of eligibility on Forms
T-1.
(ii) The Shares initially subject to the Purchase Contract
Agreement have been duly authorized and reserved for issuance by
the Company and, when certificates representing the Shares in
the form of the specimen certificate examined by such counsel
have been issued by the Company in accordance with the
provisions of the Purchase Contract Agreement and the Purchase
Contracts, will be validly issued, fully paid and
non-assessable; and the issuance of the Shares is not subject to
preemptive or other similar rights arising under the General
Corporation Law of the State of Delaware, any other Applicable
Law (as defined below) or under the charter or by-laws of the
Company.
(iii) The issuance of the Income PRIDES and Growth PRIDES is
not subject to preemptive or other similar rights arising under
the General Corporation Law of the State of Delaware, any other
Applicable Law or the charter or by-laws of the Company.
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(iv) This Agreement, the Remarketing Agreement, the Common
Securities Purchase Agreement and the Debenture Purchase
Agreement have been duly authorized, executed and delivered by
each of the Company and the Trust. The Supplemental Remarketing
Agreement in the form attached as Exhibit A to the Remarketing
Agreement has been duly authorized by the Company and the Trust.
(v) The Purchase Contract Agreement has been duly
authorized, executed and delivered by the Company and
constitutes a valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms,
except to the extent that enforcement thereof may be limited by
(i) bankruptcy, insolvency, reorganization, moratorium,
fraudulent conveyance or other similar laws now or hereafter in
effect relating to creditors' rights generally and (ii) general
principles of equity (regardless of whether enforceability is
considered in a proceeding at law or in equity).
(vi) The Pledge Agreement has been duly authorized,
executed and delivered by the Company and constitutes a valid
and binding obligation of the Company, enforceable against the
Company in accordance with its terms except to the extent that
enforcement thereof may be limited by (i) bankruptcy,
insolvency, reorganization, moratorium, fraudulent conveyance or
other similar laws now or hereafter in effect relating to
creditors' rights generally and (ii) general principles of
equity (regardless of whether enforceability is considered in a
proceeding at law or in equity).
(vii) The Guarantee Agreement has been duly authorized,
executed and delivered by the Company and, insofar as it relates
to the guarantee of the Capital Securities, constitutes a valid
and binding obligation of the Company, enforceable against the
Company in accordance with its terms, except to the extent that
enforcement thereof may be limited by (i) bankruptcy,
insolvency, reorganization, moratorium, fraudulent conveyance or
other similar laws now or hereafter in effect relating to
creditors' rights generally and (ii) general principles of
equity (regardless of whether enforceability is considered in a
proceeding at law or in equity).
(viii) The Indenture has been duly authorized, executed and
delivered by the Company and is a valid and binding obligation
of the Company, enforceable against the Company in accordance
with its terms, except to the extent that enforcement thereof
may be limited by (i) bankruptcy, insolvency, reorganization,
moratorium, fraudulent conveyance or other similar laws now or
hereafter in effect relating to creditors' rights generally and
(ii) general principles of equity (regardless of whether
enforceability is considered in a proceeding at law or in
equity).
(ix) The Debentures (i) are entitled to the benefits of the
Indenture, (ii)
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have been duly authorized, executed and delivered by the
Company, and (iii) when authenticated by the Debt Trustee in the
manner provided for in the Indenture and delivered to the Trust
against payment therefor as set forth in the Debenture Purchase
Agreement, will constitute valid and binding obligations of the
Company, enforceable against the Company in accordance with
their terms, except to the extent that enforcement thereof may
be limited by (i) bankruptcy, insolvency, reorganization,
moratorium, fraudulent conveyance or other similar laws now or
hereafter in effect relating to creditors' rights generally and
(ii) general principles of equity (regardless of whether
enforceability is considered in a proceeding at law or in
equity).
(x) The entry by the Company into the Purchase Contracts,
the offer, issuance and sale by the Company and the Trust of the
Income PRIDES, the Growth PRIDES and the Capital Securities as
contemplated by this Agreement and the Prospectus, the issuance
and sale of the Shares by the Company pursuant to the Purchase
Contracts, the execution and delivery of the Operative
Documents, and the consummation of the transactions contemplated
herein and therein will not (i) contravene any provision of the
charter or by-laws of the Company, the Declaration or the
Certificate of Trust, or (ii) violate any Applicable Laws or
Applicable Orders (as defined below).
(xi) When the Income PRIDES and the Growth PRIDES are
issued in accordance with the terms of the Purchase Contract
Agreement and delivered against payment therefor, the Income
PRIDES and the Growth PRIDES will entitle the holders thereof to
the rights specified in the Purchase Contract Agreement.
(xii) The provisions of the Pledge Agreement are effective
to create, in favor of the Collateral Agent for the benefit of
the Company to secure the obligations of the holders under the
Purchase Contract Agreement, a valid security interest in the
Purchase Contract Agent's rights in all Security Entitlements
(as defined below).
(xiii) The provisions of the Pledge Agreement are effective
to perfect the security interest of the Collateral Agent for the
benefit of the Company in the Security Entitlements.
(xiv) The certificates evidencing the Income PRIDES and the
Growth PRIDES are in the respective forms contemplated by the
Purchase Contract Agreement, the certificates evidencing the
Capital Securities and the Common Securities are in the
respective forms contemplated by the Declaration and the
certificates evidencing the Debentures are in the form
contemplated by the Indenture. The certificates evidencing the
Shares comply with all applicable requirements of the General
Corporation Law of the State of Delaware and with the applicable
requirements of the NYSE.
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(xv) The statements in the Prospectus under the captions
"Description of the FELINE PRIDES," "Description of the Purchase
Contracts" (except under the subsection "Book-Entry System"),
"Certain Provisions of the Purchase Contract Agreement and the
Pledge Agreement," "Description of Capital Securities,"
"Description of the Guarantee," "Description of the Debentures"
and "Effect of Obligations Under the Debentures and the
Guarantee," to the extent that they purport to summarize
provisions of documents described therein, fairly summarize such
provisions.
(xvi) No Governmental Approval (as defined below) which
has not been obtained or made (or such as will be obtained or
made pursuant to the Remarketing Agreement) is required for the
entry by the Company into the Purchase Contracts, the issuance
and sale by the Company and the Trust of the Income PRIDES, the
Growth PRIDES and the Capital Securities pursuant to this
Agreement or the issuance and sale of the Shares by the Company
pursuant to such Purchase Contracts or the performance by the
Company and the Trust of their respective obligations under the
Operative Documents.
(xvii) Neither the Trust nor the Company is, or upon the
issuance and sale of the Securities and the Capital Securities
as contemplated in this Agreement and the application of the net
proceeds therefrom as described in the Prospectus will be, an
"investment company," as such term is defined in the 1940 Act.
(xviii) The Trust has been duly created and is validly
existing in good standing as a business trust under the Delaware
Act, and has the business trust power and authority to conduct
its business as described in the Prospectus.
(xix) The Declaration has been duly authorized, executed
and delivered by the Company, has been duly executed and
delivered by the Regular Trustees and is a valid and binding
obligation of the Company and the Regular Trustees, enforceable
against the Company and each of the Regular Trustees in
accordance with its terms, except to the extent that enforcement
thereof may be limited by (i) bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or
hereafter in effect relating to creditors' rights generally and
(ii) general principles of equity (regardless of whether
enforceability is considered in a proceeding at law or in
equity).
(xx) Under the Delaware Trust Act and the Declaration,
the Trust has the power and authority to (a) execute and
deliver, and to perform its obligations pursuant to this
Agreement, the Remarketing Agreement and the Supplemental
Remarketing Agreement, (b) issue and perform its obligations
under the Trust Securities and (c) perform its obligations under
the Declaration.
(xxi) The execution and delivery by the Trust of this
Agreement, the Remarketing Agreement and the Supplemental
Remarketing Agreement and the performance by the Trust of its
obligations thereunder, have been duly authorized
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by all necessary action on the part of the Trust.
(xxii) The Capital Securities have been duly authorized by
the Declaration and executed by a Regular Trustee and, when
issued and authenticated in accordance with the terms of the
Declaration and delivered against payment of the consideration
for the Income PRIDES, the Growth PRIDES and the Capital
Securities specified in this Agreement, will be validly issued
and, subject to the qualification set forth below, fully paid
and nonassessable undivided beneficial interests in the assets
of the Trust and will be entitled to the benefits of the
Declaration; and the holders of the Capital Securities will be
entitled to the same limitation of personal liability extended
to stockholders of private corporations for profit organized
under the General Corporation Law of the State of Delaware. In
rendering such opinion, such counsel may state that they bring
to your attention, however, that the holders of Capital
Securities may be obligated, pursuant to the Declaration, to (i)
provide indemnity and/or security in connection with and pay
taxes or governmental charges arising from transfers of Capital
Securities and the issuance of replacement Capital Securities
and (ii) provide security and indemnity in connection with
requests of or directions to the Institutional Trustee to
exercise its rights and powers under the Declaration. The
issuance of the Capital Securities is not subject to preemptive
or other similar rights arising under the Delaware Act or the
Declaration.
(xxiii) The Common Securities have been authorized by the
Declaration and executed by a Regular Trustee and, when issued
and executed in accordance with the terms of the Declaration,
and delivered and paid for as set forth in the Common Securities
Purchase Agreement, will be validly issued, undivided beneficial
interests in the assets of the Trust. The issuance of the Common
Securities is not subject to preemptive or other similar rights
arising under the Delaware Act or the Declaration.
(xxiv) None of the execution and delivery by the Trust of,
or the consummation by the Trust of the transactions
contemplated by, this Agreement, the Remarketing Agreement or
the Supplemental Remarketing Agreement, or the issuance and sale
of the Capital Securities by the Trust in accordance with the
terms of this Agreement, or the consummation of the other
transactions contemplated thereby, will contravene any provision
of Applicable Law or the Declaration or any agreement, judgment,
order or decree applicable to the Trust which are identified to
such counsel in a trustee's certificate, in which a trustee of
the Trust shall indicate that such agreements, judgments, orders
or decrees are the only agreements, judgments, orders or decrees
which could reasonably be expected to result in a material
adverse change in the condition, financial or otherwise, or in
the earnings, business affairs or business prospects of the
Trust, whether or not arising in the ordinary course of
business.
(xxv) Under current U.S. federal income tax law: (a) the
Trust will be
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classified as a grantor trust and not as an association taxable
as a corporation; (b) the Debentures will be classified as
indebtedness of the Company and (c) the discussion in the
Prospectus under the caption "Federal Income Tax Consequences"
is a fair and accurate summary of the matters addressed therein,
based upon current law and the assumptions stated or referred to
therein. In rendering such opinion, such counsel may state that
their opinion is conditioned on the initial and continuing
accuracy of the facts, financial and other information,
covenants and representations set forth in certificates of
officers of the Company and the Trust and other documents deemed
necessary for this opinion.
(xxvi) The issuance and sale of the Income PRIDES and the
Growth PRIDES do not violate the Commodity Exchange Act or the
regulations of the Commodity Futures Trading Commission
thereunder.
(xxvii) Each Purchase Contract constituting a part of the
Income PRIDES or the Growth PRIDES being delivered on the date
of such opinion constitutes a valid and binding obligation of
the Company, enforceable against the Company in accordance with
its terms, except to the extent that enforcement thereof may be
limited by (i) bankruptcy, insolvency, reorganization,
moratorium or other similar laws now or hereafter in effect
relating to creditors' rights generally and (ii) general
principals of equity (regardless of whether enforceability is
considered in a proceeding at law or in equity); provided,
however, that upon the occurrence of a Termination Event (as
defined in the Purchase Contract Agreement), Section 365(e)(1)
of the Bankruptcy Code (11 U.S.C. Section 101-1330, as amended)
should not limit, invalidate or nullify the provisions of
Section 3.15 and 5.8 of the Purchase Contract Agreement or of
Section 4.3 of the Pledge Agreement that require termination of
the Purchase Contracts and release of the Collateral Agent's
security interest in the Capital Securities, the Debentures or
the Applicable Ownership Interest in the Treasury Portfolio (as
such terms are defined in the Declaration) as the case may be,
or the Treasury Securities; provided, however, that the
procedural restrictions respecting relief from the automatic
stay under Section 362 of the Bankruptcy Code may affect the
timing of the exercise of such rights and remedies.
(xxviii) The Income PRIDES and the Growth PRIDES (i) are
entitled to the benefits of the Purchase Contract Agreement,
(ii) have been duly authorized and executed by the Company, and
(iii) when duly authenticated by the Purchase Contract Agent in
the manner provided for in the Purchase Contract Agreement and
delivered against payment therefor as provided in this Agreement
and assuming the certificates evidencing the Income PRIDES and
Growth PRIDES have been duly executed by the Purchase Contract
Agent as attorney-in-fact of the holders thereof, will
constitute valid and binding obligations of the Company,
enforceable against the Company in accordance with their terms,
except to the extent that enforcement thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium, fraudulent
conveyance or other similar laws relating to or affecting
creditors' rights generally or by general equitable principles
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(regardless of whether enforcement is considered in a proceeding
at law or in equity).
As used in such opinion, (i) the "UCC" shall mean the Uniform
Commercial Code as in effect in the State of New York; (ii)
"Securities Intermediary" means The Bank of New York solely in its
capacity as a "securities intermediary" as defined in the UCC and
the Federal Book-Entry Regulations; (iii) "Securities Account" means
the account in the name "The First National Bank of Chicago, as
Purchase Contract Agent on behalf of the holders of certain
securities of KBHC Financing I, Collateral Account subject to the
security interest of The Bank of New York, as Collateral Agent, for
the benefit of Xxxxxxx and Broad Home Corporation, as pledgee"
established at the Securities Intermediary; (iv) "Security
Entitlements" means "security entitlements" as defined in Section
8102(a)(17) of the UCC with respect to Capital Securities and as
defined in the Federal Book-Entry Regulations with respect to
Treasury Securities, in each case, whether such Capital Securities
or Treasury Securities are at the date of such opinion or thereafter
credited to the Securities Account; and (iv) "Federal Book-Entry
Regulations" means the United States Department of the Treasury's
regulations governing the transfer and pledge of marketable
securities issued by the U.S. Treasury and maintained in the form of
entries in the TRADES book-entry system in the records of the
federal reserve banks and set forth in 61 Fed. Reg. 43626 (1996)
(codified at 31 C.F.R. Part 357).
In addition, as used in such opinion, (i) the term "Applicable
Laws" means in relation to the execution, delivery and performance
of the Operative Documents and the issuance and sale of the Income
PRIDES, the Growth PRIDES, the Debentures and the Trust Securities,
those laws, rules and regulations of the States of New York,
Delaware and California and the United States of America, in each
case, that, in the experience of such counsel, are ordinarily
applicable to transactions of the type contemplated by the Operative
Documents (except for United States, state and foreign securities or
Blue Sky laws, antifraud laws and the rules and regulations of the
National Association of Securities Dealers, Inc.) but without such
counsel having made any investigation regarding the applicability of
any other laws, rules or regulations; (ii) the term "Applicable
Orders" means those judgments, orders or decrees which are
identified to such counsel in an officer's certificate as an exhibit
to such opinion, in which the Company shall have indicated that such
judgments, orders or decrees are the only judgments, orders or
decrees which could reasonably be expected to result in a material
adverse change in the condition, financial or otherwise, or in the
earnings, business affairs or business prospects of the Company and
its subsidiaries, considered as one enterprise, whether or not
arising in the ordinary course of business; (iii) the term
"Governmental Authorities" means any New York, Delaware, California
or federal executive, legislative, judicial, administrative or
regulatory body under Applicable Laws; and (iv) the term
"Governmental Approval" means any consent, approval, license,
authorization or validation of, or notice to, or filing, recording
or registration with, any Governmental Authority required pursuant
to Applicable Laws.
In rendering such opinion, Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
shall expressly state that Xxxxxx, Xxxxxx & Xxxxx LLP, Xxxxxx X.
Xxxxxxx and Xxxxx & Xxxx LLP, in
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rendering their opinions pursuant to this Agreement, may rely upon
such opinion as if it were addressed to them as to all matters
arising under the laws of the State of Delaware other than the
General Corporation Law of the State of Delaware.
(4) The favorable opinion, dated as of the Closing Time, of the
Law Department of The First National Bank of Chicago ("FNBC"), as
Purchase Contract Agent and Debt Trustee, in form and substance
satisfactory to counsel for the Underwriters, to the effect that:
(i) FNBC is a national banking association with trust
powers, duly organized, validly existing and in good standing
under the laws of the United States with all necessary corporate
power and authority to execute and deliver, and to carry out and
perform its obligations under the terms of, the Purchase
Contract Agreement, the Pledge Agreement, the Indenture, and the
Remarketing Agreement.
(ii) The execution, delivery and performance by the
Purchase Contract Agent of the Purchase Contract Agreement, the
Pledge Agreement, and the Remarketing Agreement, and the
authentication and delivery by the Purchase Contract Agent of
the certificates evidencing the Income PRIDES and the Growth
PRIDES, have been duly authorized by all necessary corporate
action on the part of the Purchase Contract Agent. The Purchase
Contract Agreement and the Pledge Agreement have been duly
executed and delivered by the Purchase Contract Agent and
constitute valid and binding obligations of the Purchase
Contract Agent, enforceable against the Purchase Contract Agent
in accordance with their terms, except to the extent that
enforcement thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or
affecting creditors' rights generally or by general equitable
principles. The Remarketing Agreement has been duly executed and
delivered by the Purchase Contract Agent.
(iii) The execution and delivery of the Pledge Agreement,
the Remarketing Agreement and the certificates evidencing the
Income PRIDES and the Growth PRIDES by FNBC, as attorney-in-fact
of the holders of the Income PRIDES and the Growth PRIDES, have
been duly authorized by FNBC and the Pledge Agreement, the
Remarketing Agreement and such certificates have been duly
executed by FNBC in such capacity.
(iv) The execution, delivery and performance by the Debt
Trustee of the Indenture, and the authentication and delivery by
the Debt Trustee of the certificates evidencing the Debentures,
have been duly authorized by all necessary corporate action on
the part of the Debt Trustee. The Indenture has been duly
executed and delivered by the Debt Trustee and constitutes a
valid and binding obligation of the Debt Trustee, enforceable
against the Debt Trustee in accordance with its terms, except to
the extent that enforcement thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or other
similar laws relating
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to or affecting creditors' rights generally or by general
equitable principles.
(v) The execution, delivery and performance of the
Purchase Contract Agreement, the Pledge Agreement and the
Remarketing Agreement by the Purchase Contract Agent and the
execution, delivery and performance of the Indenture by the Debt
Trustee, do not conflict with, or constitute a breach of, FNBC's
charter or bylaws.
(vi) No consent, approval or authorization of, or
registration with or notice to, any Illinois or federal
governmental authority or agency is required for the execution,
delivery or performance by the Purchase Contract Agent of the
Purchase Contract Agreement, the Pledge Agreement or the
Remarketing Agreement or for the execution, delivery or
performance of the Indenture by the Debt Trustee.
(5) The favorable opinion, dated as of the Closing Time, of
Xxxxxx Xxxxxxxx LLP, counsel to FNBC, as Institutional Trustee and
Guarantee Trustee, and to First Chicago Delaware Inc., as Delaware
Trustee, in form and substance satisfactory to counsel for the
Underwriters, to the effect that:
(i) FNBC is a national banking association with trust
powers, duly organized, validly existing and in good standing
under the laws of the United States with all necessary corporate
power and authority to execute and deliver, and to carry out and
perform its obligations under the terms of, the Declaration and
the Guarantee.
(ii) The Delaware Trustee is a Delaware corporation duly
organized, validly existing and in good standing, with full
corporate power and authority to execute and deliver, and to
carry out and perform its obligations under the terms of, the
Declaration.
(iii) The execution, delivery and performance by each of the
Institutional Trustee and the Delaware Trustee of the
Declaration have been duly authorized by all necessary corporate
action on the part of the Institutional Trustee and the Delaware
Trustee, respectively. The Declaration has been duly executed
and delivered by the Institutional Trustee and the Delaware
Trustee and constitutes a valid and binding obligation of the
Institutional Trustee and the Delaware Trustee, enforceable
against the Institutional Trustee and the Delaware Trustee in
accordance with its terms, except to the extent that enforcement
thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or
affecting creditors' rights generally or by general equitable
principles.
(iv) The execution, delivery and performance by the
Guarantee Trustee of the Guarantee Agreement have been duly
authorized by all necessary corporate action on the part of the
Guarantee Trustee. The Guarantee Agreement has been duly
executed and delivered by the Guarantee Trustee and constitutes
a valid and
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binding agreement of the Guarantee Trustee, enforceable against
the Guarantee Trustee in accordance with its terms, except to
the extent that enforcement thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or other
similar laws relating to or affecting creditors' rights
generally or by general equitable principles.
(v) The execution, delivery and performance of the
Declaration by the Institutional Trustee and the Delaware
Trustee, and the execution, delivery and performance of the
Guarantee Agreement by the Guarantee Trustee, do not conflict
with, or constitute a breach of, FNBC's or the Delaware
Trustee's respective charter or bylaws.
(vi) No consent, approval or authorization of, or
registration with or notice to, any Delaware or federal banking
authority is required for the execution, delivery or performance
by the Institutional Trustee or the Delaware Trustee of the
Declaration or for the execution, delivery or performance of the
Guarantee Agreement by the Guarantee Trustee.
(6) The favorable opinion, dated as of the Closing Time, of
Xxxxx & Xxxx LLP, counsel for the Underwriters, in form and
substance satisfactory to the Representatives, with respect to the
issuance and sale of the Securities, and other related matters as
the Representatives may reasonably require, and the Company shall
have furnished to such counsel such documents as they request for
the purpose of enabling them to pass upon such matters. In rendering
such opinion, such counsel may rely, as to all matters arising under
or governed by the laws of the State of Delaware (other than the
General Corporation Law of the State of Delaware) upon the opinion
of Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP, special counsel to the
Offerors.
(7) In giving their opinions required by subsections (b)(1),
(b)(2) and (b)(6), respectively, of this Section, Xxxxxx, Xxxxxx &
Xxxxx LLP, Xxxxxx X. Xxxxxxx and Xxxxx & Xxxx LLP shall each
additionally state that nothing has come to their attention that
would lead them to believe that the Registration Statement (except
for financial statements and schedules and other financial data
included therein and any Form T-1, as to which counsel need make no
statement), at the time it became effective, contained an untrue
statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading or that the Prospectus (except for financial
statements and schedules and other financial data included therein,
as to which counsel need make no statement), as of its date (unless
the term "Prospectus" refers to a prospectus which has been provided
to the Underwriters by the Company for use in connection with the
offering of the Securities which differs from the Prospectus filed
with at the Commission pursuant to Rule 424(b) of the 1933 Act
Regulations, in which case at the time it is first provided to the
Underwriters for such use) or at the date of such opinion, included
or includes an untrue statement of a material fact or omitted or
omits to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which
they were made, not misleading.
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(c) At Closing Time, there shall not have been, since the date
hereof or since the respective dates as of which information is given in the
Registration Statement or the Prospectus, any material adverse change in the
condition, financial or otherwise, or in the earnings, business affairs or
business prospects of the Company and its subsidiaries considered as one
enterprise or of the Trust, in each case whether or not arising in the ordinary
course of business, and the Representatives shall have received a certificate of
the Company signed by the President or a Vice President of the Company and of
the chief financial or chief accounting officer of the Company, and a
certificate of the Trust signed by a Regular Trustee of the Trust, each dated as
of Closing Time, to the effect that (i) there has been no such material adverse
change, (ii) the representations and warranties in Section 1 are true and
correct with the same force and effect as though expressly made at and as of
Closing Time, (iii) each of the Company and the Trust has complied with all
agreements and satisfied all conditions on its part to be performed or satisfied
at or prior to Closing Time, (iv) no stop order suspending the effectiveness of
the Registration Statement has been issued and, to the best of such officers'
and Trustee's knowledge and information, no proceedings for that purpose have
been initiated or threatened by the Commission and (v) the rating assigned by
any nationally recognized statistical rating organization to the Income PRIDES,
the Growth PRIDES, any other securities of the Company or the Capital Securities
has not been lowered, and no such rating organization has publicly announced
that it has under surveillance or review its rating of the Income PRIDES, the
Growth PRIDES, any other securities of the Company or the Capital Securities
unless such announcement indicates that such organization is considering an
upgrade in such rating.
(d) (i) At the time of the execution of this Agreement, the
Representatives shall have received from Ernst & Young LLP a letter dated such
date, in form and substance satisfactory to the Representatives, containing
statements and information of the type ordinarily included in accountants'
"comfort letters" to underwriters with respect to the financial statements and
financial information included and incorporated by reference in the Registration
Statement and the Prospectus (including, without limitation, any pro forma
financial statements); and (ii) at Closing Time, the Representatives shall have
received from Ernst & Young LLP a letter, dated as of Closing Time, to the
effect that they reaffirm the statements made in the letter delivered pursuant
to clause (i) of this paragraph, except that the specified date referred to
shall be a date not more than three business days prior to the Closing Time.
(e) At Closing Time, the Income PRIDES, Growth PRIDES and Capital
Securities shall have a rating of at least Ba2, Ba1 and Ba2, respectively, from
Moody's Investor's Service Inc. ("Moody's") and at least BB-, BB- and BB-,
respectively from Standard & Poor's ("S&P"), and the Company shall have
delivered to the Representatives a letter from each such rating agency or other
evidence satisfactory to the Underwriter, confirming that the Securities have
such ratings.
(f) At the date of this Agreement, the Income PRIDES, the Growth
PRIDES and the Shares shall have been approved for listing on the NYSE, subject
to official notice of issuance.
(g) [Omitted intentionally]
(h) In the event that the Underwriters exercise their options
provided in Section 2(b)
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hereof to purchase all or any portion of the Option Securities, the
representations and warranties of the Offerors contained herein and the
statements in any certificates furnished by either of the Offerors hereunder
shall be true and correct as of, and as if made on, each Date of Delivery, and
at the relevant Date of Delivery, the Representatives shall have received:
(1) A certificate, dated such Date of Delivery, of the President
or a Vice-President of the Company and the chief financial officer
or chief accounting officer of the Company and a certificate of a
Regular Trustee of the Trust confirming that the certificate
delivered at the Closing Time pursuant to Section 5(c) hereof is
true and correct as of, and as if made on, such Date of Delivery.
(2) The favorable opinion of Xxxxxx, Xxxxxx & Xxxxx LLP, counsel
to the Company, in form and substance satisfactory to counsel for
the Underwriters, dated such Date of Delivery, relating to the
Option Securities and otherwise to the same effect as the opinion
required by Sections 5(b)(1) and 5(b)(7) hereof.
(3) The favorable opinion of Xxxxxx X. Xxxxxxx, Senior Vice
President and General Counsel of the Company, in form and substance
satisfactory to counsel for the Underwriters, dated such Date of
Delivery, relating to the Option Securities and otherwise to the
same effect as the opinion required by Sections 5(b)(2) and 5(b)(7)
hereof.
(4) The favorable opinion of Skadden, Arps, Slate, Xxxxxxx &
Xxxx, LLP, special counsel to the Offerors, in form and substance
satisfactory to counsel for the Underwriters, dated such Date of
Delivery, relating to the Option Securities and otherwise to the
same effect as the opinion required by Section 5(b)(3) hereof.
(5) The favorable opinion of the Law Department of FNBC, in form
and substance satisfactory to counsel for the Underwriters, dated
such Date of Delivery, relating to the Option Securities and
otherwise to the same effect as the opinion required by Section
5(b)(4) hereof.
(6) The favorable opinion of Xxxxxx Xxxxxxxx LLP, counsel to
FNBC and First Chicago Delaware Inc., in form and substance
satisfactory to counsel for the Underwriters, dated such Date of
Delivery, relating to the Option Securities and otherwise to the
same effect as the opinion required by Section 5(b)(5) hereof.
(7) The favorable opinion of Xxxxx & Wood LLP, counsel for the
Underwriters, dated such Date of Delivery, relating to the Option
Securities and otherwise to the same effect as the opinion required
by Section 5(b)(6) and 5(b)(7) hereof.
(8) A letter from Ernst & Young LLP, in form and substance
satisfactory to the Representatives and dated such Date of Delivery,
substantially the same in form and substance as the letter furnished
to the Representatives pursuant to Section 5(d)(ii) hereof, except
that the "specified date" in the letter furnished pursuant to this
Section shall be a date not more than five days prior to such Date
of Delivery.
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(9) At such Date of Delivery, the Income PRIDES, Growth PRIDES
and Capital Securities shall have a rating of at least Ba2, Ba1 and
Ba2, respectively, from Moody's and at least BB-, BB- and BB-,
respectively, from S&P.
(i) At Closing Time and at each Date of Delivery (if any), counsel
for the Underwriters shall have been furnished with such documents and opinions
as they may require for the purpose of enabling them to pass upon the issuance
and sale of the Securities as herein contemplated and related proceedings, or in
order to evidence the accuracy of any of the representations or warranties, or
the fulfillment of any of the conditions, herein contained; and all proceedings
taken by the Offerors in connection with the issuance and sale of the
Securities as herein contemplated shall be satisfactory in form and substance to
the Representatives and counsel for the Underwriters.
If any condition specified in this Section shall not have been
fulfilled when and as required to be fulfilled, this Agreement, or, in the case
of any condition to the purchase of Option Securities on a Date of Delivery
which is after the Closing Time, the obligations of the Underwriters to purchase
such Option Securities, may be terminated by the Representatives by notice to
the Company at any time at or prior to the Closing Time or such Date of
Delivery, as the case may be, and such termination shall be without liability of
any party to any other party except as provided in Section 4. Notwithstanding
any such termination, the provisions of Sections 4, 6, 7 and 8 shall remain in
effect.
SECTION 6. Indemnification.
(a) The Offerors agree, jointly and severally, to indemnify and hold
harmless each Underwriter and each person, if any, who controls any Underwriter
within the meaning of Section 15 of the 1933 Act as follows:
(i) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, arising out of any untrue statement
or alleged untrue statement of a material fact contained in the
Registration Statement (or any amendment thereto), including the
Rule 430A Information and the Rule 434 Information, if applicable,
or the omission or alleged omission therefrom of a material fact
required to be stated therein or necessary to make the statements
therein not misleading or arising out of any untrue statement or
alleged untrue statement of a material fact contained in any
preliminary prospectus or the Prospectus (or any amendment or
supplement thereto) or the omission or alleged omission therefrom of
a material fact necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not
misleading;
(ii) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the aggregate
amount paid in settlement of any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or
threatened, or of any claim whatsoever based upon any such untrue
statement or omission, or any such alleged untrue statement or
omission, if such settlement is effected with the written consent of
the Offerors; and
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(iii) against any and all expense whatsoever, as incurred
(including, subject to Section 6(c) hereof, the fees and
disbursements of counsel chosen by Xxxxxxx Xxxxx), reasonably
incurred in investigating, preparing or defending against any
litigation, or any investigation or proceeding by any governmental
agency or body, commenced or threatened, or any claim whatsoever
based upon any such untrue statement or omission, or any such
alleged untrue statement or omission, to the extent that any such
expense is not paid under (i) or (ii) above;
provided, however, that (A) the foregoing indemnity agreement shall not apply to
any loss, liability, claim, damage or expense to the extent arising out of any
untrue statement or omission or alleged untrue statement or omission (1) made in
reliance upon and in conformity with written information furnished to the
Offerors by any Underwriter through Xxxxxxx Xxxxx expressly for use in the
Registration Statement (or any amendment thereto) or any preliminary prospectus
or the Prospectus (or any amendment or supplement thereto) or (2) in any Form
T-1; and (B) the foregoing indemnity agreement with respect to any preliminary
prospectus shall not inure to the benefit of the Underwriter from whom the
person asserting any such losses, claims, damages or liabilities purchased
Securities, or any person controlling such Underwriter, if it shall be
determined that a copy of the Prospectus (as it may then be amended or
supplemented if the Company shall have furnished any amendments or supplements
thereto in accordance with the provisions of Sections 3(b) and 3(d) of this
Agreement, but excluding documents incorporated by reference therein) was not
sent or given by or on behalf of such Underwriter to such person, if such is
required by law, at or prior to the written confirmation of the sale of such
Securities to such person and if the Prospectus (as so amended or supplemented)
would have cured the defect giving rise to such loss, claim, damage, liability
or expense, except that this clause (B) shall not be applicable if such defect
shall have been corrected in a document which is incorporated or deemed to be
incorporated by reference in the Prospectus.
(b) Each Underwriter severally agrees to indemnify and hold harmless
the Company, its directors, each of its officers who signed the Registration
Statement, the Trust and each of its Trustees who signed the Registration
Statement, and each person, if any, who controls the Company or the Trust within
the meaning of Section 15 of the 1933 Act against any and all loss, liability,
claim, damage and expense described in the indemnity contained in subsection (a)
of this Section, as incurred, but only with respect to untrue statements or
omissions, or alleged untrue statements or omissions, made in the Registration
Statement (or any amendment thereto) or any preliminary prospectus or the
Prospectus (or any amendment or supplement thereto) in reliance upon and in
conformity with written information furnished to the Offerors by such
Underwriter through Xxxxxxx Xxxxx expressly for use in the Registration
Statement (or any amendment thereto) or such preliminary prospectus or the
Prospectus (or any amendment or supplement thereto).
(c) Each indemnified party shall give written notice as promptly as
reasonably practicable to each indemnifying party of any action commenced
against it in respect of which indemnity may be sought hereunder, but failure to
so notify an indemnifying party shall not relieve such indemnifying party from
any liability which it may have otherwise than on account of this indemnity
agreement. An indemnifying party may participate at its own expense in the
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defense of any such action. In no event shall the indemnifying parties be liable
for fees and expenses of more than one counsel (in addition to any local
counsel) separate from their own counsel for all indemnified parties in
connection with any one action or separate but similar or related actions in the
same jurisdiction arising out of the same general allegations or circumstances.
SECTION 7. Contribution. In order to provide for just and equitable
contribution in circumstances in which the indemnity agreement provided for in
Section 6 is for any reason held to be unenforceable by the indemnified parties
although applicable in accordance with its terms, the Offerors and the
Underwriters shall contribute to the aggregate losses, liabilities, claims,
damages and expenses of the nature contemplated by said indemnity agreement
incurred by the Offerors and one or more of the Underwriters, as incurred, in
such proportions that the Underwriters are responsible for that portion
represented by the percentage that the total underwriting commission set forth
in the table on the cover page of the Prospectus (or, if Rule 434 is used, in
the corresponding location on the Term Sheet) bears to the sum of (i) such total
underwriting commission plus (ii) the total proceeds to Company set forth in the
table on the cover page of the Prospectus (or, if Rule 434 is used, in the
corresponding location on the Term Sheet) and the Offerors are responsible for
the balance; provided, however, that no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the 0000 Xxx) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation; and provided, further, that no Underwriter shall be required
to contribute any amount in excess of the amount by which the total price at
which the Securities underwritten by it and distributed to the public were
offered to the public exceeds the amount of any damages which such Underwriter
has otherwise been required to pay by reason of any such untrue or alleged
untrue statement of a material fact or omission or alleged omission to state a
material fact. For purposes of this Section, each person, if any, who controls
an Underwriter within the meaning of Section 15 of the 1933 Act shall have the
same rights to contribution as such Underwriter, and each director of the
Company, each officer of the Company who signed the Registration Statement, the
Trust, each of its Trustees who signed the Registration Statement, and each
person, if any, who controls the Company or the Trust within the meaning of
Section 15 of the 1933 Act shall have the same rights to contribution as the
Offerors. The Offerors' obligations to contribute pursuant to this Section 7 are
joint and several. The Underwriters' respective obligations to contribute
pursuant to this Section 7 are several in proportion to the aggregate number of
Income PRIDES set forth opposite their respective names in Schedule A hereto and
not joint.
SECTION 8. Representations, Warranties and Agreements to Survive
Delivery. All representations, warranties and agreements contained in this
Agreement, or contained in certificates of officers of the Company or trustees
of the Trust submitted pursuant hereto, shall remain operative and in full force
and effect, regardless of any investigation made by or on behalf of any
Underwriter or any controlling person, or by or on behalf of the Company or the
Trust, and shall survive delivery of the Securities to the Underwriters.
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SECTION 9. Termination of Agreement.
(a) The Representatives may terminate this Agreement, by notice to
the Company, at any time at or prior to Closing Time (i) if there has been,
since the date of this Agreement or since the respective dates as of which
information is given in the Registration Statement, any material adverse change
in the condition, financial or otherwise, or in the earnings, business affairs
or business prospects of the Company and its subsidiaries considered as one
enterprise or of the Trust, in each case, whether or not arising in the ordinary
course of business, or (ii) if there has occurred any material adverse change in
the financial markets in the United States or any outbreak of hostilities or
escalation thereof or other calamity or crisis the effect of which is such as to
make it, in the judgment of the Representatives, impracticable to market any of
the Securities or to enforce contracts for the sale of any of the Securities, or
(iii) if trading in securities of the Company or the Trust has been suspended by
the Commission or a national securities exchange, or if trading generally on
either the American Stock Exchange or the New York Stock Exchange has been
suspended, or minimum or maximum prices for trading have been fixed, or maximum
ranges for prices for securities have been required, by either of said Exchanges
or by order of the Commission or any other governmental authority, or if a
banking moratorium has been declared by either federal, New York or California
authorities, (iv) if the rating assigned by any nationally recognized
statistical rating organization to the Income PRIDES, the Growth PRIDES, any
other securities of the Company or the Capital Securities shall have been
lowered, or if any such rating organization shall have publicly announced that
it has under surveillance or review its rating of the Income PRIDES, the Growth
PRIDES, any other securities of the Company or the Capital Securities unless
such announcement indicates that such organization is considering an upgrade in
such rating.
(b) If this Agreement is terminated pursuant to this Section, such
termination shall be without liability of any party to any other party except as
provided in Section 4 hereof. Notwithstanding any such termination, the
provisions of Sections 4, 6, 7 and 8 shall remain in effect.
SECTION 10. Default by One of the Underwriters. If one of the
Underwriters shall fail at Closing Time or a Date of Delivery to purchase the
Securities which it is obligated to purchase under this Agreement (the
"Defaulted Securities"), the non-defaulting Underwriter shall have the right,
within 24 hours thereafter, to make arrangements for such non-defaulting
Underwriter or any other underwriters to purchase all, but not less than all, of
the Defaulted Securities in such amounts as may be agreed upon and upon the
terms herein set forth; if, however, the non-defaulting Underwriter shall not
have completed such arrangements within such 24-hour period, then:
(a) if the aggregate number of Defaulted Securities of each type
does not exceed 10% of the aggregate number of Securities of such
type to be purchased on such date, the non-defaulting Underwriter
shall be obligated to purchase all of the Defaulted Securities, or
(b) if the aggregate number of Defaulted Securities of any type
exceeds 10%
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of the aggregate number of Securities of such type to be purchased
on such date, this Agreement or, with respect to any Date of
Delivery which occurs after the Closing Time, the obligation of the
Underwriters to purchase and the Company to sell the Securities to
be purchased and sold on such Date of Delivery, shall terminate
without liability on the part of the non-defaulting Underwriter.
No action taken pursuant to this Section shall relieve any
defaulting Underwriter from liability in respect of its default.
In the event of any such default which does not result in a
termination of this Agreement or, in the case of a Date of Delivery which is
after the Closing Time, which does not result in a termination of the obligation
of the Underwriters to purchase and the Company to sell the relevant Option
Securities, as the case may be, either the non-defaulting Underwriter or the
Company shall have the right to postpone Closing Time or the relevant Date of
Delivery, as the case may be, for a period not exceeding seven days in order to
effect any required changes in the Registration Statement or Prospectus or in
any other documents or arrangements. As used herein, the term "Underwriter"
includes any person substituted for an Underwriter under this Section 10.
SECTION 11. Notices. All notices and other communications hereunder
shall be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the
Underwriters shall be directed to them at Xxxxxxx Xxxxx & Co., Xxxxxxx Lynch,
Pierce, Xxxxxx & Xxxxx Incorporated, World Financial Center, Xxxxx Xxxxx, Xxx
Xxxx, Xxx Xxxx 00000-0000, Attention: Xxxx Xxxxx; and notices to the Offerors
shall be directed to them at 00000 Xxxxxxxx Xxxxxxxxx, Xxx Xxxxxxx, Xxxxxxxxxx
00000, attention of Xxxxxxx X. Xxxx, Senior Vice President and Chief Financial
Officer.
SECTION 12. Parties. This Agreement shall inure to the benefit of
and be binding upon the Underwriters and the Offerors and their respective
successors. Nothing expressed or mentioned in this Agreement is intended or
shall be construed to give any person, firm or corporation, other than the
Underwriters and the Offerors and their respective successors and the
controlling persons and officers, directors and Trustees referred to in Sections
6 and 7 and their heirs and legal representatives, any legal or equitable right,
remedy or claim under or in respect of this Agreement or any provision contained
herein. This Agreement and all conditions and provisions hereof are intended to
be for the sole and exclusive benefit of the Underwriters and the Company and
their respective successors, and said controlling persons and officers,
directors and Trustees and their heirs and legal representatives, and for the
benefit of no other person, firm or corporation. No purchaser of Securities from
any Underwriter shall be deemed to be a successor by reason merely of such
purchase.
SECTION 13. Governing Law and Time. This Agreement shall be governed
by and construed in accordance with the laws of the State of New York applicable
to agreements made and to be performed in said State. Unless otherwise set forth
herein, specified times of day refer to New York City time.
SECTION 14. Effect of Headings. The Article and Section headings
herein are for
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convenience only and shall not affect the construction hereof.
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If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Offerors a counterpart hereof,
whereupon this instrument, along with all counterparts, shall become a binding
agreement among the Company, the Trust and the Underwriters in accordance with
its terms.
Very truly yours,
XXXXXXX AND BROAD HOME CORPORATION
By: /s/ Xxxxxxx X. Xxxx
----------------------------------------------------
Name: Xxxxxxx X. Xxxx
Title: Senior Vice President, Chief Financial
Officer
KBHC FINANCING I
By: /s/ Xxxxxx Xxxxxx
----------------------------------------------------
Name: Xxxxxx Xxxxxx
Title: Trustee
Solely as Trustee and not in his individual capacity
By: /s/ Xxxxxx X. Xxxxxxx
----------------------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Trustee
Solely as Trustee and not in his individual capacity
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CONFIRMED AND ACCEPTED,
as of the date first above written:
XXXXXXX XXXXX & CO.
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX
INCORPORATED
XXXXXXXXX, LUFKIN & XXXXXXXX SECURITIES CORPORATION
By: XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX
INCORPORATED
By: /s/ Xxxxxx X. Xxxxx
-----------------------------------
Authorized Signatory
For themselves and as Representatives of the Underwriters
named in Schedule A hereto.
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Schedule A
Number Number Number
of Income of Growth of Capital
Name of Underwriter PRIDES PRIDES Securities
------------------- ---------- ---------- ----------
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx ............. 7,750,000 500,000 500,000
Incorporated
Xxxxxxxxx, Lufkin & Xxxxxxxx Securities Corporation 7,750,000 500,000 500,000
---------- ---------- ----------
Total ............................................. 15,500,000 1,000,000 1,000,000
========== ========== ==========
Sch A-1
48
Schedule B
1. The initial public offering price per Security shall be (a) in
the case of each Income PRIDES, $10.00, (b) in the case of each Growth PRIDES,
$8.446 and (c) in the case of each Separate Capital Security, $9.931.
2. The purchase price payable by the several Underwriters for the
Initial Securities shall be (a) $10.00 per Income PRIDES, (b) $8.446 per Growth
PRIDES and (c) $10.00 per Separate Capital Security. The aggregate Underwriters'
Compensation payable to the Underwriters by the Company in respect of the
Initial Securities is $4,950,000.
3. The purchase price payable by the several Underwriters for any
Option Securities shall be $10.00 per Option Security plus, in the case of any
Option Security which is purchased by the Underwriters on a Date of Delivery
which is after the Closing Time, accrued and unpaid distributions thereon. The
Underwriters' Compensation payable to the Underwriters by the Company in respect
of any Option Securities purchased by the several Underwriters is $.30 per
Option Security.
4. Contract Adjustment Payments will be payable on the Income PRIDES
and the Growth PRIDES at the rate of .25% per annum and .75% per annum,
respectively, distributions on the Capital Securities shall be payable at the
rate of 8% per annum and the rate of interest on the Debentures shall be 8% per
annum.
Capitalized terms used in this Schedule and not defined have the
respective meanings set forth in the accompanying Underwriting Agreement.
Sch B-1
