1,750,000 Shares*
DOMINION HOMES, INC.
Common Shares
UNDERWRITING AGREEMENT
St. Petersburg, Florida
_______________, 2002
Xxxxxxx Xxxxx & Associates, Inc.
Xxxx Xxxxx Xxxx Xxxxxx, Incorported
As Representatives of the Several Underwriters
listed on Schedule I hereto
c/o Raymond Xxxxx & Associates, Inc.
000 Xxxxxxxx Xxxxxxx
Xx. Xxxxxxxxxx, Xxxxxxx 00000
Ladies and Gentlemen:
Dominion Homes, Inc., an Ohio corporation (the "Company"), proposes,
subject to the terms and conditions stated herein, to issue and sell to the
several Underwriters named in Schedule I hereto (the "Underwriters"), and BRC
Properties Inc., an Ohio corporation and a shareholder of the Company (the
"Selling Shareholder"), proposes, subject to the terms and conditions stated
herein, to sell to the Underwriters, an aggregate of 1,750,000 of the Company's
Common Shares, without par value (the "Common Shares), of which (a) 1,450,000
shares are to be issued and sold by the Company, and (b) 300,000 shares are to
be sold by the Selling Shareholder. The aggregate of 1,750,000 shares to be
purchased from the Company and the Selling Shareholder are called the "Firm
Shares." In addition, the Company has agreed to sell to the Underwriters, upon
the terms and conditions stated herein, up to an additional 131,250 Common
Shares and the Selling Shareholder has agreed to sell to the Underwriters, upon
the terms and conditions stated herein, up to an additional 131,250 Common
Shares to cover over-allotments by the Underwriters, if any. The additional
131,250 shares to be sold by the Company and the additional 131,250 shares to be
sold by the Selling Shareholder are collectively referred to in this Agreement
as the "Additional Shares." The Firm Shares and the Additional Shares are
collectively referred to in this Agreement as the "Shares." Xxxxxxx Xxxxx &
Associates, Inc.
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* Plus an additional 262,500 shares subject to Underwriters' over-allotment
option.
and Xxxx Xxxxx Xxxx Xxxxxx, Incorported are acting as the representatives of the
several Underwriters and in such capacity are referred to in this Agreement as
the "Representatives."
The Company and the Selling Shareholder wish to confirm as follows their
agreement with you and the other several Underwriters, on whose behalf you are
acting, in connection with the several purchases of the Shares from the Company
and the Selling Shareholder.
1. Registration Statement and Prospectus. The Company has prepared and
filed with the Securities and Exchange Commission (the "Commission") in
accordance with the provisions of the Securities Act of 1933, as amended,
and the published rules and regulations of the Commission thereunder
(collectively, the "Act"), a registration statement on Form S-2 (File No.
333-_____), including a prospectus subject to completion, relating to the
Shares. Such registration statement, as amended, including the financial
statements, exhibits and schedules thereto, at the time when it becomes
effective and as thereafter amended by any post-effective amendment, if
any, is referred to in this Agreement as the "Registration Statement." The
prospectus in the form included in the Registration Statement or, if the
prospectus included in the Registration Statement omits certain information
in reliance upon Rule 430A under the Act and such information is thereafter
included in a prospectus filed with the Commission pursuant to Rule 424(b)
under the Act or as part of a post-effective amendment to the Registration
Statement after the Registration Statement becomes effective, the
prospectus as so filed, is referred to in this Agreement as the
"Prospectus." If the Company elects, with the consent of the
Representatives, to rely on Rule 434 under the Act, all references to the
Prospectus shall be deemed to include the form of prospectus and the term
sheet contemplated by Rule 434, taken together, provided to the
Underwriters by the Company in reliance on Rule 434 under the Act (the
"Rule 434 Prospectus"). If the Company files another registration statement
with the Commission to register a portion of the Shares pursuant to Rule
462(b) under the Act (the "Rule 462 Registration Statement"), then any
reference to "Registration Statement" herein shall be deemed to include the
registration statement on Form S-2 (File No. 333-_____) and the Rule 462
Registration Statement, as each such registration statement may be amended
pursuant to the Act. The prospectus subject to completion in the form
included in the Registration Statement at the time of the initial filing of
such Registration Statement with the Commission and as such prospectus is
amended from time to time until the date of the Prospectus is referred to
in this Agreement as the "Preliminary Prospectus." All references in this
Agreement to the Registration Statement, the Rule 462 Registration
Statement, the Rule 434 Prospectus, a Preliminary Prospectus or the
Prospectus, or any amendments or supplements to any of the foregoing, shall
include any copy thereof filed with the Commission pursuant to its
Electronic Data Gathering, Analysis and Retrieval System ("XXXXX"). Any
reference in this Agreement to the Registration Statement, any Preliminary
Prospectus or the Prospectus shall be deemed to refer to and include the
documents incorporated by reference therein pursuant to Item 12 of Form S-2
under the Act, as of the date of the Registration Statement, such
Preliminary Prospectus or the Prospectus, as the case may be. As used
herein, the term "Incorporated Documents" means the documents that are
incorporated by reference in the Registration Statement, any Preliminary
Prospectus, the
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Prospectus or any amendment or supplement thereto, and any portion of
any other document filed with the Commission specifically incorporated by
reference into any Incorporated Document.
2. Agreements to Sell and Purchase. Upon the terms and conditions set
forth herein, (i) the Company, severally and not jointly, agrees to issue
and sell an aggregate of 1,450,000 Firm Shares to the Underwriters and (ii)
the Selling Shareholder, severally and not jointly, agrees to sell an
aggregate 300,000 Firm Shares to the Underwriters. Upon the basis of the
representations, warranties and agreements of the Company and the Selling
Shareholder herein contained and subject to all the terms and conditions
set forth herein, each Underwriter agrees, severally and not jointly, to
purchase from the Company and the Selling Shareholder at a purchase price
of $[___] per Share (the "purchase price per Share"), the number of Firm
Shares set forth opposite the name of such Underwriter in Schedule I
hereto.
The Company and the Selling Shareholder, severally and not jointly,
hereby also agree to sell to the Underwriters, and, upon the basis of the
representations, warranties and agreements of the Company and the Selling
Shareholder herein contained and subject to all the terms and conditions
set forth herein, the Underwriters shall have the right for 30 days from
the date of the Prospectus to purchase from each of the Company and the
Selling Shareholder up to 131,250 Additional Shares (for a total of 262,500
Additional Shares) at the purchase price per Share for the Firm Shares.
One-half of the total Additional Shares purchased by the Underwriters shall
be purchased from the Company, and one-half of the total Additional Shares
purchased by the Underwriters shall be purchased from the Selling
Shareholder. The Additional Shares may be purchased solely for the purpose
of covering over-allotments, if any, made in connection with the offering
of the Firm Shares. If any Additional Shares are to be purchased, each
Underwriter, severally and not jointly, agrees to purchase the number of
Additional Shares (subject to such adjustments as you may determine to
avoid fractional shares) that bears the same proportion to the total number
of Additional Shares to be purchased by the Underwriters as the number of
Firm Shares set forth opposite the name of such Underwriter in Schedule I
hereto bears to the total number of Firm Shares. The option to purchase
Additional Shares may be exercised at any time within 30 days after the
date of the Prospectus, but no more than once.
3. Terms of Public Offering. The Company has been advised by you that
the Underwriters propose to make a public offering of their respective
portions of the Shares as soon after the Registration Statement and this
Agreement have become effective as in your judgment is advisable and
initially to offer the Shares upon the terms set forth in the Prospectus.
Not later than 12:00 p.m. on the second business day following the date
the Shares are released by the Underwriters for sale to the public, the
Company shall deliver or cause to be delivered copies of the Prospectus in
such quantities and at such places as the Representatives shall request.
4. Delivery of the Shares and Payment Therefor. Delivery to the
Underwriters of the Firm Shares and payment therefor shall be made at the
offices of Vorys, Xxxxx, Xxxxxxx and Xxxxx LLP, 00 Xxxx Xxx Xxxxxx,
Xxxxxxxx, Xxxx, at 10:00 a.m., local time, on [_________],
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2002, or such other place, time and date not later than 1:30 p.m.,
local time, on [__________], 2002, as the Representatives shall designate
by notice to the Company (the time and date of such closing are called the
"Closing Date"). The place of closing for the Firm Shares and the Closing
Date may be varied by agreement between the Representatives and the
Company. The Company and the Selling Shareholder hereby acknowledge that
circumstances under which the Representatives may provide notice to
postpone the Closing Date as originally scheduled include any determination
by the Company, the Selling Shareholder or the Representatives to
recirculate to the public copies of an amended or supplemented Prospectus
or a delay as contemplated by the provisions of Section 11 hereof.
Delivery to the Underwriters of and payment for any Additional Shares
to be purchased by the Underwriters shall be made at the offices of Vorys,
Xxxxx, Xxxxxxx and Xxxxx LLP, 00 Xxxx Xxx Xxxxxx, Xxxxxxxx, Xxxx, at 10:00
a.m., local time, on such date or dates (the "Additional Closing Date")
(which may be the same as the Closing Date, but shall in no event be
earlier than the Closing Date nor earlier than three nor later than ten
business days after the giving of the notice hereinafter referred to) as
shall be specified in a written notice, from the Representatives on behalf
of the Underwriters to the Company and the Selling Shareholder, of the
Underwriters' determination to purchase a number, specified in such notice,
of Additional Shares. Such notice may be given at any time within 30 days
after the date of the Prospectus and must set forth (i) the aggregate
number of Additional Shares as to which the Underwriters are exercising the
option and (ii) the names and denominations in which the certificates for
which the Additional Shares are to be registered. The place of closing for
the Additional Shares and the Additional Closing Date may be varied by
agreement between you and the Company.
The Firm Shares and for any Additional Shares to be purchased hereunder
shall be registered in such names and in such denominations as you shall
request prior to 1:00 p.m., local time, not later than the second full
business day preceding the Closing Date or the Additional Closing Date, as
the case may be. Such certificates shall be made available to you for
inspection and packaging at The Depositary Trust Company not later than
9:30 a.m., local time, on the business day immediately preceding the
Closing Date or the Additional Closing Date, as the case may be. The
certificates evidencing the Firm Shares and any Additional Shares to be
purchased hereunder shall be delivered to you on the Closing Date or the
Additional Closing Date, as the case may be, through the facilities of The
Depositary Trust Company, against payment of the purchase price therefor by
wire transfer of immediately available funds to accounts specified in
writing not later than the close of business on the business day next
preceding the Closing Date or the Additional Closing Date, as the case may
be, by the Company and the Selling Shareholder. Payment for the Shares sold
by the Company hereunder shall be delivered by the Representatives to the
Company. Payment for the Shares sold by the Selling Shareholder hereunder
shall be delivered by the Representatives to the Selling Shareholder.
It is understood that the Representatives have been authorized, for
their own account and the accounts of the several Underwriters, to accept
delivery of and receipt for, and make payment of the purchase price per
Share for the Firm Shares and the Additional Shares, if any, that the
Underwriters have agreed to purchase. Xxxxxxx Xxxxx and Associates, Inc. or
Xxxx Xxxxx
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Wood Walker, Incorporated, individually and not as a Representative of
the Underwriters, may, but shall not be obligated to, make payment for any
Shares to be purchased by any Underwriter whose funds shall not have been
received by the Representatives by the Closing Date or the Additional
Closing Date, as the case may be, for the account of such Underwriter, but
any such payment shall not relieve such Underwriter from any of its
obligations under this Agreement.
The Selling Shareholder hereby agrees that it will pay all stock
transfer taxes, stamp duties and other similar taxes, if any, payable upon
the sale or delivery of the Shares to be sold by the Selling Shareholder to
the several Underwriters, or otherwise in connection with the performance
of the Selling Shareholder's obligations hereunder.
5. Covenants and Agreements of the Company.
5.1 Of the Company. The Company covenants and agrees with the
several Underwriters as follows:
(a) The Company will use its reasonable best efforts to cause the
Registration Statement and any amendments thereto to become effective, if
it has not already become effective, and will advise you promptly and, if
requested by you, will confirm such advice in writing (i) when the
Registration Statement has become effective and the time and date of any
filing of any post-effective Registration Statement or any amendment or
supplement to any Preliminary Prospectus or the Prospectus and the time and
date that any post-effective amendment to the Registration Statement
becomes effective, (ii) if Rule 430A under the Act is employed, when the
Prospectus has been timely filed pursuant to Rule 424(b) under the Act,
(iii) of the receipt of any comments of the Commission, or any request by
the Commission for amendments or supplements to the Registration Statement,
any Preliminary Prospectus or the Prospectus or for additional information,
(iv) of the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or of the suspension of
qualification of the Shares for offering or sale in any jurisdiction or the
initiation of any proceeding for such purposes and (v) within the period of
time referred to in Section 5(e) below, of any change in the Company's
condition (financial or other), business, properties, net worth or results
of operations, or of any event that comes to the attention of the Company
that makes any statement made in the Registration Statement or the
Prospectus (as then amended or supplemented) untrue in any material respect
or that requires the making of any additions thereto or changes therein in
order to make the statements therein (in the case of the Prospectus, in
light of the circumstances under which they were made) not misleading in
any material respect, or of the necessity to amend or supplement the
Prospectus (as then amended or supplemented) to comply with the Act or any
other law. If at any time the Commission shall issue any stop order
suspending the effectiveness of the Registration Statement, the Company
will make every reasonable effort to obtain the withdrawal or lifting of
such order at the earliest possible time. If the Company elects, with the
consent of the Representatives, to rely on Rule 434 under the Act, the
Company will provide the Underwriters with copies of the form of Rule 434
Prospectus (including copies of a term sheet that complies with the
requirements of Rule 434 under the Act),
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in such number as the Underwriters may reasonably request, and file
with the Commission in accordance with Rule 424(b) of the Act the form of
Prospectus complying with Rule 434(b)(2) of the Act before the close of
business on the first business day immediately following the date hereof.
If the Company elects not to rely on Rule 434 under the Act, the Company
will provide the Underwriters with copies of the form of Prospectus, in
such number as the Underwriters may reasonably request, and file with the
Commission such Prospectus in accordance with Rule 424(b) of the Act before
the close of business on the first business day immediately following the
date hereof.
(b) The Company will furnish to you, without charge, two signed
duplicate originals of the Registration Statement as originally filed with
the Commission and of each amendment thereto, and will also furnish to you,
without charge, such number of conformed copies of the Registration
Statement as originally filed and of each amendment thereto as you may
reasonably request.
(c) The Company will not file any Rule 462 Registration Statement
or any amendment to the Registration Statement or make any amendment or
supplement to the Prospectus unless (i) you shall have previously been
advised thereof and been given a reasonable opportunity to review such
filing, amendment or supplement and (ii) you have not reasonably objected
to such filing, amendment or supplement after being so advised and having
been given a reasonable opportunity to review such filing, amendment or
supplement.
(d) Prior to the execution and delivery of this Agreement, the
Company has delivered or will deliver to you, without charge, in such
quantities as you have requested or may hereafter reasonably request,
copies of each form of the Preliminary Prospectus. Consistent with the
provisions of Section 5(e) hereof, the Company consents to the use, in
accordance with the provisions of the Act and with the securities or Blue
Sky laws of the jurisdictions in which the Shares are offered by the
several Underwriters and by dealers, prior to the date of the Prospectus,
of each Preliminary Prospectus so furnished by the Company.
(e) As soon after the execution and delivery of this Agreement as
is practicable and thereafter from time to time for such period as in the
reasonable opinion of counsel for the Underwriters a prospectus is required
by the Act to be delivered in connection with sales by any Underwriter or a
dealer (the "Prospectus Delivery Period"), and for so long a period as you
may request for the distribution of the Shares, the Company will deliver to
each Underwriter and each dealer, without charge, as many copies of the
Prospectus (and of any amendment or supplement thereto) as they may
reasonably request. The Company consents to the use of the Prospectus (and
of any amendment or supplement thereto) in accordance with the provisions
of the Act and with the securities or Blue Sky laws of the jurisdictions in
which the Shares are offered by the several Underwriters and by all dealers
to whom Shares may be sold, both in connection with the offering and sale
of the Shares and for such period of time thereafter as the Prospectus is
required by the Act to be delivered in connection with sales by any
Underwriter or dealer. If at any time prior to the later of (i) the
completion of the distribution of the Shares pursuant to the offering
contemplated by the Registration Statement or (ii) the
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expiration of prospectus delivery requirements with respect to the
Shares under Section 4(3) of the Act and Rule 174 thereunder, any event
shall occur that in the judgment of the Company or in the opinion of
counsel for the Underwriters is required to be set forth in the Prospectus
(as then amended or supplemented) or should be set forth therein in order
to make the statements therein, in the light of the circumstances under
which they were made, not misleading, or if it is necessary to supplement
or amend the Prospectus to comply with the Act or any other law, the
Company will forthwith prepare and, subject to Sections 5(a) and 5(c)
hereof, file with the Commission and use its best efforts to cause to
become effective as promptly as possible an appropriate supplement or
amendment thereto, and will furnish to each Underwriter who has previously
requested Prospectuses, without charge, a reasonable number of copies
thereof.
(f) The Company will cooperate with you and counsel for the
Underwriters in connection with the registration or qualification of the
Shares for offering and sale by the several Underwriters and by dealers
under the securities or Blue Sky laws of such jurisdictions as you may
reasonably designate and will file such consents to service of process or
other documents as may be reasonably necessary in order to effect and
maintain such registration or qualification for so long as required to
complete the distribution of the Shares; provided that in no event shall
the Company be obligated to qualify to do business in any jurisdiction
where it is not now so qualified or to take any action that would subject
it to general service of process in suits, other than those arising out of
the offering or sale of the Shares, as contemplated by this Agreement and
the Prospectus, in any jurisdiction where it is not now so subject. In the
event that the qualification of the Shares in any jurisdiction is
suspended, the Company shall so advise you promptly in writing.
(g) The Company will make generally available to its security
holders a consolidated earnings statement (in form complying with the
provisions of Rule 158), which need not be audited, covering a twelve-month
period commencing after the effective date of the Registration Statement
and the Rule 462 Registration Statement, if any, and ending not later than
15 months thereafter, as soon as practicable after the end of such period,
which consolidated earnings statement shall satisfy the provisions of
Section 11(a) of the Act.
(h) During the Prospectus Delivery Period, the Company will file
all documents required to be filed with the Commission pursuant to Sections
13, 14 and 15 of the Securities Exchange Act of 1934, as amended, and the
published rules and regulations of the Commission thereunder (collectively,
the "Exchange Act") in the manner and within the time periods required by
the Exchange Act.
(i) During the period ending three years from the date hereof, the
Company will furnish to you and, upon your request, to each of the other
Underwriters, (i) as soon as available, a copy of each proxy statement,
quarterly or annual report or other report of the Company mailed to
shareholders or filed with the Commission, the National Association of
Securities Dealers, Inc. (the "NASD") or the Nasdaq Stock Market ("NASDAQ")
or any national securities exchange and (ii) from time to time such other
information concerning the Company as you may reasonably request.
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(j) If this Agreement shall terminate or shall be terminated after
execution pursuant to any provision hereof (except pursuant to a
termination under Section 12 hereof) or if this Agreement shall be
terminated by the Underwriters because of any inability, failure or refusal
on the part of the Company or the Selling Shareholder to perform in all
material respects any agreement herein or to comply in all material
respects with any of the terms or provisions hereof or to fulfill in all
material respects any of the conditions of this Agreement, the Company and
the Selling Shareholder, jointly and severally, agree, in addition to and
not in derogation of any remedy that may be available to you, to reimburse
you and the other Underwriters for all reasonable out-of-pocket expenses
(including reasonable travel expenses and reasonable fees and expenses of
counsel for the Underwriters, but excluding wages and salaries paid by you)
reasonably incurred by you in connection herewith, such reimbursement not
to exceed $75,000 in the aggregate.
(k) The Company will apply the net proceeds from the sale of the
Shares to be sold by it hereunder in accordance in all material respects
with the statements under the caption "Use of Proceeds" in the Prospectus.
(l) If Rule 430A under the Act is employed, the Company will timely
file the Prospectus or term sheet (as described in Rule 434(b) under the
Act) pursuant to Rule 424(b) under the Act.
(m) For a period of 180 days after the date of the Prospectus first
filed pursuant to Rule 424(b) under the Act, without your prior written
consent, the Company will not, (i) directly or indirectly, issue, sell,
offer or contract to sell or otherwise dispose of or transfer any Common
Shares or securities convertible into or exchangeable or exercisable for
Common Shares (collectively, "Company Securities") or any rights to
purchase Company Securities, or file any registration statement under the
Act with respect to any of the foregoing or (ii) enter into any swap or
other agreement that transfers, in whole or in part, directly or
indirectly, the economic consequences of ownership of Company Shares
whether any such swap or transaction is to be settled by delivery of Common
Shares or other securities, in cash or otherwise, except to the
Underwriters pursuant to this Agreement and except for grants of options
and issuances of Common Shares in the ordinary course of business pursuant
to the Company's stock option, stock bonus or other employee benefit plans
or arrangements in effect as of the date hereof and referred to in the
Prospectus (a "Permitted Share Issuance").
(n) Prior to the Closing Date or the Additional Closing Date, as
the case may be, the Company will furnish to you, as promptly as possible,
copies of any unaudited interim consolidated financial statements of the
Company and its subsidiaries for any quarterly period subsequent to the
periods covered by the financial statements appearing in the Prospectus.
(o) The Company will comply with all provisions of any undertakings
contained in the Registration Statement.
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(p) The Company will not at any time prior to 12 months after the
Closing , directly or indirectly, take any action designed, or which might
reasonably be expected to cause or result in, or which will constitute,
stabilization or manipulation of the price of the Common Shares to
facilitate the sale or resale of any of the Shares.
(q) For a period of three years, the Company will timely file with
NASDAQ all documents and notices required by NASDAQ of companies that have
or will issue securities that are traded on the NASDAQ.
(r) The Company shall engage and maintain, at its expense, a
transfer agent and, if necessary under the jurisdiction of its
incorporation or the rules of any national securities exchange on which the
Common Shares are listed, a registrar (which, if permitted by applicable
laws and rules may be the same entity as the transfer agent) for the Common
Shares.
5.2 Of The Selling Shareholder. The Selling Shareholder covenants and
agrees with the several Underwriters as follows:
(a) The Selling Shareholder will execute and deliver a Lock-Up
Agreement, substantially in the form of Exhibit A attached hereto ("Lock-Up
Agreement").
(b) The Selling Shareholder will review the Prospectus and will
comply with all agreements and satisfy all conditions on its part to be
complied with or satisfied pursuant to this Agreement on or prior to the
Closing Date and will advise the Underwriters prior to the Closing Date if
any statements to be made by the Selling Shareholder in the certificate
contemplated by Section 9(l) hereof would be inaccurate if made as of the
Closing Date.
(c) On the Closing Date, all stock transfer and other taxes (other
than income taxes) that are required to be paid in connection with the sale
and transfer of the Firm Shares to be sold by the Selling Shareholder to
the Underwriters hereunder will have been fully paid for by the Selling
Shareholder and all laws imposing such taxes will have been fully complied
with.
(d) In order to document the Underwriters' compliance with the
reporting and withholding provisions of the Internal Revenue Code of 1986,
as amended (the "Code"), and the regulations promulgated thereunder, with
respect to the transactions herein contemplated, the Selling Shareholder
shall deliver to you at least two days prior to the Closing Date a properly
completed and executed United States Treasury Department Substitute Form
W-9.
(e) The Selling Shareholder will use commercially reasonable
efforts to cause the Company to perform all of its obligations hereunder.
6. Representations and Warranties.
6.1 Concerning the Company. The Company hereby represents and warrants
to each
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Underwriter on the date hereof, and shall be deemed to represent and
warrant to each Underwriter on the Closing Date and the Additional Closing
Date, as the case may be, that:
(a) The Company satisfies all of the requirements of the Act for
use of Form S-2 for the offering of Shares contemplated hereby. Each
Preliminary Prospectus included as part of the Registration Statement as
originally filed or as part of any amendment or supplement thereto, or
filed pursuant to Rule 424(a) under the Act, complied as to form when so
filed in all material respects with the provisions of the Act, except that
this representation and warranty does not apply to statements in or
omissions from such Preliminary Prospectus (or any amendment or supplement
thereto) made in reliance upon and in conformity with information relating
to any Underwriter furnished to the Company in writing by or on behalf of
any Underwriter through you expressly for use therein, or furnished to the
Company in writing by or on behalf of the Selling Shareholder expressly for
use therein. The Commission has not issued any order preventing or
suspending the use of any Preliminary Prospectus and no proceeding for that
purpose has been instituted or, to the knowledge of the Company, threatened
by the Commission or the securities authority of any state or other
jurisdiction.
(b) The Company has prepared each of the Registration Statement,
any Rule 462 Registration Statement and any post-effective amendment
thereto, and the Prospectus and any amendments or supplements thereto. The
Registration Statement (including any Rule 462 Registration Statement), in
the form in which it becomes effective and also in such form as it may be
when any post-effective amendment thereto shall become effective, and the
Prospectus, and any supplement or amendment thereto when filed with the
Commission under Rule 424(b) under the Act, will comply as to form in all
material respects with the provisions of the Act and will not at any such
times 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, except that this representation and
warranty does not apply to statements in or omissions from the Registration
Statement or the Prospectus (or any amendment or supplement thereto) made
in reliance upon and in conformity with information relating to any
Underwriter furnished to the Company in writing by or on behalf of any
Underwriter through you expressly for use therein, or furnished to the
Company in writing by or on behalf of the Selling Shareholder expressly for
use therein.
(c) Each Preliminary Prospectus and the Prospectus, if filed by
electronic transmission pursuant to XXXXX (except as may be permitted by
Regulation S-T under the Act), was identical to the copy thereof delivered
to the Underwriters for use in connection with the offer and sale of the
Shares.
(d) The Incorporated Documents heretofore filed, when they were
filed (or, if any amendment with respect to any such document was filed,
when such amendment was filed), conformed in all material respects with the
requirements of the Exchange Act; and no such Incorporated Document when it
was filed (or, if an amendment with respect to any such document was filed,
when such amendment was filed), contained an untrue statement of a material
fact or omitted to state a material fact required to be stated therein or
necessary in order
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to make the statements therein not misleading.
(e) The capital stock of the Company and the number of its issued
and outstanding Common Shares are and will be as set forth in the
Prospectus as of the date set forth therein, subject to Permitted Share
Issuances. All of the outstanding Common Shares of the Company have been,
and as of the Closing Date and the Additional Closing Date, as the case may
be, will be, duly authorized and validly issued, fully paid and
nonassessable and free of any preemptive or similar rights; except as set
forth in the Prospectus or for Permitted Share Issuances, the Company is
not a party to or bound by any outstanding options, warrants or similar
rights to subscribe for, or contractual obligations to issue, sell,
transfer or acquire, any of its capital stock or any securities convertible
into or exchangeable for any of such capital stock; the Shares to be issued
and sold to the Underwriters by the Company hereunder have been duly
authorized and, when issued and delivered to the Underwriters against full
payment therefor in accordance with the terms hereof will be validly
issued, fully paid and nonassessable and free of any preemptive or similar
rights; the capital stock of the Company conforms to the description
thereof in the Registration Statement and the Prospectus (or any amendment
or supplement thereto); and the delivery of certificates for the Shares
being sold by the Company against payment therefor pursuant to the terms of
this Agreement will pass valid title to the Shares being sold by the
Company, free and clear of any claim, encumbrance or defect in title, to
the several Underwriters purchasing such shares in good faith and without
notice of any lien, claim or encumbrance. The certificates for the Shares
being sold by the Company are in valid and sufficient form.
(f) Each of the Company and its subsidiaries is a corporation, a
limited liability company or a limited partnership, duly organized and
validly existing as a corporation, or duly formed and in full force and
effect as a limited liability company or a limited partnership, as the case
may be, in good standing as a corporation under the laws of the state of
its incorporation with full corporate power and authority, or full power
and authority under the applicable limited liability company or limited
partnership statute and its organizational documents, as the case may be,
to own, lease and operate its properties and to conduct its business as
presently conducted and as described in the Registration Statement and the
Prospectus (and any amendment or supplement thereto) and is duly registered
and qualified to conduct its business and is in good standing in each
jurisdiction or place where the nature of its properties or the conduct of
its business requires such registration or qualification, except where the
failure to so register or qualify has not had and is not reasonably likely
to have a material adverse effect on the condition (financial or other),
business, properties, net worth or results of operations of the Company and
its subsidiaries taken as a whole (a "Material Adverse Effect").
(g) The issued equity interests of each of the Company's
subsidiaries have been duly authorized and validly issued, are fully paid
and nonassessable and are owned by the Company free and clear of any
security interests, liens, encumbrances, equities or claims. The Company
does not have any subsidiaries and does not own a material interest in or
control,
- 11 -
directly or indirectly, any other corporation, limited liability company,
partnership, joint venture, association, trust or other business
organization, except as set forth in Exhibit 21 to the Company's Annual
Report on Form 10-K for its fiscal year ended December 31, 2001, and except
for Alliance Title Agency, Ltd. and the 12 joint ventures referred to in
the Prospectus under "Our Business -- Our Strategy -- Control of the
Development and Building Process -- Land Acquisition and Development" (the
"Land Joint Ventures"). As used in this Agreement, subsidiaries shall mean
Dominion Homes Financial Services, Ltd., Dominion Structural Warranty
Company, LLC, Resolution Property Company, LLC, Alliance Title Agency of
Kentucky, LLC, Dominion Homes of Kentucky, Ltd., Dominion Homes of Kentucky
GP, LLC and Dominion Homes Realty, LLC.
(h) There are no legal or governmental proceedings pending or, to
the knowledge of the Company, threatened, against the Company or its
subsidiaries or to which the Company or its subsidiaries or any of their
properties are subject, that are required to be described in the
Registration Statement or the Prospectus (or any amendment or supplement
thereto) but are not described as required. Except as described in the
Prospectus, there is no action, suit, inquiry, proceeding or investigation
by or before any court or governmental or other regulatory or
administrative agency or commission pending or, to the knowledge of the
Company, threatened, against or involving the Company or any of its
subsidiaries that might individually or in the aggregate prevent or
adversely affect the transactions contemplated by this Agreement or result
in a Material Adverse Effect, nor to the Company's knowledge, is there any
basis for any such action, suit, inquiry, proceeding or investigation.
There are no agreements, contracts, indentures, leases or other instruments
that are required to be described in the Registration Statement or the
Prospectus (or any amendment or supplement thereto) or to be filed as an
exhibit to the Registration Statement (the "Required Contracts") that are
not described, filed or incorporated by reference in the Registration
Statement and the Prospectus as required by the Act. All Required Contracts
to which the Company or any of its subsidiaries is a party have been duly
authorized, executed and delivered by the Company or the applicable
subsidiary, constitute valid and binding agreements of the Company or the
applicable subsidiary and are enforceable against the Company or the
applicable subsidiary in accordance with the terms thereof, except as
enforceability thereof may be limited by (i) the application of bankruptcy,
reorganization, insolvency and other laws affecting creditors' rights
generally and (ii) equitable principles being applied at the discretion of
a court before which any proceeding may be brought. Neither the Company nor
any of its subsidiaries has actual knowledge of or received notice that any
other party to any of the Required Contracts is in breach thereof or
default thereunder, which breach or default would be reasonably likely to
result in a Material Adverse Effect.
(i) Neither the Company nor any of its subsidiaries is (i) in
violation of (A) its certificate or articles of incorporation or
organization or bylaws or code of regulations or operating agreement, or
other organizational documents, (B) any law, ordinance, administrative or
governmental rule or regulation applicable to the Company or any of its
subsidiaries or any of their properties, or (C) any decree of any court or
governmental agency or body having jurisdiction over the Company or any of
its subsidiaries, in each of (B) and (C), the violation of which would be
reasonably likely to have a Material Adverse Effect; or (ii) in default in
the
- 12 -
performance of any obligation, agreement or condition contained in (A) any
bond, debenture, note or any other evidence of indebtedness or (B)any
agreement, indenture, lease or other instrument (each of (A) and (B),
an "Existing Instrument") to which the Company or any of its subsidiaries
is a party or by which any of their properties may be bound, which default
would be reasonably likely to have a Material Adverse Effect; and there
does not exist any state of facts that constitutes an event of default on
the part of the Company or any of its subsidiaries as defined in such
documents or that, with notice or lapse of time or both, would constitute
such an event of default.
(j) The Company's execution and delivery of this Agreement and the
performance by the Company of its obligations under this Agreement have
been duly and validly authorized by the Company, and this Agreement has
been duly executed and delivered by the Company and constitutes a valid and
legally binding agreement of the Company, enforceable against the Company
in accordance with its terms, except to the extent enforceability may be
limited by (i) the application of bankruptcy, reorganization, insolvency
and other laws affecting creditors' rights generally and (ii) equitable
principles being applied at the discretion of a court before which any
proceeding may be brought, and except as rights to indemnity and
contribution hereunder may be limited by or unenforceable under federal or
state securities laws.
(k) None of the issuance and sale of the Shares by the Company, the
execution, delivery or performance of this Agreement by the Company or the
consummation by the Company of the transactions contemplated hereby (i)
requires any consent, approval, authorization or other order of or
registration or filing with, any court, regulatory body, administrative
agency or other governmental body, agency or official (except such as may
be required for the registration of the Shares under the Act, the listing
of the Shares for trading on NASDAQ, and compliance with the securities or
Blue Sky laws of various jurisdictions, all of which will be, or have been,
effected in accordance with this Agreement and except for the NASD's
clearance of the underwriting terms of the offering contemplated hereby as
required under the NASD's Rules of Fair Practice), (ii) constitutes or will
constitute a breach of, or a default under, the Company's articles of
incorporation or the Company's code of regulations or any agreement,
indenture, lease or other instrument to which the Company or any of its
subsidiaries is a party or by which any of its properties may be bound,
(iii) violates any statute, law, regulation, ruling, filing, judgment,
injunction, order or decree applicable to the Company or any of its
subsidiaries or any of their properties, or (iv) results in a breach of, or
default under, or results in the creation or imposition of any lien, charge
or encumbrance upon any property or assets of the Company or any of its
subsidiaries pursuant to, or requires the consent of any other party to,
any Existing Instrument, except for such conflicts, breaches, defaults,
liens, charges or encumbrances that would not, individually or in the
aggregate, be reasonably likely to result in a Material Adverse Effect.
(l) Except as described in the Prospectus, neither the Company nor
any of its subsidiaries has outstanding and at the Closing Date and the
Additional Closing Date, as the case may be, will have outstanding any
options to purchase, or any warrants to subscribe for, or any securities or
obligations convertible into, or any contracts or commitments to issue or
sell, any
- 13 -
Common Shares or any such warrants or convertible securities or
obligations. No holder of securities of the Company has rights to the
registration of any securities of the Company, other than the Selling
Shareholder with respect to the Shares included in the Registration
Statement, as a result of or in connection with the filing of the
Registration Statement or the consummation of the transactions contemplated
hereby that have not been satisfied or heretofore waived in writing.
(m) PricewaterhouseCoopers LLP, the certified public accountants
who have certified the financial statements (including the related notes
thereto and supporting schedules) filed as part of the Registration
Statement and the Prospectus (or any amendment or supplement ;thereto), are
independent public accountants as required by the Act and the Exchange Act.
(n) The financial statements, together with related schedules and
notes, included in the Registration Statement and the Prospectus (and any
amendment or supplement thereto), present fairly in all material respects
the financial condition, results of operations, cash flows and changes in
financial position of the Company on the basis stated in the Registration
Statement at or as of the respective dates or for the respective periods to
which they apply; such statements and related schedules and notes have been
prepared in accordance with generally accepted accounting principles
consistently applied throughout the periods involved, except as disclosed
therein; and the other financial and statistical information and data set
forth in the Registration Statement and Prospectus (and any amendment or
supplement thereto) are accurately presented in all material respects and
prepared on a basis consistent with such financial statements and the books
and records of the Company. No other financial statements or schedules that
are not included in the Registration Statement are required to be included
in the Registration Statement.
(o) Except as disclosed in the Registration Statement and the
Prospectus (or any amendment or supplement thereto), subsequent to the
respective dates as of which such information is given in the Registration
Statement and the Prospectus (or any amendment or supplement thereto), (i)
neither the Company nor any of its subsidiaries has incurred any material
liabilities or obligations, indirect, direct or contingent, or entered into
any material transaction that is not in the ordinary course of business,
(ii) neither the Company nor any of its subsidiaries has sustained any
material loss or interference with its business or properties from fire,
flood, windstorm, accident or other calamity, whether or not covered by
insurance, (iii) neither the Company nor any of its subsidiaries has paid
or declared any dividends or other distributions with respect to its
capital stock and the Company is not in default under the terms of any
class of capital stock of the Company or any outstanding debt obligations,
(iv) there has not been any change in the authorized or outstanding capital
stock of the Company except for Permitted Share Issuances or any material
change in the indebtedness of the Company (other than in the ordinary
course of business) and (v) there has not been any material adverse change
or any development that would be reasonably likely to result in a Material
Adverse Effect, in the condition (financial or otherwise), business,
properties, net worth or result of operations of the Company.
(p) All offers and sales of the Company's capital stock and other
debt or other
- 14 -
securities prior to the date hereof were made in compliance with or were
the subject of an available exemption from the Act and all other
applicable state and federal laws or regulations, or any actions under the
Act or any state or federal laws or regulations in respect of any such
offers or sales are effectively barred by effective waivers or statutes of
limitation.
(q) The Common Shares (including the Shares) are registered
pursuant to Section 12(g) of the Exchange Act and are listed on the NASDAQ
National Market, and the Company has taken no action designed to, or
reasonably likely to have the effect of, terminating the registration of
the Common Shares under the Exchange Act or delisting the Common Shares
from the NASDAQ National Market, nor has the Company received any
notification that the Commission or the NASD is contemplating terminating
such registration or listing.
(r) The Company has not distributed and will not distribute, and
has not authorized the Underwriters to distribute, any offering material in
connection with the offering and sale of the Shares other than the
Preliminary Prospectus, the Prospectus or other offering material, if any,
as permitted by the Act.
(s) Other than excepted activity pursuant to Regulation M under the
Exchange Act, the Company has not taken and will not take, directly or
indirectly, any action that constituted, or any action designed to, or that
might reasonably be expected to cause or result in or constitute, under the
Act, stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the Shares or for any other
purpose.
(t) The Company and each of its subsidiaries have filed all tax
returns required to be filed (other than certain state or local tax
returns, as to which the failure to file, individually or in the aggregate,
would not have a Material Adverse Effect), which returns are complete and
correct in all material respects, and neither the Company nor any
subsidiary is in default in the payment of any taxes that were payable
pursuant to said returns or any assessments with respect thereto. Except as
disclosed in the Prospectus, all deficiencies asserted as a result of any
federal, state, local or foreign tax audits have been paid or finally
settled and no issue has been raised in any such audit that, by application
of the same or similar principles, reasonably could be expected to result
in a proposed deficiency for any other period not so audited. There are no
outstanding agreements or waivers extending the statutory period of
limitation applicable to any federal, state, local or foreign tax return
for any period. On the Closing Date and the Additional Closing Date, as the
case may be, all stock transfer and other taxes that are required to be
paid in connection with the sale of the Shares to be sold by the Company to
the Underwriters will have been fully paid by the Company and all laws
imposing such taxes will have been complied with.
(u) Except as set forth in the Prospectus, there are no
transactions with "affiliates" (as defined in Rule 405 promulgated under
the Act) or any officer, director or security holder of the Company
(whether or not an affiliate) that are required by the Act to be disclosed
in the Registration Statement. Additionally, no relationship, direct or
indirect, exists between the Company or any of its subsidiaries on the one
hand, and the directors, officers, shareholders,
- 15 -
customers or suppliers of the Company or any subsidiary on the other hand
that is required by the Act to be disclosed in the Registration Statement
and the Prospectus that is not so disclosed.
(v) The Company is not an "investment company" or an "affiliated
person" of, or "promoter" or "principal underwriter" for, an investment
company within the meaning of the Investment Company Act of 1940, as
amended.
(w) Each of the Company and its subsidiaries has good and valid
title to all property (real and personal) described in the Prospectus as
being owned by it, free and clear of all liens, claims, security interests
or other encumbrances except (i) such as are described in the Prospectus or
(ii) such as are not materially burdensome and would not be reasonably
likely to result in a Material Adverse Effect to the use of the property or
the conduct of the business of the Company. All property (real and
personal) held under lease by the Company and its subsidiaries is held by
it under valid, subsisting and enforceable leases with only such exceptions
as in the aggregate are not materially burdensome and would not be
reasonably likely to result in a Material Adverse Effect to the use of the
property or the conduct of the business of the Company.
(x) The Company has acquired title insurance with respect to each
of the properties described in the Prospectus as being owned by the Company
or its subsidiaries, except, in each case, where the failure to obtain or
maintain such title insurance would not be reasonably likely to have a
Material Adverse Effect.
(y) Each of the Company and its subsidiaries has all permits,
licenses, franchises, approvals, consents and authorizations of
governmental or regulatory authorities (hereinafter "permit" or "permits")
as are necessary to own its properties and to conduct its business in the
manner described in the Prospectus, subject to such qualifications as may
be set forth in the Prospectus, except where the failure to have obtained
any such permit has not had and would not be reasonably likely to have a
Material Adverse Effect; each of the Company and its subsidiaries has
operated and is operating its business in compliance with and not in
violation of any of its obligations with respect to each such permit and no
event has occurred that allows, or after notice or lapse of time would
allow, revocation or termination of any such permit or result in any other
material impairment of the rights of any such permit, subject in each case
to such qualification as may be set forth in the Prospectus, except for any
such violation, revocation, termination or impairment that, individually or
in the aggregate, would not reasonably be likely to result in a Material
Adverse Effect; and, except as described in the Prospectus, such permits
contain no restrictions that are materially burdensome to the Company or
any of its subsidiaries.
(z) The Company and its subsidiaries maintain a system of internal
accounting controls sufficient to provide reasonable assurances that (i)
transactions are executed in accordance with management's general or
specific authorizations, (ii) transactions are recorded as necessary to
permit preparation of financial statements in conformity with generally
accepted accounting principles and to maintain accountability for assets,
(iii) access to assets is permitted only in accordance with management's
general or specific authorizations and (iv) the recorded accountability for
assets is compared with existing assets at reasonable intervals and
appropriate
- 16 -
action is taken with respect to any differences.
(aa) Neither the Company nor any of its subsidiaries, since each
has been a subsidiary of the Company, nor, to the Company's knowledge, any
employee or agent of the Company or any of its subsidiaries, has, directly
or indirectly, (i) made any unlawful contribution to any candidate for
political office, or failed to disclose fully any contribution in violation
of law or (ii) made any payment to any federal, state, local or foreign
governmental official, or other person charged with similar public or
quasi-public duties, other than payments required or permitted by the laws
of the United States or any jurisdiction thereof or applicable foreign
jurisdictions.
(bb) The Company and its subsidiaries are (i) in compliance with
any and all applicable federal, state, local and foreign laws and
regulations relating to the protection of human health and safety, the
environment or hazardous or toxic substances or wastes, pollutants or
contaminants ("Environmental Laws"), (ii) have received all permits,
licenses or other approvals required of them under applicable Environmental
Laws to conduct their respective businesses and (iii) are in compliance
with all terms and conditions of any such permit, license or approval,
except where such noncompliance with Environmental Laws, failure to receive
required permits, licenses or other approvals or failure to comply with the
terms and conditions of such permits, licenses or other approvals would
not, individually or in the aggregate, be reasonably likely to have a
Material Adverse Effect. Neither the Company nor any of its subsidiaries
has been named as a "potentially responsible party" under the Comprehensive
Environmental Response Compensation and Liability Act of 1980, as amended.
Neither the Company nor any of its subsidiaries owns, leases or occupies
any property that appears on any list of hazardous sites compiled by any
state or local governmental agency.
(cc) Each of the Company and its subsidiaries owns and has full
right, title and interest in and to, or has valid licenses to use, each
material trade name, trademark, service xxxx, patent, copyright, approval,
trade secret and other similar rights (collectively "Intellectual
Property") under which the Company and its subsidiaries conduct all or any
material part of its business, and the Company has not created any lien or
encumbrance on, or granted any right or license with respect to, any such
Intellectual Property, except where the failure to own or obtain a license
or right to use any such Intellectual Property has not had and would not
reasonably be likely to have a Material Adverse Effect; there is no claim
pending against the Company or its subsidiaries with respect to any
Intellectual Property and the Company and its subsidiaries have not
received notice or otherwise become aware that any Intellectual Property
that it uses or has used in the conduct of its business infringes upon or
conflicts with the rights of any third party. Neither the Company nor any
of its subsidiaries has become aware that any material Intellectual
Property that it uses or has used in the conduct of its business has been
or is being infringed upon by any third party, except as previously
disclosed in writing to the Representatives.
(dd) The Company has procured Lock-Up Agreements, substantially in
the form of Exhibit A attached hereto, from each of the Company's executive
officers and directors and the Selling Shareholder.
- 17 -
(ee) Neither any officer or director of the Company nor the Selling
Shareholder has a direct or indirect affiliation or association with any
member of the NASD.
(ff) Each of the Company and its subsidiaries is insured by
insurers of recognized financial responsibility against such losses and
risks and in such amounts as the management of the Company believes are
prudent and customary in the businesses in which it is engaged; and neither
the Company nor any of its subsidiaries has received any notice that it
will not be able to renew its existing insurance coverage as and when such
coverage expires or to obtain similar coverage from similar insurers as may
be necessary to continue its business.
(gg) In the ordinary course of its business, the Company conducts a
periodic review of the effect of Environmental Laws on the business,
operations and properties of the Company and its subsidiaries, in the
course of which it identifies and evaluates associated costs and
liabilities (including any capital or operating expenditures required for
clean-up, closure of properties or compliance with Environmental Laws or
any permit, license or approval, any related constraints on operating
activities and any potential liabilities to third parties). On the basis of
such review and amount of its established reserves, the Company has
reasonably concluded that such associated costs and liabilities would not,
individually or in the aggregate, result in a Material Adverse Effect.
(hh) The Company and its subsidiaries and any "employee benefit
plan" (as defined under the Employee Retirement Income Security Act of
1974, as amended, and the regulations and published interpretations
thereunder (collectively, "ERISA")) established or maintained by the
Company, its subsidiaries or their "ERISA Affiliates" (as defined below)
are in compliance in all material respects with ERISA and all other
applicable state and federal laws. "ERISA Affiliate" means, with respect to
the Company or a subsidiary, any member of any group or organization
described in Sections 414(b), (c), (m) or (o) of the Code of which the
Company or such subsidiary is a member. No "reportable event" (as defined
in ERISA) has occurred or is reasonably expected to occur with respect to
any "employee benefit plan" established or maintained by the Company, its
subsidiaries or any of their ERISA Affiliates. No "employee benefit plan"
established or maintained by the Company, its subsidiaries or any of their
ERISA Affiliates, if such "employee benefit plan" were terminated, would
have any "amount of unfunded benefit liabilities" (as defined in ERISA).
None of the Company, its subsidiaries and their ERISA Affiliates has
incurred or reasonably expects to incur any liability under (i) Title IV of
ERISA with respect to termination of, or withdrawal from, any "employee
benefit plan" or (ii) Sections 412, 4971, 4975 or 4980B of the Code. Each
"employee benefit plan" established or maintained by the Company, its
subsidiaries or any of their ERISA Affiliates that is intended to be
qualified under Section 401(a) of the Code is so qualified and nothing has
occurred, whether by action or failure to act, that would cause the loss of
such qualification.
(ii) The Company and its subsidiaries have complied and will comply
in all material respects with wage and hour determinations issued by the
U.S. Department of Labor under the Service Contract Act of 1965 and the
Fair Labor Standards Act in paying its
- 18 -
employees' salaries, fringe benefits and other compensation for the
performance of work or other duties in connection with contracts with the
U.S. government, and have complied and will comply in all material respects
with the requirements of the Americans with Disabilities Act of 1990, the
Family and Medical Leave Act of 1993, the Civil Rights Act of 1964 (Title
VII), the National Labor Relations Act, the Vietnam Era Veteran's
Readjustment Act, the Age Discrimination in Employment Act, as amended by
the Older Workers' Benefit Protection Act, and federal, state and local
labor laws, each as amended except where the failure to comply with any
such requirements has not, and will not, have a Material Adverse Effect.
(jj) With respect to the Land Joint Ventures that the Company
manages, (i) each such managed Land Joint Venture is duly formed and in
full force and effect under the laws of its formation with full power and
authority, and holds all material permits under applicable law, to own,
lease and operate its properties and to conduct its business as presently
conducted, except where the failure to hold any such permit would not be
reasonably likely to result in a Material Adverse Effect; (ii) there are no
legal or governmental proceedings pending or, to the knowledge of the
Company, threatened, against any managed Land Joint Venture or to which any
such Land Joint Venture's properties are subject, that are required to be
described in the Registration Statement or the Prospectus (or any
supplement or amendment thereto) but are not described as required; (iii)
none of the managed Land Joint Ventures is (1) in violation of (A) its
organizational documents, (B) any law, ordinance, administrative or
governmental rule or regulation applicable to it or any of its properties,
or (C) any decree of any court or governmental agency or body having
jurisdiction over it, in each of (B) and (C) the violation of which would
be reasonably likely to have a Material Adverse Effect, or (2) in default
in the performance of any obligation, agreement or condition contained in
(A) any bond, debenture, note or any other evidence of indebtedness or (B)
any agreement, indenture, lease or other instrument to which it or any of
its properties may be bound, which default would be reasonably likely to
have a Material Adverse Effect; (iv) the Company owns its interests in the
managed Land Joint Ventures free and clear of any security interests,
liens, encumbrances, equities, claims or options or other rights of
purchase, except (1) such as are referred to in the Prospectus or (2) such
as are not materially burdensome and would not be reasonably likely to
result in a Material Adverse Effect; (v) none of the Land Joint Ventures
has incurred any material liabilities or obligations, indirect, direct or
contingent, or that could be asserted against the Company or any of the
Company's subsidiaries, that are required to be disclosed in the
Registration Statement or the Prospectus (or any supplements or amendments
thereto) but have not been disclosed as required; (vi) each managed Land
Joint Venture is in material compliance with all Environmental Laws, except
where such noncompliance would not be reasonably likely to result in a
Material Adverse Effect; and (vii) each of the managed Land Joint Ventures
has good and valid title to all property (real and personal) described in
the Prospectus as being owned by it, free and clear of all liens, claims,
security interests or other encumbrances, except (1) such as are referred
to in the Prospectus or (2) such as are not materially burdensome and would
not be reasonably likely to result in a Material Adverse Effect.
6.2 Concerning the Selling Shareholder. The Selling Shareholder hereby
represents and warrants to each Underwriter on the date hereof, and shall
be deemed to represent and warrant to each Underwriter on the Closing Date
and the Additional Closing Date, that:
- 19 -
(a) The Selling Shareholder is the lawful owner of the Shares to be
sold by the Selling Shareholder pursuant to this Agreement and has, and on
the Closing Date and the Additional Closing Date, as the case may be, will
have, good and valid title to such Shares, free of all restrictions on
transfer, liens, encumbrances, security interests, equities and claims
whatsoever.
(b) The Selling Shareholder has, and on the Closing Date and the
Additional Closing Date, as the case may be, will have, full legal right,
power and authority, and all authorization and approval required by law, to
enter into this Agreement.
(c) This Agreement has been duly authorized, executed and delivered
by the Selling Shareholder and is a valid and binding agreement of the
Selling Shareholder, enforceable as to the Selling Shareholder in
accordance with its terms, except to the extent enforceability may be
limited by (i) the application of bankruptcy, reorganization, insolvency
and other laws affecting creditors' rights generally and (ii) equitable
principles being applied at the discretion of a court before which a
proceeding may be brought, except as rights to indemnity and contribution
hereunder may be limited by or unenforceable under federal or state
securities laws.
(d) None of the sale of the Shares by the Selling Shareholder, the
execution, delivery or performance by the Selling Shareholder of this
Agreement, the compliance by the Selling Shareholder with all the
provisions hereof nor the consummation by the Selling Shareholder of the
transactions contemplated hereby (i) requires any consent, approval,
authorization or other order of, or registration or filing with, any court,
regulatory body or administrative agency or other governmental body, agency
or official (except such as may be required under the securities or Blue
Sky laws of the various states), (ii) conflicts with or will conflict with
or constitutes or will constitute a breach of or a default under, the
organizational documents of the Selling Shareholder or any material
agreement, indenture, lease or other instrument to which the Selling
Shareholder is a party or by which the Selling Shareholder or any property
of the Selling Shareholder is bound or (iii) violates any statute, law,
regulation, ruling, filing, judgment, injunction, order or decree
applicable to the Selling Shareholder or any property of the Selling
Shareholder.
(e) The information in the Prospectus under the caption "Certain
Information Regarding the Selling Shareholder" and "Principal and Selling
Shareholders" that specifically relates to the Selling Shareholder
(including the information concerning the Selling Shareholder's capital
structure, its beneficial ownership, the Close Corporation Agreement, its
transactions with the Company and the option to purchase Selling
Shareholder common shares held by Xx. Xxx Xxxxxxx) does not, and will not
on the Closing Date or the Additional Closing Date, if as the case may be,
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, in the light of the circumstances under which they were
made, not misleading.
- 20 -
(f) At any time prior to the Closing Date or the Additional Closing
Date, as the case may be, if there is any change in the information
referred to in Section 6.2(e) hereof, the Selling Shareholder will
immediately notify the Representatives of such change.
(g) Other than excepted activity pursuant to Regulation M under the
Exchange Act, the Selling Shareholder has not taken and will not take,
directly or indirectly, any action that constituted, or any action designed
to, or that might reasonably be expected to cause or result in or
constitute, under the Act, stabilization or manipulation of the price of
the Common Shares to facilitate the sale or resale of the Shares.
(h) Upon delivery of and payment for the Shares to be sold by the
Selling Shareholder pursuant to this Agreement, good and valid title to
such Shares will pass to the Underwriters, free of all restrictions on
transfer, liens, encumbrances, security interests, equities and claims
whatsoever.
(i) The Selling Shareholder does not have any registration or other
similar rights to have any equity or debt securities registered for sale by
the Company under the Registration Statement or included in the offering
contemplated by this Agreement, except for such rights as are being
exercised in the offering contemplated by this Agreement or such rights as
have been duly waived.
(j) The Selling Shareholder has delivered to you an unaudited
balance sheet of the Selling Shareholder as of March 31, 2002, which has
been prepared in accordance with the books and records of the Selling
Shareholder in accordance with generally accepted accounting principles
(except that the Selling Shareholder's investment in the Company is
accounted for under the equity method of accounting rather than
consolidated with and into the accounts of the Selling Shareholder and
except that required footnotes are lacking) and presents fairly the
financial condition of the Selling Shareholder as of the date thereof,
subject to normal year-end adjustments (which will not be material).
7. Expenses. Whether or not the transactions contemplated hereby are
consummated or this Agreement becomes effective or is terminated, the
Company and the Selling Shareholder, jointly and severally, agree to pay or
cause to be paid the following: (i) the fees, disbursements and expenses of
the Company's counsel and accountants in connection with the registration
of the Shares under the Act and all other expenses in connection with the
preparation, printing and filing of the Registration Statement and the
Prospectus and amendments and supplements thereto and the mailing and
delivering of copies thereof and of any Preliminary Prospectus to the
Underwriters and dealers; (ii) the printing and delivery (including
postage, air freight charges and charges for counting and packaging) of
such copies of the Registration Statement, the Prospectus and each
Preliminary Prospectus, and all amendments or supplements to any of them as
may be reasonably requested for use in connection with the offering and
sale of the Shares; (iii) consistent with the provisions of Section 5.1(f),
all reasonable expenses in connection with the qualification of the Shares
for offering and sale under state securities laws or Blue Sky laws,
including reasonable attorneys' fees and out-of-pocket expenses of the
counsel
- 21 -
for the Underwriters in connection therewith; (iv) the filing fees incident
to securing any required review by the NASD of the fairness of the terms
of the sale of the Shares and the reasonable fees and disbursements of the
Underwriters' counsel relating thereto; (v) the fees and expenses
associated with listing the Shares on the NASDAQ National Market; (vi) the
cost of preparing stock certificates; (vii) the costs and charges of the
Company's transfer agent or registrar; (viii) the cost of the tax stamps,
if any, in connection with the issuance and delivery of the Shares to the
respective Underwriters; (ix) all other fees, costs and expenses referred
to in Item 14 of the Registration Statement; and (x) the transportation,
lodging, graphics and other expenses incidental to the Company's
preparation for and participation in the "roadshow" for the offering
contemplated hereby. Except as provided in this Section 7 and in Section 8
hereof, the Underwriters shall pay their own expenses, including the fees
and disbursements of their counsel. In addition, in the event that the
proposed offering is terminated for the reasons set forth in Section 5.1(j)
hereof, the Company agrees to reimburse the Underwriters as provided in
Section 5.1(j).
8. Indemnification and Contribution. Subject to the limitations in this
paragraph below, the Company agrees to indemnify and hold harmless you and
each other Underwriter, the directors, officers, employees and agents of
each Underwriter, and each person, if any, who controls any Underwriter
within the meaning of Section 15 of the Act or Section 20 of the Exchange
Act from and against any and all losses, claims, damages, liabilities and
expenses, including reasonable costs of investigation and attorneys' fees
and expenses (collectively, "Damages") arising out of or based upon (i) any
untrue statement or alleged untrue statement of a material fact contained
in any Preliminary Prospectus or in the Registration Statement or the
Prospectus or in any amendment or supplement thereto, or any omission or
alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein (in the case of the
Prospectus, in light of the circumstances under which they were made) not
misleading, except to the extent that any such Damages arise out of or are
based upon an untrue statement or omission or alleged untrue statement or
omission that has been made therein or omitted therefrom in reliance upon
and in conformity with the information furnished in writing to the Company
by or on behalf of any Underwriter through you, or by or on behalf of the
Selling Shareholder, as the case may be, expressly for use in connection
therewith or (ii) any inaccuracy in or breach of the representations and
warranties of the Company contained herein or any failure of the Company to
perform its obligations hereunder or under law; provided, however, that
with respect to any untrue statement or omission made in any Preliminary
Prospectus, the indemnity agreement contained in this paragraph shall not
inure to the benefit of any Underwriter (or to the benefit of any person
controlling such Underwriter or to any officer, director, employee or agent
of any Underwriter) from whom the person asserting any such Damages
purchased the Shares concerned if both (A) a copy of the Prospectus was not
sent or given to such person at or prior to the written confirmation of the
sale of such Shares to such person as required by the Act and (B) the
untrue statement or omission in the Preliminary Prospectus was corrected in
the Prospectus. This indemnification shall be in addition to any liability
that the Company may otherwise have.
Subject to the limitations in this paragraph below, the Selling
Shareholder agrees to
- 22 -
indemnify and hold harmless you and each other Underwriter, the directors,
officers, employees and agents of each Underwriter, and each person, if
any, who controls any Underwriter within the meaning of Section 15 of the
Act or Section 20 of the Exchange Act from and against any and all Damages
arising out of or based upon (i) any untrue statement oralleged untrue
statement of a material fact contained in any Preliminary Prospectus or in
the Registration Statement or the Prospectus or in any amendment or
supplement thereto, or any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the
statements therein (in the case of the Prospectus, in light of the
circumstances under which they were made) not misleading, but only with
respect to the information furnished in writing by or on behalf of the
Selling Shareholder specifically for use the Registration Statement, the
Prospectus or any Preliminary Prospectus, or any amendment or supplement
thereto, or (ii) any inaccuracy in or breach of the representations and
warranties of the Selling Shareholder contained herein or any failure of
the Selling Shareholder to perform its obligations hereunder or under law;
provided, however, that with respect to any untrue statement or omission
made in any Preliminary Prospectus, the indemnity agreement contained in
this paragraph shall not inure to the benefit of any Underwriter (or to the
benefit of any person controlling such Underwriter or to any officer,
director, employee or agent of any Underwriter) from whom the person
asserting any such Damages purchased the Shares concerned if both (A) a
copy of the Prospectus was not sent or given to such person at or prior to
the written confirmation of the sale of such Shares to such person as
required by the Act and (B) the untrue statement or omission in the
Preliminary Prospectus was corrected in the Prospectus. This
indemnification shall be in addition to any liability that the Selling
Shareholder may otherwise have.
In addition to their other obligations under this Section 8, each of
the Company and the Selling Shareholder agrees that, as an interim measure
during the pendency of any claim, action, investigation, inquiry or other
proceeding arising out of or based upon any statement or omission, or any
inaccuracy in the representations and warranties of the Company or the
Selling Shareholder herein or failure to perform their respective
obligations hereunder, all as set forth in this Section 8, the party
against whom indemnification is being sought will reimburse each
Underwriter on a monthly basis for all reasonable legal or other
out-of-pocket expenses incurred in connection with investigating or
defending any such claim, action, investigation, inquiry or other
proceeding (to the extent documented by reasonably itemized invoices
therefor), notwithstanding the absence of a judicial determination as to
the propriety and enforceability of the obligation of the Company or the
Selling Shareholder to reimburse each Underwriter for such expenses and the
possibility that such payments might later be held to have been improper by
a court of competent jurisdiction. To the extent that any such interim
reimbursement payment is so held to have been improper, each Underwriter
shall promptly return it to the person(s) from whom it was received.
If any action or claim shall be brought against any Underwriter or any
person controlling any Underwriter in respect of which indemnity may be
sought against the Company and/or the Selling Shareholder, such Underwriter
or such controlling person shall promptly notify in writing the party(s)
against whom indemnification is being sought (the "indemnifying party" or
"indemnifying parties"), and such indemnifying party(s) shall assume the
defense thereof,
- 23 -
including the employment of counsel reasonably acceptable to such
Underwriter or such controlling person and the payment of all reasonable
fees of and expenses incurred by such counsel. Such Underwriter or any such
controlling person shall have the right to employ separate counsel in any
such action and participate in the defense thereof, but the fees and
expenses of such counsel shall be at the expense of such Underwriter or
such controlling person, unless (i) the indemnifying party(s) has (have)
agreed in writing to pay such fees and expenses, (ii) the indemnifying
party(s) has (have) failed to assume the defense and employ counsel
reasonably acceptable to the Underwriter or such controlling person or
(iii) the named parties to any such action (including any impleaded
parties) include both such Underwriter or such controlling person and the
indemnifying party(s), and such Underwriter or such controlling person
shall have been advised by its counsel that one or more legal defenses may
be available to the Underwriter that may not be available to the Company or
the Selling Shareholder, or that representation of such indemnified party
and any indemnifying party(s) by the same counsel would be inappropriate
under applicable standards of professional conduct (whether or not such
representation by the same counsel has been proposed) due to actual or
potential differing interests between them (in which case the indemnifying
party(s) shall not have the right to assume the defense of such action on
behalf of such Underwriter or such controlling person (but the Company and
the Selling Shareholder, as applicable, shall not be liable for the
reasonable fees and expenses of more than one counsel for the Underwriters
and such controlling persons combined)). The indemnifying party(s) shall
not be liable for any settlement of any such action effected without its
(their several) written consent, but if settled with such written consent,
or if there be a final judgment for the plaintiff in any such action, the
indemnifying party(s) agree(s) to indemnify and hold harmless any
Underwriter and any such controlling person from and against any loss,
claim, damage, liability or expense by reason of such settlement or
judgment, but in the case of a judgment only to the extent stated in the
first and second paragraph of this Section 8.
Each Underwriter agrees, severally and jointly, to indemnify and hold
harmless the Company and the Selling Shareholder, their respective
directors, their respective officers who sign the Registration Statement
and any person who controls the Company or the Selling Shareholder within
the meaning of Section 15 of the Act or Section 20 of the Exchange Act, to
the same extent as the foregoing several indemnity from the Company and the
Selling Shareholder to each Underwriter, but only with respect to
information furnished in writing by or on behalf of such Underwriter
through you expressly for use in the Registration Statement, the Prospectus
or any Preliminary Prospectus, or any amendment or supplement thereto. If
any action or claim shall be brought or asserted against the Company or the
Selling Shareholder, any of their respective directors, any of their
respective officers or any such controlling person based on the
Registration Statement, the Prospectus or any Preliminary Prospectus, or
any amendment or supplement thereto, and in respect of which indemnity may
be sought against any Underwriter pursuant to this paragraph, such
Underwriter shall have the rights and duties given to the Company and the
Selling Shareholder by the immediately preceding paragraph (except that if
the Company and the Selling Shareholder shall have assumed the defense
thereof such Underwriter shall not be required to do so, but may employ
separate counsel therein and participate in the defense thereof, but the
fees and expenses of such counsel shall be at such Underwriter's expense),
and the Company and the Selling Shareholder, their respective directors,
any such
- 24 -
officers and any such controlling persons, shall have the rights and
duties given to the Underwriters by the immediately preceding paragraph.
In any event, the Company or the Selling Shareholder will not, without
the prior written consent of the Representatives, settle or compromise or
consent to the entry of any judgment in any proceeding or threatened claim,
action, suit or proceeding in respect of which the indemnification may be
sought hereunder (whether or not a Representative or any person who
controls either of the Representatives within the meaning of Section 15 of
the Act or Section 20 of the Exchange Act is a party to such claim, action,
suit or proceeding) unless such settlement, compromise or consent includes
an unconditional release of all Underwriters and such controlling persons
from all liability arising out of such claim, action, suit or proceeding.
If the indemnification provided for in this Section 8 is unavailable or
insufficient for any reason whatsoever (other than because of the express
limitations contained in this Section 8) to an indemnified party in respect
of any Damages referred to herein, then an indemnifying party, in lieu of
indemnifying such indemnified party, shall contribute to the amount paid or
payable by such indemnified party as a result of such Damages (i) in such
proportion as is appropriate to reflect the relative benefits received by
the Company, the Selling Shareholder and the Underwriters,respectively,
from the offering and sale of the Shares or (ii) if the allocation provided
by clause (i) above is not permitted by applicable law, in such proportion
as is appropriate to reflect not only the relative benefits referred to in
clause (i) above but also the relative and several fault of the Company,
the Selling Shareholder and the Underwriters, respectively, in connection
with the statements or omissions that resulted in such Damages as well as
any other relevant equitable considerations. The relative and several
benefits received by the Company, the Selling Shareholder and the
Underwriters, respectively, shall be deemed to be in the same proportion as
the total net proceeds from the offering (before deducting expenses)
received by the Company and the Selling Shareholder, respectively, bears 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; provided that, in the event that the Underwriters shall
have purchased any Additional Shares hereunder, any determination of the
relative benefits received by the Company, the Selling Shareholder or the
Underwriters, respectively, from the offering of the Shares shall include
the net proceeds (before deducting expenses) received by the Company and
the Selling Shareholder, respectively, and the underwriting discounts and
commissions received by the Underwriters, from the sale of such Additional
Shares, in each case computed on the basis of the respective amounts set
forth in the notes to the table on the cover page of the Prospectus. The
relative fault of the Company, the Selling Shareholder and the Underwriters
shall be determined by reference to, among other things, whether the untrue
or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the
Company, the Selling Shareholder or the Underwriters and the parties'
relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission.
The Company, the Selling Shareholder and the Underwriters agree that
it would not be just and equitable if contribution pursuant to this
Section 8 was determined by a pro rata
- 25 -
allocation (even if the Underwriters were treated as one entity for
such purpose) or by any other method of allocation that does not take into
account the equitable considerations referred to in the immediately
preceding paragraph. The amount paid or payable by an indemnified party as
a result of the Damages referred to in the immediately preceding paragraph
shall be deemed to include, subject to the limitations set forth above, any
reasonable legal or other expenses incurred by such indemnified party in
connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 8, no Underwriter shall be
required to contribute any amount in excess of the amount of the
underwriting commissions received by such underwriter in connection with
the Shares underwritten by it and distributed to the public, and the
Selling Shareholder shall not be required to contribute any amount in
excess of the gross proceeds received by it from the sale of Shares. 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 pursuant to this Section 8 are several in
proportion to the respective numbers of Firm Shares set forth opposite
their names in Schedule I hereto (or such numbers of Firm Shares increased
as set forth in Section 10 hereof) and not joint.
Notwithstanding the third paragraph of this Section 8, any Damages for
which an indemnified party is entitled to indemnification or contribution
under this Section 8 shall be paid by the indemnifying party to the
indemnified party as Damages are incurred after receipt of reasonably
itemized invoices therefor. The indemnity, contribution and reimbursement
agreements contained in this Section 8 and the representations and
warranties of the Company and the Selling Shareholder set forth in this
Agreement shall remain operative and in full force and effect, regardless
of (i) any investigation made by or on behalf of any Underwriter or any
person controlling any Underwriter, the Company, the Selling Shareholder,
their respective directors or officers or any person controlling the
Company or the Selling Shareholder, (ii) acceptance of any Shares and
payment therefor hereunder and (iii) any termination of this Agreement. A
successor to any Underwriter or any person controlling any Underwriter, or
to the Company or the Selling Shareholder, their respective directors or
officers or any person controlling the Company or the Selling Shareholder,
shall be entitled to the benefits of the indemnity, contribution and
reimbursement agreements contained in this Section 8.
9. Conditions of Underwriters' Obligations. The several obligations of
the Underwriters to purchase the Firm Shares hereunder are subject to the
following conditions:
(a) The Registration Statement shall have become effective not
later than 12:00 noon, New York City time, on the date hereof, or at such
later date and time as shall be consented to in writing by the
Representatives, and all filings required by Rules 424(b), 430A and 462
under the Act shall have been timely made.
(b) You shall be reasonably satisfied that since the respective
dates as of which information is given in the Registration Statement and
Prospectus, (i) there shall not have been any change in the authorized or
outstanding capital stock of the Company except for Permitted Share
Issuances or any material change in the indebtedness of the Company (other
than
- 26 -
in the ordinary course of business), (ii) except as set forth or
contemplated by the Registration Statement or the Prospectus, no material
oral or written agreement or other transaction shall have been entered into
by the Company that would reasonably be likely to result in a material
reduction in the future earnings of the Company, (iii) no loss or damage
(whether or not insured) to the property of the Company shall have been
sustained that had or could reasonably be likely to have a Material Adverse
Effect, (iv) there shall not have been instituted or threatened any legal
or governmental action, suit or proceeding affecting the Company or any of
its properties that would reasonably be likely to result in a Material
Adverse Effect or that materially and adversely affects or would reasonably
be likely to materially and adversely affect the transactions contemplated
by this Agreement and (v) there shall not have been any materially adverse
change in the condition (financial or otherwise), business, results of
operations or prospects of the Company or its subsidiaries, taken as a
whole, that makes it impractical or inadvisable in your reasonable judgment
to proceed with the public offering or purchase of the Shares as
contemplated hereby.
(c) You shall have received on the Closing Date (and the Additional
Closing Date, if any) an opinion of Vorys, Xxxxx, Xxxxxxx and Xxxxx LLP,
counsel to the Company, substantially to the effect that:
(i) The Company is a corporation duly incorporated and validly
existing in good standing under the laws of the State of Ohio, with
full corporate power and authority to own, lease and operate its
properties and to conduct its business as described in the
Registration Statement and the Prospectus (and any amendment or
supplement thereto).
(ii) Each of the Company's subsidiaries is a limited liability
company or limited partnership duly formed and in full force and
effect under the laws of the jurisdiction of its organization or
formation, with full power and authority under the applicable limited
liability company or limited partnership statute and its
organizational documents, to own, lease and operate its properties and
to conduct its business as described in the Registration Statement and
the Prospectus (and any amendment or supplement thereto; and all of
the outstanding membership interests or partnership interests of each
of the subsidiaries have been duly authorized and validly issued, and
are fully paid and nonassessable, and are owned by the Company
directly, or indirectly through one of the other subsidiaries, free
and clear of any perfected security interest.
(iii) The authorized capital stock of the Company conforms in
all material respects to the description thereof contained in the
Prospectus under the caption "Capitalization" and the Shares conform
in all material respects to the description of the Common Shares in
the Prospectus.
(iv) All shares of capital stock of the Company outstanding
prior to the issuance of the Shares to be issued and sold by the
Company hereunder, including the Common Shares owned by the Selling
Shareholder, have been duly authorized and
- 27 -
validly issued, are fully paid and nonassessable and are free of any
preemptive or similar rights that entitle or will entitle any person
to acquire any Shares upon the issuance thereof by the Company, and no
such rights will exist as of the Closing Date.
(v) To such counsel's knowledge, all offers and sales of the
Company's securities have been made in compliance in all material
respects with the registration requirements of the Act and other
applicable state securities laws or regulations or applicable
exemptions from such registration requirements.
(vi) To such counsel's knowledge, neither the Company nor any
of its subsidiaries is in violation of its certificate or articles of
incorporation or organization or bylaws or code of regulations or
limited partnership or operating agreement, or other organizational
documents, and is not in default in the performance of any obligation,
agreement or condition contained in any bond, indenture, note or other
evidence of indebtedness or any other agreement or obligation of the
Company, where the default, individually or in the aggregate, would be
reasonably likely to have a Material Adverse Effect.
(vii) Neither the offer, sale or delivery of the Shares by the
Company, the execution, delivery or performance by the Company of this
Agreement, compliance by the Company with all provisions hereof nor
consummation by the Company of the transactions contemplated hereby
(A) conflicts or will conflict with or constitutes or will constitute
a breach of, or a default under, or creates or will result in the
creation or imposition of any lien, charge or encumbrance upon any
property or assets of the Company under, the articles of incorporation
or code of regulations of the Company or any agreement, indenture,
lease or other instrument to which the Company is a party or by which
any of its properties is bound and which is identified in the Index of
Exhibits contained in Part II of the Registration Statement, or (B)
violates or will result in any violation of any existing law, statute,
regulation, ruling (assuming compliance with all applicable state
securities and Blue Sky laws), judgment, injunction, order or decree
that is known by such counsel to be applicable to the Company or any
of its properties.
(viii) To such counsel's knowledge, there is no action, suit,
inquiry, proceeding, or investigation by or before any court or
governmental or other regulatory or administrative agency or
commission pending or threatened against or involving the Company or
its subsidiaries, or the properties of either the Company or any of
its subsidiaries: (A) which might individually or in the aggregate
prevent or adversely affect the transactions contemplated by this
Agreement or would be reasonably likely to result in a Material
Adverse Effect; or (B) that are required to be described in the
Registration Statement or Prospectus (or any amendment or supplement
thereto) that are not described as required therein.
(ix) Such counsel has reviewed all agreements, contracts,
indentures, leases or other documents or instruments described or
referred to in the Registration
- 28 -
Statement and the Prospectus, and, to the extent required to be
summarized or disclosed, such agreements, contracts (and forms of
contracts), indentures, leases or other documents or instruments are
fairly summarized or disclosed in all material respects therein, and
filed as exhibits thereto as required, and to such counsel's
knowledge, there are no agreements, contracts, indentures, leases or
other documents or instruments required to be so summarized or
disclosed or filed that have not been so summarized or disclosed or
filed.
(x) No consent, approval, authorization or other order of, or
registration or filing with, any court, regulatory body,
administrative agency or other governmental body, agency or official
is required on the part of the Company (except such as have been
obtained under the Act or such as may be required under state
securities or Blue Sky laws governing the purchase and distribution of
the Shares) for the valid issuance and sale of the Shares to the
Underwriters under this Agreement.
(xi) The Company satisfies all of the requirements of the Act
for use of Form S-2 for the offering of Shares contemplated by this
Agreement.
(xii) The form of certificate used to evidence the Common
Shares is in due and proper form and complies with all applicable
requirements of the articles of incorporation and code regulations of
the Company and the General Corporation Law of the State of Ohio.
(xiii) The Company has all requisite corporate power and
authority to enter into this Agreement and to issue, sell and deliver
the Shares to be sold by it to the Underwriters as provided herein.
This Agreement has been duly authorized, executed and delivered by,
and is a valid and binding agreement of the Company, enforceable
against the Company in accordance with its terms, except as to the
extent enforceability may be limited by (i) the application of
bankruptcy, reorganization, insolvency or other laws affecting
creditors' rights generally and (ii) equitable principles being
applied at the discretion of a court before which any proceeding may
be brought, and except as rights to indemnity and contribution
hereunder may be limited by federal or state securities laws or other
public policy considerations.
(xiv) The Shares to be issued and sold to the Underwriters by
the Company hereunder have been duly authorized and, when issued and
delivered to the Underwriters against payment therefor in accordance
with the terms hereof, (A) such Shares will be validly issued, fully
paid and nonassessable and free of any preemptive or similar rights
that entitle or will entitle any person to acquire any Shares upon the
issuance thereof by the Company and (B) good and valid title to such
Shares, free and clear of any claim, encumbrance or defect in title of
any nature (other than any arising by or through the Underwriters),
will pass to each Underwriter that has purchased any portion of such
Shares in good faith and without knowledge of any such claim,
encumbrance or defect.
- 29 -
(xv) To such counsel's knowledge, no stop order suspending the
effectiveness of the Registration Statement has been issued under the
Act and no proceedings for such purpose have been instituted or are
pending or are contemplated or threatened by the Commission. Any
required filing of the Prospectus and any supplement thereto pursuant
to Rule 424(b) under the Act has been made in the manner and within
the time period required by such Rule 424(b).
(xvi) The Registration Statement, including any Rule 462
Registration Statement, the Prospectus, including any document
incorporated by reference therein, and each amendment or supplement to
the Registration Statement and the Prospectus, including any document
incorporated by reference therein, as of their respective effective or
issue dates (other than the financial statements and supporting
schedules included or incorporated by reference therein or in exhibits
to or excluded from the Registration Statement, as to which no opinion
need be given) comply as to form in all material respects with the
requirements of the Act.
(xvii) The descriptions in the Prospectus of statutes,
regulations, legal or governmental proceedings, and the Company's
articles of incorporation and code of regulations, insofar as they
purport to summarize certain of the provisions thereof, are accurate
in all material respects and fairly present the information required
to be presented by the Act and the published rules and regulations
thereunder.
(xviii) The Company is not an "investment company" or an
"affiliated person" of, or "promoter" or "principal investor" for, an
"investment company," as such terms are defined in the Investment
Company Act of 1940, as amended.
In rendering such opinion, counsel may rely, to the extent they deem such
reliance proper, as to matters of fact upon certificates of officers of the
Company and of government officials, provided that counsel shall state their
belief that they and you are justified in relying thereon. Copies of all such
certificates shall be furnished to you and your counsel on the Closing Date and
the Additional Closing Date, as the case may be. In rendering the opinion
contained in paragraph (xiii), such counsel may assume that the laws of the
State of Florida that purport to govern this Agreement are the same as the laws
of the State of Ohio in all respects material to such opinion. As to matters of
Kentucky law, counsel may rely on the opinion of a firm licensed to practice law
in the State of Kentucky reasonably acceptable to the Representatives or, in the
alternative, may have such firm render such opinion to the Representatives
directly.
In addition to the opinion set forth above, such counsel shall state that
during the course of its participation in the preparation of the Registration
Statement and the Prospectus and the amendments thereto, nothing has come to the
attention of such counsel that has caused it to believe or given it reason to
believe that the Registration Statement or the Prospectus, including
- 30 -
any document incorporated by reference therein, or any amendment thereto
(except for the financial statements and other financial, statistical and
accounting information contained therein or omitted therefrom as to which no
opinion need be expressed), at the date thereof, 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
Registration Statement or the Prospectus, including any document incorporated by
reference therein, as of the date of the opinion (except as aforesaid), contains
an untrue statement of a material fact or omits to state a material fact
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading.
(d) You shall have received on the Closing Date (and the Additional
Closing Date, if any) an opinion of Vorys, Xxxxx, Xxxxxxx and Xxxxx LLP,
counsel to the Selling Shareholder, substantially to the effect that:
(i) The Selling Shareholder has all requisite corporate power
and authority to enter into this Agreement and to sell and deliver the
Shares to be sold by it to the Underwriters as provided herein. This
Agreement has been duly authorized, executed and delivered by, and is
a valid and binding agreement of, the Selling Shareholder enforceable
against the Selling Shareholder in accordance with its terms, except
to the extent enforceability may be limited by (i) bankruptcy,
reorganization, insolvency or other laws affecting enforcement of
creditors' rights generally and (ii) equitable principles being
applied at the discretion of a court before which any proceeding may
be brought, and except as rights to indemnity and contribution
hereunder may be limited by federal or state securities laws or other
public policy considerations.
(ii) The Selling Shareholder is the sole registered owner of
the Shares to be sold to the Underwriters by the Selling Shareholder,
and, assuming that the Underwriters acquire their interests therein
for value and without knowledge of any adverse claim to, or
restriction on transfer of, such Shares, and that any certificate or
certificates evidencing such Shares are delivered to the Underwriters
in the State of Ohio and are duly indorsed to the Underwriters or in
blank by an effective indorsement, the Underwriters will constitute
"Protected Purchasers" for purposes of Ohio Revised Code Section
1308.17 and will acquire all rights in such Shares that the Selling
Shareholder has or has the power to transfer, free of any adverse
claim, any lien in favor of the Company and any transfer restrictions
imposed by the Company.
(iii) Neither the offer, sale or delivery of the Shares by the
Selling Shareholder, the execution, delivery or performance by the
Selling Shareholder of this Agreement, compliance by the Selling
Shareholder with all provisions hereof nor consummation by the Selling
Shareholder of the transactions contemplated hereby (A) conflicts or
will conflict with or constitutes or will constitute a breach of, or a
default under, or creates or will result in the creation or imposition
of any lien, charge or encumbrance upon any property or assets of the
Selling Shareholder, under the articles of incorporation or code of
regulations of the Selling Shareholder, or any agreement,
- 31 -
indenture, lease or other instrument to which the Selling Shareholder
is a party or by which any of its properties is bound and which is
identified in a schedule heretofore provided to the Underwriters, or
(B) violates or will result in any violation of any existing law,
statute, regulation, ruling (assuming compliance with all applicable
state and securities and Blue Sky laws), judgment, injunction, order
or decree that is known by such counsel to be applicable to the
Selling Shareholder or any of its properties.
(iv) No consent, approval, authorization or other order of, or
registration or filing with, any court, regulatory body,
administrative agency or other governmental body, agency or official
is required on the part of the Selling Shareholder (except such as
have been obtained under the Act or such as may be required under
state securities or Blue Sky laws governing the purchase and
distribution of the Shares) for the valid sale of the Shares to the
Underwriters by the Selling Shareholder under this Agreement.
(v) The statements in the Prospectus under the captions
"Certain Information Regarding the Selling Shareholder," insofar as
such statements concern matters of law, summaries of legal matters,
provisions of the Selling Shareholder's articles of incorporation or
code of regulations, documents or legal proceedings, or legal
conclusions, have been reviewed by such counsel and fairly present and
summarize, in all material respects, the matters referred to therein.
In rendering such opinion, counsel may rely, to the extent they
deem such reliance proper, as to matters of fact upon certificates of officers
of the Selling Shareholder and of government officials, provided that counsel
shall state their belief that they and you are justified in relying thereon.
Copies of all such certificates shall be furnished to you and your counsel on
the Closing Date and the Additional Closing Date, as the case may be. In
rendering the opinion contained in paragraph (i), such counsel may assume that
the laws of the State of Florida that purport to govern this Agreement are the
same as the laws of the State of Ohio in all respects material to such opinion.
(e) You shall have received on the Closing Date or Additional
Closing Date, as the case may be, an opinion of Xxxxxx & Bird LLP, as counsel
for the Underwriters, dated the Closing Date or Additional Closing Date, as the
case may be, with respect to the issuance and sale of the Shares, the
Registration Statement and other related matters as you may reasonably request,
and the Company and its counsel shall have furnished to your counsel such
documents as they may reasonably request for the purpose of enabling them to
pass upon such matters.
(f) You shall have received letters addressed to you and dated the
date hereof and the Closing Date or the Additional Closing Date, as the case may
be, from (i) the firm of PricewaterhouseCoopers LLP, independent certified
public accountants and (ii) the Chief Financial Officer of the Company,
substantially in the forms heretofore approved by you.
(g) (i) No stop order suspending the effectiveness of the
Registration
- 32 -
Statement shall have been issued by the Commission and no proceedings for that
purpose shall be pending or, to the knowledge of the Company, shall be
threatened or contemplated by the Commission at or prior to the Closing Date
or Additional Closing Date, as the case may be; (ii) no order suspending the
effectiveness of the Registration Statement or the qualification or
registration of the Shares under the securities or Blue Sky laws of any
jurisdiction shall be in effect and no proceeding for such purpose shall be
pending or, to the knowledge of the Company, threatened or contemplated by the
authorities of any jurisdiction; (iii) any request for additional information on
the part of the staff of the Commission or any such authorities shall have been
complied with to the satisfaction of the staff of the Commission or such
authorities; (iv) after the date hereof, no amendment or supplement to the
Registration Statement or the Prospectus shall have been filed unless a copy
thereof was first submitted to you and you did not object thereto in good faith;
and (v) all of the representations and warranties of the Company contained in
this Agreement shall be true and correct in all material respects (except for
such representations and warranties qualified by materiality, which
representations and warranties shall be true and correct in all respects) on and
as of the date hereof and on and as of the Closing Date or Additional Closing
Date, as the case may be, as if made on and as of the Closing Date or Additional
Closing Date, as the case may be, and you shall have received a certificate,
dated the Closing Date and signed by the chief executive officer and the chief
financial officer of the Company (or such other officers as are acceptable to
you) to the effect set forth in this Section 9(g) and in Sections 9(b) and 9(i)
hereof.
(h) The Company shall not have failed in any material respect at or
prior to the Closing Date or the Additional Closing Date, as the case may be, to
have performed or complied with any of its agreements herein contained and
required to be performed or complied with by it hereunder at or prior to the
Closing Date or Additional Closing Date, as the case may be.
(i) The Company shall have furnished or caused to have been furnished
to you such further certificates and documents as you shall have reasonably
requested.
(j) At or prior to the Closing Date, you shall have received the
written commitment Lock-Up Agreements from each of the Company's executive
officers and directors and the Selling Shareholder not to directly or indirectly
(i) sell, offer or contract to sell or otherwise dispose of or transfer any
shares of Company Securities, whether now owned or acquired after the date of
the Prospectus or with respect to which the power of disposition is acquired
after the date of the Prospectus, or file any registration statement under the
Act with respect to the foregoing or (ii) enter into any swap or other agreement
or any other agreement that transfers, in whole or in part, directly or
indirectly, the economic consequences of ownership of Company Securities whether
any such swap or transaction is to be settled by delivery of Company Securities,
in cash or otherwise; other than as provided in such written commitment before
the expiration of 180 days from the Closing Date, without the prior written
consent of Xxxxxxx Xxxxx & Associates, Inc.
(k) At or prior to the effective date of the Registration Statement,
you shall
- 33 -
have received a letter from the Corporate Financing Department of the NASD
confirming that such Department has determined to raise no objections with
respect to the fairness or reasonableness of the underwriting terms and
arrangements of the offering contemplated hereby.
(l) You shall be satisfied that, and you shall have received a
certificate dated the Closing Date or Additional Closing Date, as the case may
be, from the Selling Shareholder to the effect that, as of the Closing Date or
Additional Closing Date, as the case may be: (i) the representations and
warranties made by the Selling Shareholder herein are true and correct in all
material respect on the Closing Date and (ii) the Selling Shareholder has
complied with all obligations and satisfied all conditions that are required to
be performed or satisfied on his or its part at or prior to the Closing Date or
Additional Closing Date, as the case may be.
All such opinions, certificates, letters and other documents will be in
compliance with the provisions hereof only if they are reasonably satisfactory
in form and substance to you and your counsel.
The several obligations of the Underwriters to purchase Additional
Shares hereunder are subject to the satisfaction on and as of the Additional
Closing Date of the conditions set forth in this Section 9, except that, if the
Additional Closing Date is other than the Closing Date, the certificates,
opinions and letters referred to in this Section 9 shall be dated as of the
Additional Closing Date and the opinions called for by paragraphs (c),(d) and
(e) shall be revised to reflect the sale of Additional Shares.
If any of the conditions hereinabove provided for in this Section 9
shall not have been satisfied when and as required by this Agreement, this
Agreement may be terminated by you by notifying the Company of such termination
in writing or by telegram at or prior to such Closing Date, but you shall be
entitled to waive any of such conditions.
10. Effective Date of Agreement. This Agreement shall become effective
upon the later of (a) the execution and delivery hereof by the parties hereto
and (b) release of notification of the effectiveness of the Registration
Statement by the Commission; provided, however, that the provisions of Sections
7 and 8 shall at all times be effective.
11. Defaulting Underwriters. If any one or more of the Underwriters
shall fail or refuse to purchase Firm Shares that it or they have agreed to
purchase hereunder, and the aggregate number of Firm Shares that such defaulting
Underwriter or Underwriters agreed but failed or refused to purchase is not more
than one-tenth of the aggregate number of the Firm Shares, each non-defaulting
Underwriter shall be obligated, severally, in the proportion in which the number
of Firm Shares set forth opposite its name in Schedule I hereto bears to the
aggregate number of Firm Shares set forth opposite the names of all
non-defaulting Underwriters or in such other proportion as you may specify in
the Agreement Among Underwriters, to purchase the Firm Shares that such
defaulting Underwriter or Underwriters agreed, but failed or refused to
purchase. If any Underwriter or Underwriters shall fail or refuse to purchase
Firm Shares and the aggregate number of Firm Shares with respect to which such
default occurs is more than one-tenth
- 34 -
of the aggregate number of Firm Shares and arrangements satisfactory to you and
the Company for the purchase of such Firm Shares are not made within 48 hours
after such default, this Agreement will terminate without liability on the part
of any non-defaulting Underwriter or the Company. In any such case that does not
result in termination of this Agreement, either you or the Company shall have
the right to postpone the Closing Date, but in no event for longer than seven
days, in order that the required changes, if any, in the Registration Statement
and the Prospectus or any other documents or arrangements may be effected. Any
action taken under this paragraph shall not relieve any defaulting Underwriter
from liability in respect of any such default of any such Underwriter under this
Agreement.
12. Termination of Agreement. This Agreement shall be subject to
termination in your absolute discretion, without liability on the part of any
Underwriter to the Company by notice to the Company, if prior to the Closing
Date or the Additional Closing Date (if different from the Closing Date and then
only as to the Additional Shares), as the case may be, in your sole judgment,
(i) trading in the Common Shares shall have been suspended by the Commission or
NASDAQ, (ii) trading in securities generally on the New York Stock Exchange or
NASDAQ shall have been suspended or materially limited, or minimum or maximum
prices shall have been generally established on such exchange, or additional
material governmental restrictions, not in force on the date of this Agreement,
shall have been imposed upon trading in securities generally by any such
exchange or by order of the Commission or any court or other governmental
authority, (iii) a general moratorium on commercial banking activities shall
have been declared by either federal or New York State authorities or (iv) there
shall have occurred any outbreak or escalation of hostilities or other
international or domestic calamity or terrorist attack, crisis or change in
political, financial or economic conditions or other material event the effect
of which on the financial markets of the United States is such as to make it, in
your reasonable judgment, impracticable or inadvisable to market the Shares or
to enforce contracts for the sale of the Shares. Notice of such cancellation
shall be promptly given to the Company and its counsel by telegraph, telecopy or
telephone and shall be subsequently confirmed by letter.
13. Failure of the Selling Shareholder to Sell and Deliver the Shares.
If the Selling Shareholder shall fail to sell and deliver to the Underwriters
the Shares to be sold and delivered by the Selling Shareholder at the Closing
Date pursuant to this Agreement, then the Underwriters may at their option, by
written notice from the Representatives to the Company and the Selling
Shareholder, either (i) terminate this Agreement without any liability on the
part of any Underwriter or, except as provided in Sections 7 and 8 hereof, the
Company or the Selling Shareholder or (ii) purchase the Shares that the Company
has agreed to sell and deliver in accordance with the terms hereof. If the
Selling Shareholder shall fail to sell and deliver to the Underwriters the
Shares to be sold and delivered by the Selling Shareholder pursuant to this
Agreement at the Closing Date or Additional Closing Date, then the Underwriters
shall have the right, by written notice from the Representatives to the Company
and the Selling Shareholder, to postpone the Closing Date or the Additional
Closing Date, as the case may be, but in no event for longer than seven days in
order that the required changes, if any, to the Registration Statement and the
Prospectus or any other documents or arrangements may be effected.
- 35 -
14. Information Furnished by the Underwriters and the Selling
Shareholder. The Company and the Selling Shareholder acknowledge that (i) the
last paragraph on the cover page of the Prospectus regarding delivery of the
Shares and (ii) the list of Underwriters and their respective participation in
the sale of the Shares, the sentences related to the concession and reallowance
and the three paragraphs related to stabilizing transactions and penalty bids
under the caption "Underwriting" in the Prospectus constitute the only
information furnished by or on behalf of the Underwriters through you or on your
behalf as such information is referred to in Sections 6.1(a), 6.1(b) and 8
hereof. The Company and the Underwriters acknowledge that the information in the
Prospectus under the captions "Certain Information Regarding the Selling
Shareholder" and "Principal and Selling Shareholders" that specifically relates
to the Selling Shareholder constitutes the only information furnished by or on
behalf of the Selling Shareholder through you or on your behalf as such
information is referred to in Sections 6.1(a), 6.1(b) and 8 hereof.
15. Miscellaneous. Except as otherwise provided in Sections 5 and 12
hereof, notice given pursuant to any of the provisions of this Agreement shall
be in writing and shall be delivered
(i) to the Company
Dominion Homes, Inc.
0000 Xxxxxx Xxxx
Xxxxxx, Xxxx 00000-0000
Attention: Xxxxxxx X. Xxxxxx
with a copy to
Vorys, Xxxxx, Xxxxxxx and Xxxxx LLP
00 Xxxx Xxx Xxxxxx
Xxxxxxxx, Xxxx 00000
Attention: Xxxxxxx X. Xxxxx
(ii) to the Selling Shareholder
BRC Properties Inc.
0000 Xxxxxx Xxxx
Xxxxxx, Xxxx 00000-0000
Attention: Xxxxx X. Xxxxxx
with a copy to
Vorys, Xxxxx, Xxxxxxx and Xxxxx LLP
00 Xxxx Xxx Xxxxxx
Xxxxxxxx, Xxxx 00000
- 36 -
Attention: Xxxxxxx X. Xxxxx
(iii) to the Underwriters
Xxxxxxx Xxxxx & Associates, Inc.
000 Xxxxxxxx Xxxxxxx
Xx. Xxxxxxxxxx, Xxxxxxx 00000
Attention: Vivek Seth
with a copy to
Xxxxxx & Bird LLP
0000 Xxxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Xxxx X. Xxxxxxx
This Agreement has been and is made solely for the benefit of the
several Underwriters, the Company and its directors and officers and the Selling
Shareholder.
15. Letter of Intent Right of First Refusal. The Company hereby
confirms and agrees to be bound by the provisions of paragraph 9 contained in
the engagement letter dated April 25, 2002, entered into between the Company and
Xxxxxxx Xxxxx & Associates, Inc.
16. Applicable Law; Counterparts. This Agreement shall be governed by
and construed in accordance with the laws of the State of Florida without
reference to choice of law principles thereunder.
This Agreement may be signed in various counterparts, which together
shall constitute one and the same instrument.
This Agreement shall be effective when, but only when, at least one
counterpart hereof shall have been executed on behalf of each party hereto.
The Company, the Selling Shareholder and the Underwriters each hereby
irrevocably waives any right it may have to a trial by jury in respect to any
claim based upon or arising out of this Agreement or the transactions
contemplated hereby.
- 37 -
Please confirm that the foregoing correctly sets forth the agreement
among the Company, the Selling Shareholder and the several Underwriters.
Very truly yours,
Dominion Homes, Inc.
-----------------------------------
Xxx X. Xxxxxxx, President and
Chief Operating Officer
BRC Properties Inc.
-----------------------------------
Xxxxx X. Xxxxxx, President
CONFIRMED as of the date first above
mentioned, on behalf of the Representatives
and the other several Underwriters named in
Schedule I hereto.
XXXXXXX XXXXX & ASSOCIATES, INC.
By:
----------------------------------
Authorized Representative
XXXX XXXXX XXXX XXXXXX, INCORPORATED
By:
----------------------------------
Authorized Representative
- 38 -
SCHEDULE I
Number
Name Firm Shares
----------------------------------- -------------
Total: ___________
- 39 -
EXHIBIT A
_______, 2002
[NAME AND ADDRESS OF SECURITYHOLDER]
XXXXXXX XXXXX & ASSOCIATES, INC.
XXXX XXXXX XXXX XXXXXX, INCORPORATED
As Representatives of the Several Underwriters
c/o Raymond Xxxxx & Associates, Inc.
000 Xxxxxxxx Xxxxxxx
Xx. Xxxxxxxxxx, Xxxxxxx 00000
Re: Dominion Homes, Inc. (the "Company") - Restriction on Stock Sales
Dear Sirs:
This letter is delivered to you pursuant to the Underwriting Agreement (the
"Underwriting Agreement") to be entered into by the Company, as issuer, BRC
Properties Inc., as selling shareholder, and Xxxxxxx Xxxxx & Associates, Inc.,
the representative (the "Representative") of certain underwriters (the
"Underwriters") to be named therein. Upon the terms and subject to the
conditions of the Underwriting Agreement, the Underwriters intend to effect a
public offering of Common Shares, without par value, of the Company (the
"Shares"), as described in and contemplated by the registration statement of the
Company on Form S-2, File No. 333-[_____] (the "Registration Statement"), as
filed with the Securities and Exchange Commission on [__________] (the
"Offering").
The undersigned recognizes that it is in the best financial interests of the
undersigned, as an executive officer or director, or an owner of stock, options,
warrants or other securities of the Company (the "Company Securities"), that the
Company complete the proposed Offering.
The undersigned further recognizes that the Company Securities held by the
undersigned are, or may be, subject to certain restrictions on transferability,
including those imposed by United States federal securities laws.
Notwithstanding these restrictions, the undersigned has agreed to enter into
this letter agreement to further assure the Underwriters that the Company
Securities of the undersigned, now held or hereafter acquired, will not enter
the public market at a time that might impair the underwriting effort.
Therefore, as an inducement to the Underwriters to execute the Underwriting
Agreement,
- 40 -
the undersigned hereby acknowledges and agrees that the undersigned will not (i)
offer, sell, contract to sell, pledge, grant any option to purchase or otherwise
dispose of (collectively, a "Disposition") any Company Securities, or any
securities convertible into or exercisable or exchangeable for, or any rights to
purchase or otherwise acquire, any Company Securities held by the undersigned or
acquired by the undersigned after the date hereof, or that may be deemed to be
beneficially owned by the undersigned (collectively, the "Lock-Up Shares"),
pursuant to the Rules and Regulations promulgated under the Securities Act of
1933, as amended (the "Act"), and the Securities Exchange Act of 1934, as
amended, for a period commencing on the date hereof and ending 180 days after
the date of the Company's Prospectus first filed pursuant to Rule 424(b) under
the Act, inclusive (the "Lock-Up Period"), without the prior written consent of
Xxxxxxx Xxxxx & Associates, Inc. or (ii) exercise or seek to exercise or
effectuate in any manner any rights of any nature that the undersigned has or
may have hereafter to require the Company to register under the Act the
undersigned's sale, transfer or other disposition of any of the Lock-Up Shares
or other securities of the Company held by the undersigned, or to otherwise
participate as a selling securityholder in any manner in any registration
effected by the Company under the Act, including under the Registration
Statement, during the Lock-Up Period. The foregoing restrictions are expressly
agreed to preclude the undersigned from engaging in any hedging, collar (whether
or not for any consideration) or other transaction that is designed to or
reasonably expected to lead or result in a Disposition of Lock-Up Shares during
the Lock-Up Period, even if such Lock-Up Shares would be disposed of by someone
other than such holder. Such prohibited hedging or other transactions would
include any short sale or any purchase, sale or grant of any right (including
any put or call option or reversal or cancellation thereof) with respect to any
Lock-Up Shares or with respect to any security (other than a broad-based market
basket or index) that includes, relates to or derives any significant part of
its value from Lock-Up Shares.
Notwithstanding the agreement not to make any Disposition during the Lock-Up
Period, you have agreed that the foregoing restrictions shall not apply to the
Company Securities, if any, being offered by the undersigned in the prospectus
included in the Registration Statement.
It is understood that, if the Underwriting Agreement (other than the
provisions thereof that survive termination) shall terminate or be terminated
prior to payment for and delivery of the Shares, you will release the
undersigned from the obligations under this letter agreement.
- 41 -
In furtherance of the foregoing, the Company and its transfer agent and
registrar are hereby authorized to decline to make any transfer of Lock-Up
Shares if such transfer would constitute a violation or breach of this letter.
This letter shall be binding on the undersigned and the respective successors,
heirs, personal representatives and assigns of the undersigned. Capitalized
terms used but not defined herein have the respective meanings assigned to such
terms in the Underwriting Agreement.
Very truly yours,
Signature of Securityholder
- 42 -
