<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington D.C.
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): July 2, 1996
The Ryland Group, Inc.
- ----------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Maryland 1-8029 52-0849948
- ------------------ -------------------- --------------
(State or other jurisdiction (Commission File No.) (IRS Employer
of incorporation) Identification
Number)
11000 Broken Land Parkway, Columbia, Maryland 21044
- -------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (410) 715-7000
Not Applicable
- ------------------------------------------------------------------------
(Former name or former address, if changed since last report)
<PAGE>
Item 5. Other events
Annex A
-------
THE RYLAND GROUP, INC.
Debt Securities
Underwriting Agreement Basic Provisions
July 2, 1996
The basic provisions set forth herein are intended to be
incorporated by reference in a terms agreement (a "Terms Agreement") of the
type referred to in Section 2 hereof. With respect to any particular Terms
Agreement, the Terms Agreement, together with the provisions hereof
incorporated therein by reference, is herein referred to as this "Agreement"
and all references herein to the "Terms Agreement" shall refer to each
respective Terms Agreement. Terms defined in the Terms Agreement are used
herein as therein defined. The term "Representative," as used herein, means
the Underwriter or Underwriters (as defined below) named in a Terms Agreement
as Representative or Representatives. If no Underwriter or Underwriters are
named in the Terms Agreement as Representative or Representatives, then the
terms "Underwriters" and "Representatives" as used herein shall mean the
Underwriter (if only one) or all Underwriters (if more than one) listed in
such Terms Agreement.
The Ryland Group, Inc., a Maryland corporation (the "Company"),
may issue and sell from time to time series of its debt securities registered
under the registration statement referred to in Section 1(a) hereof (the
"Securities") to the Underwriters (the "Underwriters") named in the Terms
Agreement relating to any such Securities. The Securities may have varying
designations, denominations, interest rates and payment dates, maturities,
redemption provisions and selling prices, with all such terms for any
particular series of Securities (together with any other terms relating to
such series) to be determined and set forth in the Terms Agreement relating to
the series.
1. The Company represents, warrants and agrees that:
(a) A registration statement on Form S-3 with respect to the
Securities has been prepared by the Company in conformity with the
requirements of the Securities Act of 1933, as amended (the "Act"), and the
rules and regulations (the "Rules and Regulations") of the Securities and
Exchange Commission (the "Commission") thereunder and has become effective.
If any post-effective amendment to such registration statement has been filed
with the Commission prior to the execution and delivery of the Terms
Agreement, the most recent such amendment has been declared effective by the
Commission. Copies of such registration statement as amended as of the date
of the Terms Agreement have been delivered by the Company to the
<PAGE>
Representatives. As used in this Agreement, (i) "Preliminary
Prospectus" means each prospectus (including all documents incorporated
therein by reference) included in such registration statement, or amendments
or supplements thereof, before it became effective under the Act, including
any prospectus filed with the Commission by the Company with the consent of
the Underwriters pursuant to Rule 424(a) of the Rules and Regulations; (ii)
"Registration Statement" means such registration statement, as it became
effective under the Act, and as amended or supplemented as of the date of the
Terms Agreement (including all exhibits thereto and all documents incorporated
therein by reference); (iii) "Basic Prospectus" means the prospectus
(including all documents incorporated therein by reference) included in the
Registration Statement; and (iv) "Prospectus" means the Basic Prospectus,
together with any prospectus amendment or supplement (including in each case
all documents incorporated therein by reference) specifically relating to the
Securities to be purchased by the Underwriters pursuant to the Terms Agreement
("Underwritten Securities"), as filed with, or mailed for filing to, the
Commission pursuant to paragraph (b) of Rule 424 of the Rules and Regulations.
The Company meets the requirements for the use of Form S-3 under the Act, and
as of the date of the Terms Agreement the Commission has not issued any order
preventing or suspending the use of any Prospectus.
(b) The Registration Statement and the Prospectus contain,
and, at all times when a prospectus is required to be delivered in connection
with offers or sales of the Underwritten Securities, will contain, all
statements which are required to be contained therein by the Act, the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), the Trust
Indenture Act of 1939, as amended (the "Trust Indenture Act"), and the rules
and regulations of the Commission under such acts; the indenture, including
any amendments and supplements thereto, pursuant to which the Underwritten
Securities will be issued (the "Indenture") will conform with the requirements
of the Trust Indenture Act and the rules and regulations of the Commission
thereunder; and the Registration Statement and the Prospectus will not contain
any untrue statement of a material fact or omit to state any material fact
required to be stated therein or, with respect to the Prospectus, necessary to
make the statements therein in light of the circumstances under which they
were made, not misleading; provided, however, that the Company makes no
representation or warranty as to information contained or omitted from the
Registration Statement or the Prospectus in reliance upon and in conformity
with written information furnished to the Company through any Underwriter
specifically for inclusion therein. The foregoing representations, warranties
and Agreements shall not apply to that part of the Registration Statement
which shall constitute the Statement of Eligibility and Qualification under
the Trust Indenture Act (Form T-1) of the Trustee under the Indenture. The
Indenture has been qualified under the Trust Indenture Act.
<PAGE>
(c) Neither the Company nor any of its subsidiaries (as
defined in Rule 405) is in violation of its corporate charter or by-laws or in
default under any agreement, indenture or instrument, the effect of which
violation or default would be material to the Company and its subsidiaries
taken as a whole; the execution, delivery and performance of the Terms
Agreement (including the provisions of this "Underwriting Agreement Basic
Provisions"), the consummation of the transactions contemplated hereby and
compliance by the Company with the provisions of the Underwritten Securities
and the Indenture will not conflict with, result in the creation or imposition
of any lien, charge or encumbrance upon any of the assets of the Company or
any of its subsidiaries pursuant to the terms of, or result in a breach of any
of the terms of or constitute a default under, any loan agreement, indenture,
mortgage, deed of trust, other agreement or instrument to which the Company or
any of its subsidiaries is a party or by which the Company or any of its
subsidiaries is bound or to which any of the property or assets of the Company
or any of its subsidiaries is subject, nor will such actions result in a
violation of the corporate charter or by-laws of the Company or any of its
subsidiaries or any statute or any applicable order, rule or regulation of any
court, regulatory body, administrative agency or governmental agency or
authority having jurisdiction over the Company, any of its subsidiaries or
their respective properties; and except as required by the Act, the Trust
Indenture Act, the Exchange Act and applicable state securities laws, no
consent, authorization or order of, or filing or registration with, any court,
regulatory body, administrative agency or governmental agency or authority is
required for the execution, delivery and performance of this Agreement and the
Indenture by the Company and the consummation of the transactions contemplated
hereby.
(d) Except as contemplated in the Registration Statement and
the Prospectus, subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus, neither the Company
nor any of its subsidiaries has incurred any liabilities or obligations,
direct or contingent, or entered into any transactions, not in the ordinary
course of business, that are material to the Company and its subsidiaries,
taken as a whole, and there has not been any material change, on a
consolidated basis, in the capital stock, short-term debt or long-term debt
of the Company and its subsidiaries, or any material adverse change in the net
worth, financial condition or results of operation of the Company and its
subsidiaries, taken as a whole.
<PAGE>
(e) Ernst & Young, whose report appears in the Company's most
recent Annual Report on Form 10-K which is incorporated by reference in the
Prospectus, are independent public accountants as required by the Act and the
Rules and Regulations.
(f) The audited financial statements included or incorporated
by reference in the Registration Statement or in any Preliminary Prospectus or
the Prospectus present fairly the financial condition and results of
operations of the entities to be shown thereby, at the dates and for the
periods indicated, and have been prepared in conformity with generally
accepted accounting principles applied on a consistent basis throughout the
periods involved; and the supporting schedules included or incorporated by
reference in the Registration Statement present fairly the information
required to be stated therein. The unaudited financial statements of the
Company included or incorporated by reference in the Prospectus and the
Registration Statement and the related notes, present fairly, in all material
respects, the financial position of the Company and its subsidiaries and, to
the extent applicable are prepared in accordance with the instructions to Form
10-Q.
(g) On the Delivery Date (as defined in Section 4 hereof) (i)
the Indenture will have been validly authorized, executed and delivered by the
Company and will constitute the legally binding obligation of the Company,
enforceable in accordance with its terms; (ii) the Underwritten Securities
will have been validly authorized for issuance, and, upon execution,
authentication, delivery and payment therefor as provided in this Agreement
and the Indenture, will be validly issued and outstanding, and will constitute
valid and legally binding obligations of the Company entitled to the benefits
of the Indenture; (iii) the Underwritten Securities and the Indenture will
conform to the descriptions thereof contained in the Prospectus.
(h) The Company and each of its subsidiaries have been duly
incorporated, are validly existing and in good standing under the laws of
their respective jurisdictions of incorporation, are duly qualified to do
business and in good standing as foreign corporations in each jurisdiction in
which their respective ownership of property or the conduct of their
respective businesses requires such qualifications (except where the failure
to so qualify would not have a material adverse effect upon the Company and
its subsidiaries taken as a whole).
<PAGE>
(i) The Company and each of its subsidiaries have all
requisite power and authority and all necessary material authorizations,
approvals, orders, licenses, certificates and permits of and from all
regulatory or governmental officials, bodies and tribunals, to own or lease
their respective properties and to conduct their respective businesses as now
being conducted and as described in the Prospectus; and all such
authorizations, approvals, licenses, certificates and permits are in full
force and effect, and the Company and each of its subsidiaries are in all
material respects complying therewith.
(j) Except as contemplated in the Registration Statement and
the Prospectus, there is not pending or, to the knowledge of the Company,
threatened any action, suit or proceeding to which the Company or any of its
subsidiaries is a party, before or by any court, regulatory body,
administrative agency or governmental agency or authority that is reasonably
likely to result in any material adverse change in the net worth, financial
condition or results of operation of the Company and its subsidiaries taken as
a whole, or is reasonably likely to materially adversely affect the properties
or assets of the Company and its subsidiaries taken as a whole.
(k) The documents incorporated by reference in the
Registration Statement, the Prospectus, any amendment or supplement thereto or
any Preliminary Prospectus, when they became or become effective under the Act
or were or are filed with the Commission under the Exchange Act, as the case
may be, conformed or will conform in all material respects with the
requirements of the Act or the Exchange Act, as applicable, and the rules and
regulations of the Commission thereunder.
(l) There are no contracts or other documents which are
required to be filed as exhibits to the Registration Statement by the Act or
by the Rules and Regulations, or which were required to be filed as exhibits
to any document incorporated by reference in the Prospectus by the Exchange
Act or the rules and regulations of the Commission thereunder, which have not
been filed as exhibits to the Registration Statement or to such document or
incorporated therein by reference as permitted by the Rules and Regulations or
the rules and regulations of the Commission under the Exchange Act, as the
case may be.
(m) The Terms Agreement (including the provisions of this
"Underwriting Agreement Basic Provisions") has been duly authorized, executed
and delivered by the Company and the Company has full corporate power and
authority to execute, deliver and perform the Terms Agreement (including the
provisions of this "Underwriting Agreement Basic Provisions").
<PAGE>
(n) There are no holders of securities of the Company who, by
reason of the filing of the Registration Statement under the Act or the
execution by the Company of this Agreement, have the right to request or
demand that the Company register under the Act securities held by them.
(o) No stop order suspending the effectiveness of the
Registration Statement has been issued, and to the knowledge of the Company no
proceeding for that purpose has been instituted or threatened by the
Commission.
2. The obligation of the Underwriters to purchase, and the
Company to sell, the Underwritten Securities is evidenced by a Terms Agreement
delivered at the time the Company determines to sell the Underwritten
Securities. The obligations of the Underwriters to purchase the Underwritten
Securities will be several and not joint. The Terms Agreement specifies the
firm or firms which will be Underwriters, the principal amount of the
Underwritten Securities to be purchased by each Underwriter, the purchase
price to be paid by the Underwriters for the Underwritten Securities, the
public offering price of the Underwritten Securities, the firm, if any, which
will serve as a "qualified independent underwriter" within the meaning of
Section 2(o) of Schedule E to the By-laws of the National Association of
Securities Dealers, Inc. (in such capacity and not otherwise the "QIU") with
respect to the offering of the Underwritten Securities and the amount of the
underwriting discount to be received by such firm which shall be deemed
compensation for its services as QIU and certain terms of the Underwritten
Securities not already specified in the Indenture (including, without
limitation, designations, denominations, interest rates and payment dates,
maturity, redemption provisions and sinking fund requirements). The Terms
Agreement specifies any details of the terms of the offering which should be
reflected in a post-effective amendment to the Registration Statement or the
supplement to the Prospectus relating to the offering of the Underwritten
Securities.
3. The Company shall not be obligated to deliver any Underwritten
Securities except upon payment for all Underwritten Securities to be purchased
pursuant to this Agreement as hereinafter provided.
<PAGE>
If any Underwriter defaults in the performance of its obligations
under this Agreement, the remaining non-defaulting Underwriters shall be
obligated to purchase the Underwritten Securities which the defaulting
Underwriter agreed but failed to purchase in the respective proportions which
the principal amount of Underwritten Securities set forth in the Terms
Agreement to be purchased by each remaining non-defaulting Underwriter bears
to the aggregate principal amount of Underwritten Securities set forth in such
Terms Agreement for all the remaining non-defaulting Underwriters; provided,
however, that the remaining non-defaulting Underwriters shall not be obligated
to purchase any Underwritten Securities if the aggregate principal amount of
Underwritten Securities which the defaulting Underwriter or Underwriters
agreed but failed to purchase exceeds 9.99% of the total principal amount of
Underwritten Securities, and any remaining non-defaulting Underwriter shall
not be obligated to purchase more than 110% of the principal amount of
Underwritten Securities set forth in the Terms Agreement to be purchased by
it. If the foregoing maximums are exceeded, the remaining non-defaulting
Underwriters, or those other underwriters satisfactory to the Underwriters who
so agree, shall have the right, but shall not be obligated, to purchase, in
such proportion as may be agreed upon among them, all the Underwritten
Securities. If the remaining Underwriters or other underwriters satisfactory
to the remaining Underwriters do not elect to purchase the Underwritten
Securities which the defaulting Underwriter or Underwriters agreed but failed
to purchase, this Agreement shall terminate without liability on the part of
any non-defaulting Underwriter or the Company, except that the Company will
continue to be liable for the payment of the expenses as set forth in Section
5(j) and with respect to any non-defaulting Underwriter as set forth in
Section 6 and shall not continue to be liable for the payment of expenses of
any defaulting Underwriter as set forth in Section 6.
Nothing contained in this Agreement shall relieve any defaulting
Underwriter of its liability, if any, it may have to the Company and any non-
defaulting Underwriter for damages caused by its default. If other
Underwriters agree to purchase the Underwritten Securities of a defaulting
Underwriter, either the remaining non-defaulting Underwriters or the Company
may postpone the Delivery Date for up to seven full business days in order to
effect any changes that in the opinion of counsel for the Company or counsel
for the Underwriters may be necessary in the Registration Statement, any
Prospectus or in any other document or arrangement.
4. Delivery of and payment for Underwritten Securities shall be
made at the office of Dillon, Read & Co. Inc., 535 Madison Avenue, New York,
New York 10022, at 10:00 A.M., New York City time, on the third business day
following the date of the Terms Agreement or at such other location, time and
date as shall be agreed upon between the Underwriters and the Company. This
<PAGE>
date and time are sometimes referred to as the "Delivery Date." On the
Delivery Date, the Company shall deliver the Underwritten Securities to the
Underwriters against payment to or upon the order of the Company of the
purchase price payable in immediately available funds. Time shall be of the
essence, and delivery at the time and place specified pursuant to this
Agreement is a further condition of the obligation of each Underwriter
hereunder. The Underwritten Securities shall be prepared in definitive fully
registered form in such denominations, and registered in such names as the
Underwriters shall request in writing not less than two full business days
prior to the Delivery Date. The Company shall make the Underwritten
Securities available for inspection by the Underwriters in New York, New York
not later than 1:00 P.M., New York City time, on the business day prior to the
Delivery Date.
5. The Company agrees:
(a) To furnish promptly to the Representatives and to counsel
for the Underwriters a signed copy of the Registration Statement as originally
filed and each amendment or supplement thereto filed with the Commission,
including all documents incorporated therein by reference and all consents and
exhibits filed therewith.
(b) To deliver promptly to the Underwriters such number of
the following documents as the Underwriters may request during the period
referred to in (c) below: (i) conformed copies of the Registration Statement
(excluding exhibits other than the computation of the ratio of earnings to
fixed charges, the Indenture and these "Underwriting Agreement Basic
Provisions", (ii) the Prospectus and (iii) any documents incorporated by
reference in the Prospectus.
(c) To timely file with the Commission during such period
following the date of each Terms Agreement as a prospectus is required to be
delivered in connection with offers or sales of Underwritten Securities any
amendment or supplement to the Registration Statement or the Prospectus that
may, in the reasonable judgment of the Company or the Underwriters, be
required by the Act or requested by the Commission and approved by the
Underwriters.
(d) Prior to filing with the Commission during the period
referred to in (c) above (i) any amendment or supplement to the Registration
Statement, (ii) the Prospectus or any amendment or supplement thereto or (iii)
any document incorporated by reference in any of the foregoing or any
amendment or supplement to any such incorporated document, to furnish a copy
thereof to the Underwriters and to counsel for the Underwriters and obtain the
consent of the Underwriters to the filing (which consent shall not be
unreasonably withheld; provided, however, with respect to any filing that is
required to be made under the Exchange Act, prior consent of the Underwriters
to such filing will not be required hereunder if it would be impracticable to
obtain such consent prior to the time such filing is required to be made).
<PAGE>
(e) To advise the Underwriters promptly (i) when any post-
effective amendment to the Registration Statement relating to or covering the
Underwritten Securities becomes effective, (ii) of any request or proposed
request by the Commission for an amendment or supplement to the Registration
Statement (to the extent that the amendment or supplement relates to or covers
the Underwritten Securities), to the Prospectus, to any document incorporated
by reference in any of the foregoing or for any additional information, (iii)
of the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or any order directed to the
Prospectus or any document incorporated therein by reference or the initiation
or threat of any stop order proceeding or of any challenge to the accuracy or
adequacy of any document incorporated by reference in the Prospectus, and (iv)
of receipt by the Company of any notification with respect to the suspension
of the qualification (or exemption from qualification) of the Underwritten
Securities for sale in any jurisdiction or the initiation or threat of any
proceeding for that purpose.
(f) If, during the period referred to in (c) above, the
Commission shall issue a stop order suspending the effectiveness of the
Registration Statement, to use its best efforts to obtain as soon as possible
the withdrawal of that order at the earliest possible time.
(g) As soon as practicable after the date of each Terms
Agreement (it being understood that the Company shall have until at least 410
days after the end of the Company's current fiscal quarter), to make generally
available to its security holders and to deliver to the Underwriters an
earnings statement of the Company and its subsidiaries (which need not be
audited) complying with Section 11(a) of the Act and the Rules and Regulations
(including, at the option of the Company, Rule 158).
(h) During the period of three years after the date of any
Terms Agreement, the Company will furnish to the Representatives and, upon
request, to each of the other Underwriters, if any, as soon as practicable
after the end of each fiscal year, a copy of its annual report to stockholders
for such year; and the Company will furnish to the Representatives (i) as soon
as available, a copy of each report or definitive proxy statement of the
Company filed with the Commission under the Exchange Act or mailed to
stockholders, and (ii) from time to time, such other information concerning
the Company as the Representatives may reasonably request pursuant to the
Exchange Act or any rule or regulation of the Commission thereunder.
<PAGE>
(i) To promptly arrange, in cooperation with the
Underwriters, for the qualification, or exemption from qualification, of the
Underwritten Securities for sale under the laws of such jurisdictions as the
Underwriters may designate and will maintain such qualifications in effect so
long as required for the distribution of the Underwritten Securities and will
pay all fees and expenses (including reasonable counsel fees and expenses)
relating to the qualification of the Underwritten Securities under the
securities pursuant to this Section 5(i); provided that in connection
therewith the Company shall not be required to qualify as a foreign
corporation or to file a general consent to service of process in any
jurisdiction.
(j) To pay the costs incident to the authorization, issuance,
sale and delivery of the Underwritten Securities and any taxes payable in that
connection; the costs incident to the preparation, printing and filing under
the Act of the Registration Statement and any amendments, supplements and
exhibits thereto; the costs incident to the preparation, printing and filing
of any document and any amendments and exhibits thereto required to be filed
by the Company under the Exchange Act; the costs of distributing the
Registration Statement as originally filed and each amendment and post-
effective amendment thereof (including exhibits), any Preliminary Prospectus,
the Prospectus and any documents incorporated by reference in any of the
foregoing documents; the costs of printing this Agreement; the costs of any
filings with the National Association of Securities Dealers, Inc.; fees paid
to rating agencies in connection with the rating of the Underwritten
Securities; the fees and expenses of qualifying the Underwritten Securities
under the securities laws of the several jurisdictions as provided in this
Section and of preparing and printing a Blue Sky Memorandum, and a memorandum
concerning the legality of the Underwritten Securities as an investment
(including reasonable fees of counsel to the Underwriters payable with respect
thereto); and all other costs and expenses incident to the performance of the
Company's obligations under this Agreement; provided that, except as provided
in this Section and in Section 6 and Section 10 hereof, the Underwriters shall
pay their own costs and expenses, including the fees and expenses of their
counsel, any transfer taxes on the Underwritten Securities which they may sell
and the expenses of advertising any offering of the Underwritten Securities
made by the Underwriters.
<PAGE>
(k) Subject to Section 5(d) hereof, until the termination of
the offering of the Underwritten Securities, to timely file all documents, and
any amendments to previously filed documents, required to be filed by the
Company pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act.
(l) If at any time when a prospectus relating to the
Underwritten Securities is required to be delivered under the Act, any event
relating to or affecting the Company or any of its subsidiaries occurs as a
result of which the Prospectus or any other prospectus as then in effect would
include an untrue statement of a material fact, or omit to state any material
fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or if it is
necessary, at any time to amend the Prospectus to comply with the Act, the
Company will promptly notify the Representatives thereof and will prepare an
amended or supplemental prospectus (in form and substance reasonably
satisfactory to counsel to the Underwriters) or, with the consent of counsel
to the Underwriters (which shall not be unreasonably withheld), make an
appropriate filing pursuant to Section 13 or 14 of the Exchange Act which will
correct such statement or omission; and, in case the Underwriters are required
to deliver a prospectus relating to the Underwritten Securities nine months or
more after the effective date of the Registration Statement, the Company upon
the request of the Representatives and at the expense of the Underwriters will
prepare promptly such prospectus or prospectuses as may be necessary to permit
compliance with the requirements of Section 10(a)(3) of the Act.
(m) During the period beginning on the date of the Term Agreement
and continuing to the Delivery Date, not to publicly offer, sell, contract to
sell or otherwise dispose of any debt securities of the Company with
maturities longer than one year, other than the Underwritten Securities to the
Underwriters.
<PAGE>
6. (a) The Company shall indemnify and hold harmless each
Underwriter against any losses, claims, damages or liabilities, joint or
several, to which that Underwriter may become subject, under the Act, the
Exchange Act, or other Federal or state statutory law or regulation, at common
law or otherwise, insofar as such losses, claims, damages, liabilities (or
actions in respect thereof) arise out of, or are based upon, any untrue
statement or alleged untrue statement of a material fact contained in any
Preliminary Prospectus, the Registration Statement or the Prospectus, or arise
out of, or are based upon, the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the
statements therein not misleading, and shall reimburse each Underwriter for
any legal and other expenses reasonably incurred by it in connection with
investigating or defending against such loss, claim, damage, liability or
action as such expenses are incurred; provided, however, that (i) the Company
shall not be liable in any such case to the extent that any such loss, claim,
damage or liability arises out of, or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission made in any
Preliminary Prospectus, the Registration Statement or the Prospectus in
reliance upon and in conformity with written information furnished to the
Company through any Underwriter specifically for use in the preparation
thereof, and (ii) such indemnity with respect to any Preliminary Prospectus
shall not inure to the benefit of any Underwriter (or any person controlling
such Underwriter) from whom the person asserting any loss, claim, damage,
liability purchased the Underwritten Securities which are the subject thereof
if such person did not receive a copy of the Prospectus, as the same may be
amended or supplemented, excluding documents incorporated by reference at or
prior to the confirmation of the sale of such Underwritten Securities to such
person in any case where such delivery is required by the Act, and the untrue
statement or omission of a material fact contained in such Preliminary
Prospectus was corrected in the Prospectus (or the Prospectus as
supplemented), unless such failure resulted from non-compliance by the Company
with Section 5(b). This indemnity agreement is in addition to any liability
which the Company may otherwise have to any Underwriter.
(b) Each Underwriter shall indemnify and hold harmless the
Company against any losses, claims, damages or liabilities, joint or several,
to which the Company may become subject, under the Act, the Exchange Act, or
other Federal or state statutory law or regulation, at common law or
otherwise, insofar as such losses, claims, damages, liabilities (or actions in
respect thereof), arise out of, or are based upon, any untrue statement or
alleged untrue statement of a material fact contained in any Preliminary
Prospectus, the Registration Statement or the Prospectus, or arise out of, or
are based upon, the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein
not misleading, in each case to the extent, but only to the extent, that such
untrue statement or alleged untrue statement or omission or alleged omission
was made in reliance upon and in conformity with written information furnished
to the Company by that Underwriter specifically for use in the preparation
thereof; and shall reimburse the Company for any legal and other expenses
reasonably incurred by the Company in connection with investigating or
defending any such loss, claim, damage, liability or action as such expenses
are incurred.
<PAGE>
(c) Promptly after receipt by an indemnified party under
subsection (a) or (b) above of notice of the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made against
the indemnifying party under such subsection, notify the indemnifying party in
writing of the commencement thereof; but the omission so to notify the
indemnifying party shall not relieve it from any liability that it may have to
any indemnified party otherwise than under such subsection. In case any such
action shall be brought against an indemnified party, and it shall notify the
indemnifying party of the commencement thereof, the indemnifying party shall
be entitled to participate in, and, to the extent that it shall wish, jointly
with any other indemnifying party similarly notified, to assume the defense
thereof, with counsel satisfactory to such indemnified party (who shall not,
except with the consent of the indemnified party, be counsel to the
indemnifying party), and after notice from the indemnifying party to the
indemnified party of its election to assume the defense thereof, the
indemnifying party shall not be liable to the indemnified party under such
subsection for any legal or other expenses subsequently incurred by the
indemnified party in connection with the defense thereof other than reasonable
costs of investigation; provided, however, that if the defendants in any such
action include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that there may be legal
defenses available to it and/or other indemnified parties which are different
from or additional to those available to the indemnifying party, the
indemnified party or parties shall have the right to select separate counsel
to defend such action on behalf of such indemnified party or parties. Upon
receipt of notice from the indemnifying party to such indemnified party of its
election so to appoint counsel to defend such action and approval by the
indemnified party of such counsel, the indemnifying party will not be liable
to such indemnified party under this Section 6 for any legal or other expenses
subsequently incurred by such indemnified party in connection with the defense
thereof unless (i) the indemnified party shall have employed separate counsel
in accordance with the proviso to the next preceding sentence (it being
understood, however, that the indemnifying party shall not be liable for the
expenses of more than one separate counsel (plus any local counsel), approved
by the Underwriters in the case of paragraph (a) of this Section 6,
representing the indemnified parties under such paragraph (a) who are parties
to such action), (ii) the indemnifying party shall not have employed counsel
satisfactory to the indemnified party to represent the indemnified party
within a reasonable time after notice of commencement of the action or (iii)
the indemnifying party has authorized the employment of counsel for the
indemnified party at the expense of the indemnifying party; and except that,
if clause (i) or (iii) is applicable, such liability shall be only in respect
of the counsel referred to in such clause (i) or (iii).
<PAGE>
(d) If the indemnification provided in this Section 6 shall
be unavailable or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above then each indemnifying party shall contribute to
the amount paid or payable by such indemnified party as a result of the
losses, claims, damages, or liabilities, referred to in subsection (a) or (b)
above, (i) in such proportion as shall be appropriate to reflect the relative
benefits received by the Company on the one hand and the Underwriters on the
other from the offering of the Underwritten Securities or (ii) if the
allocation provided by the clause (i) above is not permitted by applicable
law, in such proportion as is appropriate to reflect not only the relative
benefits referred to in clause (i) above but also the relative fault of the
Company on the one hand and the Underwriters on the other with respect to the
statements or omissions that resulted in such losses, claims, damages or
liabilities, as well as any other relevant equitable considerations. The
relative benefits received by the Company on the one hand and the Underwriters
on the other shall be deemed to be in the proportion as the total net proceeds
from the offering of the Underwritten Securities (before deducting expenses)
received by the Company bear to the total underwriting discounts and
commissions received by the Underwriters, in each case as set forth in the
table on the cover page of the Prospectus. The relative fault shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or omission or alleged omission to state a
material fact relates to information supplied by the Company on the one hand
or the Underwriters on the other and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission. The Company and the Underwriters agree that it would not be just
and equitable if contributions pursuant to this subsection (d) were to be
determined by pro rata allocation (even if the Underwriters were treated as
one entity for such purpose) or by any other method of allocation which does
not take into account the equitable considerations referred to in the first
sentence of this subsection (d). The amount paid by an indemnified party as a
result of the losses, claims, damages or liabilities referred to in the first
sentence of this subsection (d) shall be deemed to include, any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim that is subject to this
subsection (d). Notwithstanding the provisions of this subsection (d), no
Underwriter shall be required to contribute any amount in excess of the amount
by which the total price at which the Underwritten Securities underwritten by
it and distributed to the public were offered to the public exceeds the amount
of any damages that such Underwriter has otherwise been required to pay by
reason of any untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. The
Underwriters' obligations to contribute as provided in this subsection (d) are
several in proportion to their respective underwriting obligations and not
joint.
<PAGE>
(e) The obligations of the Company under this Section 6 shall
be in addition to any liability that the Company may otherwise have and shall
extend, upon the same terms and conditions, to each person, if any, who
controls any Underwriter within the meaning of either the Act or the Exchange
Act; and the obligations of the Underwriters under this Section 6 shall be in
addition to any liability that the respective Underwriters may otherwise have
and shall extend, upon the same terms and conditions, to each director of the
Company (including any person who, with his consent, is named in the
Registration Statement as about to become a director of the Company), to each
officer of the Company who has signed the Registration Statement and to each
person, if any, who controls the Company within the meaning of either the Act
or the Exchange Act. For purposes of this Section 6, each person who controls
an Underwriter within the meaning of either the Act or the Exchange Act shall
have the same rights to contribution as such Underwriter, and each person who
controls the Company within the meaning of either the Act or the Exchange Act,
each director of the Company (including any person who, with his consent, is
named in the Registration Statement as about to become a director of the
Company), each officer of the Company who has signed the Registration
Statement shall have the same rights to contribution as the Company, subject
to the limitations set forth in subsection (d) of this Section 6. Any party
entitled to contribution will, promptly after receipt of notice of
commencement of any action, suit or proceeding against such party in respect
of which a claim for contribution may be made against another party or parties
under subsection (d) of this Section 6, notify such party or parties from whom
contribution may be sought, but the omission to so notify such party or
parties shall not relieve the party or parties from whom contribution may be
sought from any other obligation it or they may have hereunder or otherwise
than under this subsection (e).
(f) The indemnity agreements contained in this Section and in
Section 7 and the representations, warranties and agreements of the Company in
Section 1 and Section 5 hereof shall survive the delivery of the Underwritten
Securities and shall remain in full force and effect, regardless of any
termination or cancellation of this Agreement or any investigation made by or
on behalf of any indemnified party.
<PAGE>
7. (a) The Company shall indemnify and hold harmless the firm,
if any, acting as QIU against any losses, claims, damages or liabilities,
joint or several, to which the QIU may become subject in its capacity as QIU,
under the Act, the Exchange Act, or other Federal or state statutory law or
regulation, at common law or otherwise, insofar as such losses, claims,
damages, liabilities (or actions in respect thereof) arise out of, or are
based upon, any untrue statement or alleged untrue statement of a material
fact contained in any Preliminary Prospectus, the Registration Statement or
the Prospectus, or arise out of, or are based upon, the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, and shall reimburse
the QIU for any legal and other expenses reasonably incurred by it in
connection with investigating or defending against such loss, claim, damage,
liability or action as such expenses are incurred; provided, however, that
such firm, in its capacity as QIU, shall not be entitled to indemnification
pursuant to this Section 7 in respect of any losses, claims, damages or
liabilities to the extent and only to the extent that it would be denied
indemnification in its capacity as an Underwriter pursuant to Section 6 hereof
in respect of such losses, claims, damages or liabilities. This indemnity
agreement is in addition to any liability which the Company may otherwise
have.
(b) Promptly after receipt by the QIU under subsection (a)
above of notice of the commencement of any action, the QIU shall, if a claim
in respect thereof is to be made against the indemnifying party under such
subsection, notify the indemnifying party in writing of the commencement
thereof; but the omission so to notify the indemnifying party shall not
relieve it from any liability that it may have to the QIU otherwise than under
such subsection. In case any such action shall be brought against the QIU,
and it shall notify the indemnifying party of the commencement thereof, the
indemnifying party shall be entitled to participate in, and, to the extent
that it shall wish, jointly with any other indemnifying party similarly
notified, to assume the defense thereof, with counsel satisfactory to the QIU
(who shall not, except with the consent of the QIU, be counsel to the
indemnifying party), and after notice from the indemnifying party to the QIU
of its election to assume the defense thereof, the indemnifying party shall
not be liable to the QIU under such subsection for any legal or other expenses
subsequently incurred by the QIU in connection with the defense thereof other
than reasonable costs of investigation; provided, however, that if the
defendants in any such action include both the QIU and the indemnifying party
and the QIU shall have reasonably concluded that there may be legal defenses
available to it and/or other indemnified parties which are different from or
additional to those available to the indemnifying party, the QIU shall have
<PAGE>
the right to select separate counsel to defend such action on behalf of
itself; provided, further, that the QIU shall not have such right to select
separate counsel if any Underwriter or Underwriters shall have exercised their
right set forth in the proviso in Section 6(c) to select separate counsel in
respect of such action, in which case, such counsel shall represent the QIU as
well. Upon receipt of notice from the indemnifying party to the QIU of its
election so to appoint counsel to defend such action and approval by the QIU
of such counsel, the indemnifying party will not be liable to the QIU under
this Section 7 for any legal or other expenses subsequently incurred by the
QIU in connection with the defense thereof unless (i) the QIU shall have
employed separate counsel in accordance with the proviso to the next preceding
sentence (it being understood, however, that the indemnifying party shall not
be liable for the expenses of more than one separate counsel (plus any local
counsel), approved by the QIU in the case of paragraph (a) of this Section 7,
representing the QIU under such paragraph (a)), (ii) the indemnifying party
shall not have employed counsel satisfactory to the QIU to represent the QIU
within a reasonable time after notice of commencement of the action or (iii)
the indemnifying party has authorized the employment of counsel for the QIU at
the expense of the indemnifying party; and except that, if clause (i) or (iii)
is applicable, such liability shall be only in respect of the counsel referred
to in such clause (i) or (iii).
(c) If the indemnification provided in this Section 7 shall
be unavailable or insufficient to hold harmless the QIU under subsection (a)
above then the indemnifying party shall contribute to the amount paid or
payable by the QIU in its capacity as QIU as a result of the losses, claims,
damages or liabilities, referred to in subsection (a) above, (i) in such
proportion as shall be appropriate to reflect the relative benefits received
by the Company on the one hand and the QIU on the other from the offering of
the Underwritten Securities or (ii) if the allocation provided by the clause
(i) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause
(i) above but also the relative fault of the Company on the one hand and the
QIU on the other with respect to the statements or omissions that resulted in
such losses, claims, damages or liabilities, as well as any other relevant
<PAGE>
equitable considerations. The relative benefits received by the Company on
the one hand and the QIU on the other shall be deemed to be in the proportion
as the total net proceeds from the offering of the Underwritten Securities
(before deducting expenses) received by the Company as set forth in the table
on the cover page of the Prospectus bear to the portion of the underwriting
discount received by the QIU which is deemed to be compensation for its
services as QIU as set forth in the applicable Terms Agreement. The relative
fault shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or omission or alleged
omission to state a material fact relates to information supplied by the
Company on the one hand or the QIU on the other and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission. The Company and the QIU agree that it would not
be just and equitable if contributions pursuant to this subsection (c) were to
be determined by pro rata allocation or by any other method of allocation
which does not take into account the equitable considerations referred to in
the first sentence of this subsection (c). The amount paid by the QIU as a
result of the losses, claims, damages or liabilities referred to in the first
sentence of this subsection (c) shall be deemed to include, any legal or other
expenses reasonably incurred by the QIU in connection with investigating or
defending any such action or claim that is subject to this subsection (c). No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation.
(d) The obligations of the Company under this Section 7 shall
be in addition to any liability that the Company may otherwise have and shall
extend, upon the same terms and conditions, to each person, if any, who
controls the QIU within the meaning of either the Act or the Exchange Act.
For purposes of this Section 7, each person who controls the QIU within the
meaning of either the Act or the Exchange Act shall have the same rights to
contribution as the QIU. Any party entitled to contribution will, promptly
after receipt of notice of commencement of any action, suit or proceeding
against such party in respect of which a claim for contribution may be made
against another party or parties under subsection (c) of this Section 7,
notify such party or parties from whom contribution may be sought, but the
omission to so notify such party or parties shall not relieve the party or
parties from whom contribution may be sought from any other obligation it or
they may have hereunder or otherwise than under this subsection (d).
8. The obligations of the Underwriters under this Agreement may
be terminated by the Underwriters by giving notice as hereinafter specified at
any time prior to the Delivery Date, if (i) any change, or any development
involving a prospective change, in or affecting the general affairs,
management, financial position, stockholders' equity or results of operations
of the Company and its subsidiaries, otherwise than as set forth or
contemplated in the Prospectus, the effect of which is, in the judgment of the
Representatives, so material and adverse as to make it impracticable or
inadvisable to proceed with the public offering or the delivery of the
Securities being delivered in connection therewith on the terms and in the
manner contemplated in the Prospectus, (ii) the Company shall have failed,
refused or been unable, at or prior to the Delivery Date, to perform any
<PAGE>
agreement on its part to be performed hereunder, (iii) any other condition of
the Underwriter's obligations hereunder is not fulfilled, (iv) trading on the
New York Stock Exchange or the American Stock Exchange shall have been wholly
suspended, (v) minimum or maximum prices for trading shall have been fixed, or
maximum ranges for prices for securities shall have been required, on the New
York Stock Exchange or the American Stock Exchange, by such Exchange or by or
of the Commission or any other governmental authority having jurisdiction,
(vi) a banking moratorium shall have been declared by Federal, Maryland or New
York authorities, (vii) a downgrading shall have occurred in the rating
accorded the Company's debt securities by any "nationally recognized
statistical rating organization", as that term is defined by the Commission
for purposes of Rule 436(g)(2) and such organization shall have publicly
announced that it has under surveillance or review, with possible negative
implications, its rating of any of the Company's debt securities, (viii) the
United States shall have become engaged in hostilities or there shall have
been a declaration of a national emergency or war by the United States or (ix)
there shall have occurred such a material adverse change in general economic,
political or financial conditions (or the effect of international conditions
on the financial markets in the United States shall be such) as to make it, in
the judgment of the Underwriters, inadvisable or impractical to proceed with
the delivery of the Underwritten Securities. Any such termination shall be
without liability of any party to any other party with respect to Underwritten
Securities not purchased by reason of such termination except that the
provisions of Sections 6 and 7 hereof shall at all times be effective. If the
Underwriters elect to terminate this Agreement as provided in this Section,
the Company shall be notified promptly by the Underwriters by telephone, telex
or telecopy, confirmed by letter.
9. The respective obligations of the Underwriters under this
Agreement with respect to the Underwritten Securities are subject to the
accuracy in all material respects, on the date of the Terms Agreement and on
the Delivery Date, of the representations and warranties of the Company
contained herein, to performance by the Company of its obligations hereunder,
and to each of the following additional terms and conditions:
(a) At or before the Delivery Date, no stop order suspending
the effectiveness of the Registration Statement nor any similar order directed
to any document incorporated by reference in the Prospectus shall have been
issued and prior to that time no stop order proceeding shall have been
initiated or threatened by the Commission and no challenge shall have been
made to the accuracy or adequacy of any document incorporated by reference in
the Prospectus; any request of the Commission for inclusion of additional
information in the Registration Statement or the Prospectus or otherwise shall
have been complied with; and the Company shall not have filed with the
Commission any amendment or supplement to the Registration Statement or the
Prospectus (or any document incorporated by reference therein) without the
consent of the Underwriters (which consent shall not be unreasonably
withheld).
<PAGE>
(b) No Underwriter shall have discovered and disclosed to the
Company on or prior to the Delivery Date that the Registration Statement or
the Prospectus contains an untrue statement of fact which, in the opinion of
Simpson Thacher & Bartlett, counsel for the Underwriters, is material or omits
to state a fact which, in the opinion of such counsel, is material and is
required to be stated therein or is necessary to make the statements therein
not materially misleading.
(c) All corporate proceedings and other legal matters
incident to the authorization, form and validity of this Agreement, the
Underwritten Securities and the Indenture and the form of the Registration
Statement, the Prospectus (other than financial statements and other financial
data) and all other legal matters relating to this Agreement and the
transactions contemplated hereby shall be satisfactory in all material
respects to Simpson Thacher & Bartlett, counsel for the Underwriters, and the
Company shall have furnished to such counsel all documents and information
that they may reasonably request to enable them to pass upon such matters.
(d) The Company shall have furnished to the Underwriters the
opinion of David Lesser, Esq., Executive Vice President and General Counsel of
the Company addressed to the Underwriters and dated the Delivery Date in form
and substance satisfactory to the Underwriters and their counsel, to the
effect that:
(i) Each of the Company and its significant
subsidiaries (as defined in Rule 405) has been duly incorporated and is
validly existing as a corporation in good standing under the laws of the
jurisdiction in which it is chartered or organized, with full corporate power
and authority to own and lease its properties and conduct its business as
described in the Prospectus, and is duly qualified to do business as a foreign
corporation and is in good standing under the laws of each jurisdiction which
requires such qualification except where the failure to so qualify would not
have a material adverse effect on the business, operations, properties or
financial condition of the Company and its subsidiaries taken as a whole;
<PAGE>
(ii) All of the issued and outstanding shares
of capital stock of each significant subsidiary have been duly and validly
authorized and issued and are fully paid and nonassessable, and, except as
otherwise set forth in the Prospectus or such opinion, all outstanding shares
of capital stock of the significant subsidiaries are owned by the Company
either directly or through wholly owned subsidiaries free and clear of any
perfected security interest and, to the best knowledge of such counsel, after
due inquiry, any other security interests, claims, liens or encumbrances, and
the Company has no subsidiaries required by Regulation S-K under the Act to be
listed as a subsidiary on Exhibit 22 other than those listed in Exhibit 22 to
the Company's annual report on Form 10-K for the fiscal year ended December
31, 1995;
(iii) The Indenture has been duly authorized,
executed and delivered by the Company and duly qualified under the Trust
Indenture Act and is a valid and legally binding instrument of the Company
enforceable in accordance with its terms.
(iv) The Underwritten Securities are in a form
contemplated by the Indenture and have been duly authorized by all necessary
corporate action, have been duly executed and, assuming the due authentication
and delivery thereof by the Trustee (and payment therefor by the
Underwriters), are legal, valid and binding obligations of the Company
enforceable in accordance with their terms;
(v) The statements in the Prospectus under the
following (or comparable) caption "Description of the Notes", insofar as they
purport to summarize in all material respects the provisions of documents or
agreements specifically referred to therein fairly and present the information
called for with respect thereto by Form S-3;
(vi) To the best knowledge of such counsel,
after due inquiry, there is no pending or threatened action, suit or
proceeding before any court or governmental agency, authority or body or any
arbitrator involving the Company or any of its subsidiaries of a character
required to be disclosed in the Registration Statement which is not adequately
disclosed in the Prospectus, and there is no franchise, contract or other
document of a character required to be described in the Registration Statement
or Prospectus, or to be filed as an exhibit, which is not described or filed
as required;
(vii) The Registration Statement has become
effective under the Act; any required filing of the Prospectus, and any
supplements thereto, pursuant to Rule 424(b) has been made in the manner and
within the time period required by Rule 424(b); to the best knowledge of such
counsel, after due inquiry, no stop order suspending the effectiveness of the
Registration Statement has been issued, no proceedings for that purpose have
been instituted or threatened and the Registration Statement and the
Prospectus (other than the financial statements and other financial and
statistical information contained therein as to which such counsel need
express no opinion) comply as to form in all material respects with the
applicable requirements of the Act, the Trust Indenture Act and the Exchange
Act and the respective rules thereunder;
<PAGE>
(viii) The Terms Agreement (including the provisions
of this "Underwriting Agreement Basic Provisions") has been duly authorized,
executed and delivered by the Company; the execution, delivery and performance
of the Terms Agreement (including the provisions of this "Underwriting
Agreement Basic Provisions"), the consummation of the transactions
contemplated hereby and compliance by the Company with the provisions of the
Underwritten Securities and the Indenture will not conflict with or result in
the creation or imposition of any lien, charge or encumbrance upon any of the
assets of the Company or any of its subsidiaries pursuant to the terms of, or
constitute a default under, any loan agreement, indenture, mortgage, deed of
trust, other agreement or instrument known to such counsel to which the
Company or any of its subsidiaries is bound or to which any of the property or
assets of the Company or any of its subsidiaries is subject, nor will such
actions result in a violation of the corporate charter or by-laws of the
Company or any of its significant subsidiaries (as defined in Rule 405) of any
order, rule or regulation of any court, regulatory body, administrative
agency or governmental body or arbitrator known to such counsel and having
jurisdiction over the Company, any of its significant subsidiaries or their
respective properties; and no consent, authorization or order of, or filing or
registration with, any court, regulatory body, administrative agency or
governmental body or arbitrator is required for the execution, delivery and
performance by the Company of the Terms Agreement (including the provisions of
this "Underwriting Agreement Basic Provisions"), except such as may be
required by the Act, the Trust Indenture Act, the Exchange Act or state
securities laws.
(ix) No consent, approval, authorization or order of
any court or governmental agency or body is required for the consummation of
the transactions contemplated herein, except such as have been obtained under
the Act and such as may be required under the blue sky laws of any
jurisdiction in connection with the purchase and distribution of the
Underwritten Securities by the Underwriters and such other approvals
(specified in such opinion) as have been obtained; and
<PAGE>
(x) No holders of securities of the Company have
rights to the registration of such securities under the Registration
Statement.
In addition, such opinion shall also contain a statement to the effect that
while such counsel is not passing upon, and does not assume responsibility
for, the accuracy, completeness or fairness of the Registration Statement or
the Prospectus (except as and to the extent set forth in clause (v) above),
based upon the procedures referred to in such opinion nothing has come to the
attention of such counsel which leads him to believe (i) that either the
Registration Statement or the Prospectus or, as of its date, any further
amendment or supplement thereto made by the Company prior to the date of such
opinion (other than the financial statements, related schedules and other
financial information therein, as to which such counsel need express no
belief) 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 (ii) that as of the date of such opinion,
either the Registration Statement or the Prospectus contains an untrue
statement or a material fact or omits to state a material fact required to be
stated therein or necessary to make the statement therein not misleading.
(e) Piper & Marbury shall have furnished to the Underwriters
their opinion, addressed to the Underwriters and dated the Delivery Date, as
counsel to the Company, 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 its
jurisdiction in which it is chartered or organized, with full corporate power
and authority to own its properties and conduct its business as described in
the Prospectus;
(ii) The Indenture has been duly authorized, executed
and delivered by the Company and duly qualified under the Trust Indenture Act
and is a valid and legally binding instrument of the Company enforceable in
accordance with its terms;
(iii) The Underwritten Securities are in a form
contemplated by the Indenture and have been duly authorized by all necessary
corporate action, have been duly executed and, assuming the due authentication
and delivery thereof by the Trustee (and payment therefor by the Underwriters)
are legal, valid and binding obligations of the Company enforceable in
accordance with their terms;
<PAGE>
(iv) The Registration Statement has become effective
under the Act; any required filing of the Prospectus, and any supplements
thereto, pursuant to Rule 424(b) has been made in the manner and within the
time period required by Rule 424(b); to the best knowledge of such counsel, no
stop order suspending the effectiveness of the Registration Statement has been
issued, no proceedings for that purpose have been instituted or threatened and
the Registration Statement and the Prospectus and the documents incorporated
by reference in the Prospectus (other than the financial statements and other
financial and statistical information contained therein as to which such
counsel need express no opinion) comply as to form in all material respects
with the applicable requirements of the Act, the Trust Indenture Act and the
Exchange Act and the respective rules thereunder;
(v) The statements made in the Prospectus under the
following (or comparable) caption: "Description of the Notes", insofar as
they purport to summarize in all material respects the provisions of documents
or agreements specifically referred to therein, fairly present the
information called for with respect thereto by Form S-3;
(vi) The Terms Agreement (including the provisions of
this "Underwriting Agreement Basic Provisions") has been duly authorized,
executed and delivered by the Company; the execution, delivery and performance
of the Terms Agreement (including the provisions of this "Underwriting
Agreement Basic Provisions") and compliance by the Company with the provisions
of the Underwritten Securities and the Indenture or the consummation of the
transactions contemplated herein or the fulfillment of the terms hereof will
not conflict with, result or constitute a default (nor an event which with the
notice or lapse of time, or both, would constitute a default) under the
charter or by-laws of the Company or Ryland Mortgage Company ("RMC") or the
terms of any indenture, other agreement or instrument known to such counsel
and to which the Company or RMC is a party or bound and which is material to
the financial condition of the Company and its subsidiaries taken as a whole
or result in a violation of any order or regulation known to such counsel to
be applicable to the Company or RMC of any court, regulatory body,
administrative agency or governmental body or arbitrator having jurisdiction
over the Company or its properties; and no consent, authorization or order of,
or filing or registration with, any court, regulatory body, administrative
agency or governmental body or arbitrator is required for the execution,
delivery and performance by the Company of the Terms Agreement (including the
provisions of this "Underwriting Agreement Basic Provisions"), except such as
may be required by the Act, the Trust Indenture Act, the Exchange Act or state
securities laws.
<PAGE>
In addition, such opinion shall also contain a statement to the
effect that while such counsel is not passing upon, and does not assume
responsibility for, the accuracy, completeness or fairness of the Registration
Statement or the Prospectus (except as and to the extent set forth in clause
(v) above), based upon the procedures referred to in such opinion nothing has
come to the attention of such counsel which lead them to believe that (i)
either the Registration Statement at the time the Registration Statement
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 (ii) the Prospectus as of the date
of the opinion contained any untrue statement of a material fact or omitted to
state a material fact necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading (it
being understood that such counsel will not comment as to the financial
statements and schedules and other financial and statistical data included or
incorporated by reference in the Registration Statement or the Prospectus).
Any opinions given by such counsel as to enforceability, if any,
may be subject to the effect of liquidation, conservatorship, insolvency,
bankruptcy, reorganization, moratorium, and other similar laws generally
affecting the rights of creditors, the application of equitable principles
(whether in equity or at law) and the availability of equitable remedies
(whether in equity or at law).
(f) The Company shall have furnished to the Underwriters on
the Delivery Date a certificate, dated the Delivery Date, of its Chairman of
the Board, President and Chief Executive Officer and its principal financial
or accounting officer stating that:
(i) The representations, warranties and agreements of the
Company in Section 1 hereof are true and correct in all material respects as
of the Delivery Date; the Company has complied in all material respects with
all of its agreements contained herein to be performed or complied with at or
before the Delivery Date; and the conditions set forth in Section 9(a) hereof
have been fulfilled in all material respects;
<PAGE>
(ii) They have carefully examined the Registration
Statement and the Prospectus and, in their opinion (A) as of its effective
date the Registration Statement does not contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein not misleading, (B) the Prospectus
does not contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, and (C) since the effective date of the Registration
Statement there has not occurred any event required to be set forth in an
amended or supplemented prospectus which has not been so set forth;
(iii) no stop order suspending the effectiveness of
the Registration Statement has been issued, and no proceeding for that purpose
has been instituted or is threatened by the Commission; and
(iv) since the date of the most recent financial statements
included in the Prospectus, there has been no material adverse change in the
financial condition, earnings, business, properties or results of operations
of the Company and its subsidiaries taken as a whole, whether or not arising
from transactions in the ordinary course of business, except as set forth in
or contemplated in the Prospectus or any material change in the Capital Stock
or long-term debt of the Company and its subsidiaries taken as a whole.
(g) Subsequent to the respective dates as of which
information is given in the Registration Statement and the Prospectus, there
shall not have been (i) any change or decrease specified in the letter or
letters referred to in paragraph (i) of this Section 9 or (ii) any change, or
any development involving a prospective change, in or affecting the business
or properties of the Company and its subsidiaries taken as a whole.
(h) Prior to the Delivery Date, the Company shall have
furnished to the Representatives such further information, certificates and
documents as the Representatives may reasonably request.
<PAGE>
(i) The Company shall have furnished to the Underwriters on
the Delivery Date a letter of Ernst & Young, addressed to the Underwriters and
dated such date, confirming that they are independent public accountants
within the meaning of the Act and are in compliance with the applicable
requirements relating to the qualification of accountants under Rule 2-01 of
Regulation S-X of the Commission, and stating, as of the date of such letter
(or, with respect to matters involving changes or development since the
respective dates as of which specified financial information is given in the
Prospectus, as of a date not more than five days prior to the date of such
letter), the conclusions and findings of such firm with respect to the
financial information and other matters covered by its letter delivered to the
Underwriters concurrently with the execution of this Agreement and confirming
in all material respects the conclusions and findings set forth in such prior
letter.
If any of the conditions specified in this Section 9 shall not
have been fulfilled in all material respects when and as provided in this
Agreement, or if any of the opinions and certificates mentioned above or
elsewhere in this Agreement shall not be in all material respects reasonably
satisfactory in form and substance to the Representatives and Simpson Thacher
& Bartlett, counsel for the Underwriters, this Agreement and all obligations
of the Underwriters hereunder may be canceled at, or at any time prior to, the
Delivery Date by the Representatives. Notice of such cancellation shall be
given to the Company in writing or by telephone or telegraph confirmed in
writing.
10. If the Company shall fail to tender the Underwritten
Securities on the Delivery Date or if the Underwriters shall decline to
purchase the Underwritten Securities for any reason permitted under this
Agreement (other than pursuant to Section 3 or any of clauses (iv) through
(vi) of Section 8 hereof), the Company shall reimburse the Underwriters for
the reasonable fees and expenses of their counsel and for such other out-of-
pocket expenses as shall have been incurred by them in connection with this
Agreement and the proposed purchase of the Underwritten Securities, and upon
demand the Company shall pay the full amount thereof to the Underwriters. If
this Agreement is terminated pursuant to Section 3 hereof by reason of the
default of one or more Underwriters or pursuant to any of clauses (iv) through
(vi) of Section 8 hereof, the Company shall not be obligated to reimburse any
Underwriter on account of such expenses except that the Company will continue
to be liable for the payment of the expenses as set forth in Section 5(j) and
with respect to any non-defaulting underwriter and the QIU as set forth in
Section 6 and 7, respectively, and shall not continue to be liable for the
payment of expenses of any defaulting underwriter as set forth in Section 6.
<PAGE>
11. The Company shall be entitled to act and rely upon any
request, consent, notice or agreement of the Underwriters. Any notice by the
Company to the Underwriters shall be sufficient if given in writing or by
telegraph addressed to the Underwriters at the address set forth for that
purpose in the Terms Agreement, and any notice by the Underwriters to the
Company shall be sufficient if given in writing or by telecopy addressed to
the Company at 11000 Broken Land Parkway, Columbia, Maryland 21044, attention
General Counsel.
12. This Agreement shall be binding upon the Underwriters, the
Company, and their respective successors. This Agreement and the terms and
provisions hereof are for the sole benefit of only those persons, except that
(a) the representations, warranties, indemnities and agreements of the Company
contained in this Agreement shall also be deemed to be for the benefit of the
person or persons, if any, who control any Underwriter within the meaning of
Section 15 of the Act, (b) the indemnity agreement of the Underwriters
contained in Section 6 hereof shall be deemed to be for the benefit of
directors of the Company, officers of the Company who have signed the
Registration Statement and any person controlling the Company and (c) the
indemnity agreement of the Company contained in Section 7 shall be for the
benefit of the QIU. Nothing in this Agreement is intended or shall be
construed to give any person, other than the persons referred to in this
Section, any legal or equitable right, remedy or claim under or in respect of
this Agreement or any provision contained herein.
13. For purpose of this Agreement, (a) "business day" means any
day on which the New York Stock Exchange, Inc. is open for trading.
14. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF NEW YORK. THE TERMS AGREEMENT MAY BE EXECUTED IN
ONE OR MORE COUNTERPARTS, AND IF EXECUTED IN MORE THAN ONE COUNTERPART THE
EXECUTED COUNTERPARTS SHALL TOGETHER CONSTITUTE A SINGLE AGREEMENT.
<PAGE>
SIGNATURES
----------
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
The Ryland Group, Inc.
----------------------
(Registrant)
Date: July 2, 1996 /s/ Stephen B. Cook
------------------ -------------------
Stephen B. Cook
Vice President and
Corporate Controller
(..continued)
