EXHIBIT 1.1
2,250,000 SHARES
CROSSMANN COMMUNITIES, INC.
COMMON SHARES
UNDERWRITING AGREEMENT
, 1997
XxXxxxxx & Company Securities, Inc.
Xxxxxx, Read & Co. Inc.
Xxxxxxx Xxxxx & Associates, Inc.
As Representatives of the several
Underwriters named in Schedule A hereto
c/x XxXxxxxx & Company Securities, Inc.
Suite 2100
000 Xxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000-0000
Ladies and Gentlemen:
Crossmann Communities, Inc., an Indiana corporation (the "Company"), and
the Selling Shareholders (as hereinafter defined) propose to sell Common
Shares of the Company to you and the other underwriters named in Schedule A
annexed hereto, subject to the terms and conditions of this Agreement.
Section 1. Underwriters and Representatives. The term "Underwriters",
as used herein, will mean and refer collectively to you and the other
underwriters named in Schedule A annexed hereto and the term "Representatives"
will refer to the three of you in your capacity as the representatives of the
Underwriters. Except as may be expressly set forth below, any reference to
you in this Agreement shall be solely in your capacity as the Representatives.
Section 2. Shares Offered. The Company proposes to issue and sell to
the several Underwriters an aggregate of 1,500,000 of its authorized and
unissued common shares, no par value per share (the "Common Shares"). Certain
shareholders of the Company named in Schedule B hereto (the "Selling
Shareholders"), acting severally and not jointly, propose to sell to the
several Underwriters an aggregate of 750,000 Common Shares. The 2,250,000
Common Shares to be sold by the Company and the Selling Shareholders are
herein referred to as the "Firm Shares." The Company and the Selling
Shareholders, acting severally and not jointly, also propose to grant to the
Underwriters the Option (as hereinafter defined) to purchase up to an
additional aggregate of 337,500 of the Common Shares (the "Option Shares") on
the terms and for the purposes set forth in Section 4(b) hereof. The Firm
Shares and the Option Shares are hereinafter sometimes together called the
"Shares."
Section 3. Representations and Warranties of the Company and the Selling
Shareholders.
I. The Company represents and warrants to each Underwriter that:
(a) A registration statement on Form S-2 (File No. 333-______),
relating to the Shares, including a preliminary prospectus, has been prepared
by the Company in conformity with the requirements of the Securities Act of
1933, as amended (the "Act"), and the rules, regulations and instructions (the
"Rules and Regulations") of the Securities and Exchange Commission (the
"Commission") thereunder and has been filed by the Company with the
Commission. One or more amendments to such registration statement, including
in each case a revised preliminary prospectus, have been so prepared and
filed. If such registration statement has not become effective as of the
execution and delivery of this Agreement, and the filing of a further
amendment (the "Final Amendment") to such registration statement is necessary
to permit such registration statement to become effective, such amendment will
promptly be filed by the Company with the Commission. If such registration
statement has become effective and any post-effective amendment has been filed
with the Commission prior to the execution and delivery of this Agreement, the
most recent post-effective amendment has been declared effective by the
Commission. If such registration statement has become effective, a final
prospectus (the "Rule 430A Prospectus") containing information permitted to be
omitted at the time of effectiveness by Rule 430A of the Rules and Regulations
will promptly be filed by the Company pursuant to Rule 424(b) of the Rules and
Regulations. The term "preliminary prospectus" as used herein means any
preliminary prospectus (as referred to in Rule 430 of the Rules and
Regulations) with respect to the Shares included at any time as part of such
registration statement or filed with the Commission pursuant to Rule 424(a) of
the Rules and Regulations; the registration statement referred to in this
Section 3.I.(a) as amended at the time that it becomes or became effective,
or, if applicable, as amended at the time the most recent post-effective
amendment to such registration statement filed with the Commission prior to
the execution and delivery of this Agreement became effective, including
financial statements and all exhibits and other information (whether filed or
incorporated by reference) deemed to be a part thereof at such time pursuant
to Rule 430A of the Rules and Regulations is herein called the "Registration
Statement"; and the final prospectus relating to the Shares in the form first
filed with the Commission pursuant to Rule 424(b)(1) or (4) of the Rules and
Regulations or, if no such filing is required, the form of final prospectus
included in the Registration Statement at the Effective Date (as hereinafter
defined) is herein called the "Prospectus." The date on which the
Registration Statement becomes effective is herein called the "Effective
Date."
(b) When the Registration Statement becomes effective, and at all
subsequent times to and including the Closing Time (as hereinafter defined)
and at the Option Exercise Time (as hereinafter defined), or for such longer
period as the Prospectus may be required, by the Act or the Rules and
Regulations or the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), or the rules and regulations promulgated thereunder (the "Exchange Act
Regulations"), to be delivered in connection with sales of the Shares by the
Underwriters or a dealer, the Registration Statement and the Prospectus (as
amended or as supplemented if the Company shall have filed with the Commission
any amendment thereof or supplement thereto, provided that no amendment or
supplement to the Registration Statement or the Prospectus shall be made
without prior consultation with you) will comply in all material respects with
the requirements of the Act and the Rules and Regulations, will contain all
statements required to be stated therein in accordance with the Act and the
Rules and Regulations, will not contain an untrue statement of a material fact
and will not omit to state a material fact required to be stated therein or
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided, however,
that the representations and warranties in this subsection (b) do not apply to
statements or omissions in the Registration Statement or the Prospectus based
upon and made in conformity with written information furnished to the Company
through the Representatives by or on behalf of any Underwriter specifically
for inclusion therein.
(c) The Commission has not issued an order preventing or suspending
the use of any preliminary prospectus with respect to the Shares and has not
instituted or, to the Company's knowledge, threatened to institute any
proceedings with respect to such an order. Each preliminary prospectus, when
filed with the Commission, conformed in all material respects with the
requirements of the Act and the Rules and Regulations and, as of its date, did
not include any untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading; provided, however,
that the representations and warranties in this sentence do not apply to
statements or omissions in each such preliminary prospectus based upon and
made in conformity with written information furnished to the Company through
the Representatives by or on behalf of any Underwriter specifically for
inclusion in such preliminary prospectus.
(d) The documents incorporated or deemed to be incorporated by
reference in the Registration Statement and the Prospectus, at the time they
were filed with the Commission, complied in all material respects with the
requirements of the Exchange Act and the Exchange Act Regulations and, when
read together with the other information in the Prospectus, at the date
hereof, at the date of the Prospectus, and at the Closing Time and the Option
Exercise Time, and during the period in which a Prospectus is required to be
delivered in connection with sales of the Shares, did not and will not include
an untrue statement of a material fact or omit to state a material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading.
(e) As of the date hereof, the Company has no subsidiaries and does
not own, directly or indirectly, any capital stock or other equity securities
in any other corporation or any interest in any partnership, limited liability
company, joint venture or other association, except as set forth in Schedule C
hereto. The term "Subsidiaries," as used herein, will mean and refer
collectively to: Crossmann Management, Inc., Crossmann Investments, Inc.,
Deluxe Homes, Inc., Deluxe Homes of Lafayette, Inc., Trimark Homes, Inc.,
Trimark Development, Inc., Crossmann Mortgage Corp., Merit Realty, Inc.,
Deluxe Aviation, Inc., Crossmann Communities of Ohio, Inc., Cutter Homes, Ltd.
and Crossmann Communities Partnership ("CCP"). At the Closing Time and at the
Option Exercise Time, the Company will not have any subsidiaries, other than
the Subsidiaries, and will not own, directly or indirectly, any capital stock
or other equity securities in any corporation or any interest in any
partnership, limited liability company, joint venture or other association,
except as disclosed in Schedule C hereto.
(f) The Company and each of the Subsidiaries (other than CCP) is a
corporation duly organized and validly existing under the laws of the
jurisdiction of its organization. At the Closing Time and the Option Exercise
Time, the Company and each of the Subsidiaries (other than CCP) will be a
corporation duly organized and validly existing under the laws of the
jurisdiction of its organization. CCP is now, and at the Closing Time and the
Option Exercise Time will be, a duly organized and validly existing general
partnership under the laws of the State of Indiana. Each of the Company and
the Subsidiaries have, and at the Closing Time and at the Option Exercise Time
will have, the power and authority (corporate, governmental, regulatory and
otherwise) and all necessary approvals, orders, licenses, certificates,
permits and other governmental authorizations to own or lease all of their
assets owned or leased by them and to conduct their businesses as described in
the Registration Statement and the Prospectus. The Company and the
Subsidiaries are, and at the Closing Time and at the Option Exercise Time will
be, duly licensed or qualified to do business and in good standing as a
foreign entity in all jurisdictions (i) in which the nature of the activities
conducted by them require such qualification and (ii) in which they own or
lease real property, except where the failure to be so qualified would not
have a material adverse effect on the business, business prospects, financial
condition or results of operations of the Company and the Subsidiaries, taken
as a whole ("Material Adverse Effect"). A complete and correct copy of the
articles of incorporation and the by-laws or the partnership agreement (or
other similar constituent documents) of each of the Company and the
Subsidiaries, in each case as amended and as currently in effect, have been
delivered or made available to you or your counsel and no changes therein will
be made subsequent to the date hereof and prior to the expiration of the
Option.
(g) The Company is, and at the Closing Time and at the Option
Exercise Time will be, authorized to issue 30,000,000 Common Shares, and has
heretofore validly issued, and at the Closing Time and at the Option Exercise
Time will have outstanding, fully paid and non-assessable, _______ Common
Shares, without giving effect to the issuance of Shares by the Company
pursuant to this Agreement or pursuant to the exercise of options granted
under the option plans described below. The Company has, and at the Closing
Time and at the Option Exercise Time will have, duly reserved for issuance
_________ Common Shares under the 1993 Employee Stock Option Plan, as amended
(the "1993 Employee Stock Option Plan") and ________ Common Shares under the
Outside Director Stock Option Plan (the "Director Stock Option Plan").
Subsequent to the date hereof and prior to the Closing Time and the Option
Exercise Time, the Company will not issue any securities. Except as
contemplated by this Agreement and as set forth in the Registration Statement
and the Prospectus, the Company does not have outstanding, and at the Closing
Time and at the Option Exercise Time the Company will not have outstanding,
any options to purchase, or any rights or warrants to subscribe for, or any
securities or obligations convertible into, or any contracts or commitments to
issue or sell, any shares of capital stock or any warrants, convertible
securities or obligations. All of the issued and outstanding stock of the
Subsidiaries has been duly and validly authorized and issued, are fully paid
and non-assessable and at the Closing Time and at the Option Exercise Time
will be owned by the Company, free and clear of all liens, security interests,
pledges, charges, encumbrances, shareholders' agreements, voting trusts,
equities or claims, except as described in the Prospectus and have not been
issued and are not owned in violation of any preemptive rights of
shareholders.
(h) The Company's outstanding Common Shares have been and, upon
issuance and payment therefor, all of the Shares will be, duly authorized,
validly issued, fully paid and non-assessable and not subject to preemptive
rights. The holders of Common Shares (including the Shares) will not be
subject to personal liability for the obligations of the Company solely by
reason of being such holders. The Common Shares (including the Shares)
conform, and when the Registration Statement becomes effective and at the
Closing Time and at the Option Exercise Time will conform, in all material
respects to all statements with regard thereto contained in the Registration
Statement and the Prospectus; and the issuance and sale of the Shares to be
issued and sold by the Company have been duly and validly authorized by all
necessary corporate action on the part of the Company. At the Closing Time,
the Company will have, based upon the assumptions set forth in the Prospectus,
the adjusted capitalization set forth in the Prospectus under the caption
"Capitalization" in the column captioned "June 30, 1997 - As Adjusted."
(i) The financial statements included or incorporated by reference in
the Registration Statement and the Prospectus, together with the related
schedules and notes, present fairly the consolidated financial position of the
Company at the respective dates indicated and the consolidated statement of
income, shareholders' equity and cash flows of the Company for the periods
specified. Such financial statements have been prepared in conformity with
generally accepted accounting principles ("GAAP") applied on a consistent
basis throughout the periods involved. The supporting schedules, if any,
included or incorporated by reference in the Registration Statement and the
Prospectus present fairly, in accordance with GAAP, the information required
to be stated therein. The selected financial data, the summary financial
information and other financial information and data included or incorporated
by reference in the Prospectus present fairly the information shown therein
and have been compiled on a basis consistent with that of the audited
financial statements included or incorporated by reference in the Registration
Statement and the Prospectus. All financial statements and financial
information required by the Act, the Rules and Regulations, the Exchange Act
and the Exchange Act Regulations are included or incorporated by reference in
the Registration Statement and the Prospectus. The accountants who certified
the financial statements and supporting schedules included in the Registration
Statement and the Prospectus are independent public accountants as required by
the Act and the Rules and Regulations.
(j) Subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus and at all times prior
to the expiration of the Option, except as set forth in or contemplated by the
Registration Statement and the Prospectus, (i) the Company and the
Subsidiaries have and will have conducted their businesses in substantially
the same manner as of June 30, 1997; (ii) the Company and the Subsidiaries
have not incurred and will not have incurred any material liabilities or
obligations, direct or contingent, or entered into any material transactions
not in the ordinary course of business; (iii) the Company and the Subsidiaries
have not paid or declared and will not pay or declare any dividends or other
distributions on their capital stock except as described in the Registration
Statement and the Prospectus; and (iv) there has not been and will not have
been any change in the capitalization of the Company and the Subsidiaries or
any change in the business, business prospects, financial condition or results
of operations of the Company and the Subsidiaries or in the condition or in
the value of their assets arising for any reason whatsoever which could have a
Material Adverse Effect, except as disclosed in the Prospectus.
(k) Except as set forth in or contemplated by the Registration
Statement and the Prospectus, the Company and the Subsidiaries do not have,
and at the Closing Time and the Option Exercise Time will not have, any
material contingent obligations.
(l) There are no actions, suits or proceedings at law or in equity
pending, or to the knowledge of the Company threatened, against the Company or
any of the Subsidiaries, any of their assets or any of their officers or
directors, before or by any federal, state, county or local commission,
regulatory body, administrative agency or other governmental body, domestic or
foreign, wherein an unfavorable ruling, decision or finding would have a
Material Adverse Effect. Neither the Company nor any of the Subsidiaries is
involved in any labor dispute nor, to their knowledge, is any such dispute
threatened, which dispute would have a material adverse effect upon the
properties, businesses, financial condition or results of operations of the
Company or any of the Subsidiaries.
(m) The Company and the Subsidiaries have, and at the Closing Time
and at the Option Exercise Time will have, complied in all material respects
with all laws, regulations, ordinances, and orders applicable to them or their
businesses (including, without limitation, all laws, regulations, ordinances
and orders relating to releases, discharges, emissions or disposal to air,
water, land or groundwater, to the withdrawal or use of groundwater, to the
use, handling or disposal of polychlorinated biphenyls (PCBs), asbestos or
urea formaldehyde, to the treatment, storage, disposal or management of
hazardous substances, pollutants or contaminants, to exposure to toxic,
hazardous or other controlled, prohibited or regulated substances), the
violation of which would have a material adverse effect upon any of their
legal existence or their businesses, business prospects, financial condition,
results of operations, earnings or properties. In addition, and irrespective
of such compliance, neither the Company nor any of the Subsidiaries are
subject to any liabilities for environmental remediation or clean-up,
including any liability or class of liability of the lessee under the
Comprehensive Environmental Response, Compensation and Liability Act of 1980,
as amended, or the Resource Conservation and Recovery Act of 1976, as amended,
which liability would have a Material Adverse Effect. The Company and the
Subsidiaries have, and at the Closing Time and at the Option Exercise Time
will have, in all respects performed all of the obligations required to be
performed by them, and the Company and the Subsidiaries are not, and at the
Closing Time and Option Exercise Time will not be, in default under and there
exists no state of facts which with notice or lapse of time or both would
constitute a default under any indenture, mortgage, deed of trust, voting
trust agreement, loan agreement, letter of credit agreement, bond, debenture,
note agreement or other evidence of indebtedness, lease, contract or other
agreement or instrument to which any of them are a party or by which any of
them or any of their property is bound, and, to the knowledge of the Company,
no other party under any such agreement or instrument to which any of the
Company or the Subsidiaries is a party is in default in any respect
thereunder, except, in each case, where such failure or default has either
been waived or would not have a Material Adverse Effect.
(n) The Company and the Subsidiaries (i) keep books, records and
accounts that, in reasonable detail, accurately and fairly reflect the
transactions and dispositions of their assets, and (ii) maintain systems of
internal accounting controls sufficient to provide reasonable assurances that
(A) transactions are executed in accordance with management's general or
specific authorization, (B) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principles and to maintain accountability for assets, (C) access to
assets is permitted only in accordance with management's general or specific
authorization and (D) the recorded accountability for assets is compared with
the existing assets at reasonable intervals and appropriate action is taken
with respect to any differences. Neither the Company nor any of the
Subsidiaries have made any payment to any state, federal or foreign
governmental officer or 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).
(o) The Company and the Subsidiaries (other than CCP) are not in
violation of their respective Articles of Incorporation or By-Laws, in each
case as amended as of the date hereof. CCP is not in violation of its
Agreement of Partnership as of the date hereof.
(p) This Agreement has been duly authorized, executed and delivered
by the Company and constitutes a valid and binding agreement of the Company
enforceable in accordance with its terms, subject to bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors' rights and to general equity
principles and except as rights to indemnity and contribution hereunder may be
limited by applicable law; the performance of this Agreement and the
consummation of the transactions contemplated hereby will not conflict with or
result in a breach or violation of any of the terms and provisions of, or
constitute a default (and there exists no state of facts which with notice or
lapse of time or both would constitute a default) under or result in the
creation or imposition of any lien, charge, or encumbrance upon the assets or
properties of the Company or any of the Subsidiaries, pursuant to any
indenture, mortgage, deed of trust, voting trust agreement, loan agreement,
letter of credit agreement, bond, debenture, note agreement or other evidence
of indebtedness, lease, contract or other agreement or instrument to which any
of the Company or the Subsidiaries is a party or by which any of them or any
of their properties are bound, and will not result in a breach or violation of
the articles of incorporation, by-laws or partnership agreement (or other
similar constituent documents) of any of the Company or the Subsidiaries or
any statute or any regulation, ordinance or order applicable to any of the
Company or the Subsidiaries or their businesses or properties or of any court
or other governmental body except where any such conflict, breach or default
would not have a Material Adverse Effect; and no consent, approval,
authorization or order of any court or governmental agency or body is required
for the consummation by the Company or the Subsidiaries of the transactions on
their part herein contemplated, except such as may be required under the Act,
the Exchange Act or under state securities or blue sky laws.
(q) Each of the Company and the Subsidiaries have, and will have at
the Closing Time and the Option Exercise Time, good and marketable title to
all properties and assets owned by them, free and clear of all liens, charges,
encumbrances or restrictions, except such as are described in or referred to
in the Prospectus or except for those which would not have a Material Adverse
Effect. The Company and the Subsidiaries have, and will have at the Closing
Time and the Option Exercise Time, valid, subsisting and enforceable leases
for the properties described in the Prospectus as leased by them.
(r) There is no document or contract of a character required to be
described in the Prospectus or to be filed as an exhibit to the Registration
Statement which is not described or filed as required; and no statement,
representation, warranty or covenant made by the Company in this Agreement or
in any certificate or document required by this Agreement to be delivered to
you is, was when made, or as of the Closing Time or the Option Exercise Time
will be, inaccurate, untrue or incorrect. No transaction has occurred between
or among the Company and any of its officers, directors or shareholders or any
affiliate of any such officer, director or shareholder that is required by the
Act or the Rules and Regulations to be described in and is not described in or
incorporated by reference in the Registration Statement and the Prospectus.
(s) The Company owns or possesses the trademarks, service marks, and
trade names (collectively, "Proprietary Rights") used in or necessary for the
conduct of the business of the Company as now conducted and as proposed to be
conducted as described in the Prospectus. The Company has the right to use
all Proprietary Rights used in or necessary for the conduct of its business
without infringing the rights of any person or violating the terms of any
licensing or other agreement to which it is a party, and to the Company's
knowledge, no person is infringing upon any of the Proprietary Rights. No
charges, claims or litigation have been asserted or, to the Company's
knowledge, threatened against the Company contesting the right of the Company
to use, or the validity of, any of the Proprietary Rights or challenging or
questioning the validity or effectiveness of any license or agreement
pertaining thereto or asserting the misuse thereof, and, to the Company's
knowledge, no valid basis exists for the assertion of any such charge, claim
or litigation.
(t) The Company and the Subsidiaries do not, and do not intend to,
conduct their businesses in a manner in which any of them would become an
"investment company" as defined in Section 3(a) of the Investment Company Act
of 1940, as amended.
(u) All issuances and sales by the Company of its securities prior to
the date hereof were either (i) registered under the Act, or (ii) exempt from
registration under the Act and complied in all respects with the provisions of
all applicable federal and state securities laws. No holder of any securities
of the Company has the right to require registration of any of the Common
Shares or other securities of the Company because of the filing or
effectiveness of the Registration Statement.
(v) Neither the Company nor any of the Subsidiaries, nor any of their
officers or directors or affiliates (as defined in the Rules and Regulations),
has taken, nor will take, directly or indirectly, any action designed to
stabilize or manipulate the price of any security of the Company, or which has
constituted or which might reasonably be expected to cause or result in
stabilization or manipulation of the price of any security of the Company, to
facilitate the sale or resale of any of the Shares.
(w) The Company and the Subsidiaries have not, and at the Closing
Time and at the Option Exercise Time will not have, incurred any liability for
financial advisory, finder's or brokerage fees or agent's commissions in
connection with the offer and sale of the Shares, this Agreement or the
transactions hereby contemplated, except for the Underwriters' discounts and
commissions provided for in this Agreement.
(x) The Company and the Subsidiaries have filed all federal, state
and local income, employment, withholding, franchise and other tax returns
required to be filed through the date hereof and have paid all taxes due with
respect thereto, and no tax deficiency has been, nor do they have any
knowledge of any tax deficiency which might be, asserted against them which
could have a Material Adverse Effect.
II. Each Selling Shareholder, severally and not jointly, represents
and warrants to and agrees with each Underwriter and the Company that:
(a) Such Selling Shareholder now has, and at the Closing Time will
have, valid marketable title to the Firm Shares that are to be sold by such
Selling Shareholder hereunder, and such Selling Shareholder now has, and at
the Option Exercise Time will have, valid marketable title to the Option
Shares that are to be sold by such Selling Shareholder hereunder, in each case
free and clear of any pledge, lien, security interest, incumbrance, claim or
equitable interest other than pursuant to this Agreement; such Selling
Shareholder has full right, power and authority to enter into this Agreement
and to sell, assign, transfer and deliver the Shares being sold by such
Selling Shareholder hereunder; and upon delivery of such Shares hereunder and
payment of the purchase price as herein contemplated, each of the Underwriters
will obtain valid marketable title to such Shares purchased by it, free and
clear of any pledge, lien, security interest, incumbrance, claim or equitable
interest, including any liability for estate or inheritance taxes, or any
liability to or claims of any creditor, devisee, legatee or beneficiary of
such Selling Shareholder.
(b) Such Selling Shareholder has duly authorized (if applicable),
executed and delivered, in the form heretofore furnished to the
Representatives, a Power of Attorney (the "Power of Attorney") appointing Xxxx
X. Xxxxxxxxx as attorney-in-fact (the "Attorney-in-Fact") and a Letter of
Transmittal and Custody Agreement (the "Custody Agreement") appointing
American Stock Transfer & Trust as custodian thereunder (the "Custodian");
each of the Power of Attorney and the Custody Agreement constitutes a valid
and binding agreement of such Selling Shareholder, enforceable in accordance
with its terms, except as the enforcement thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
relating to or affecting creditors' rights generally or by general equitable
principles; and each of such Selling Shareholder's Attorney-in-Fact, acting
alone, is authorized to execute and deliver this Agreement and the certificate
referred to in Section 8(h) hereof on behalf of such Selling Shareholder, to
authorize the delivery of the Shares to be sold by such Selling Shareholder
under this Agreement and to duly endorse (in blank or otherwise) the
certificate or certificates representing such Shares or a stock power or
powers with respect thereto, to accept payment therefor, and otherwise to act
on behalf of such Selling Shareholder in connection with this Agreement.
Certificates in negotiable form representing all Shares to be sold by such
Selling Shareholder under this Agreement, together with a stock power or
powers duly endorsed in blank by such Selling Shareholder, have been placed in
custody under the Custody Agreement for the purpose of effecting delivery
hereunder. Each Selling Shareholder agrees that the certificates for the
Shares being sold by such Selling Shareholder so held in custody are subject
to the interests of the Underwriters hereunder, that the arrangements made by
such Selling Shareholder for such custody, including the Power of Attorney,
are to that extent irrevocable and that the obligations of such Selling
Shareholder hereunder shall not be terminated by the act of such Selling
Shareholder or by operation of law, whether by the death or incapacity of such
Selling Shareholder or the occurrence of any other event, except as
specifically provided herein or in the Custody Agreement. If any Selling
Shareholder should die or be incapacitated, or if any other such event should
occur, before the delivery of the certificates for the Shares being sold by
such Selling Shareholder hereunder, such Shares shall, except as specifically
provided herein or in the Custody Agreement, be delivered by the Custodian in
accordance with the terms and conditions of this Agreement as if such death,
incapacity or other event had not occurred, regardless of whether the
Custodian shall have received notice of such death or other event.
(c) All authorizations, approvals, consents and orders necessary for
the execution and delivery by such Selling Shareholder of the Power of
Attorney, the Custody Agreement and this Agreement and the sale and delivery
of the Shares to be sold by such Selling Shareholder under this Agreement
(other than, at the time of the execution hereof (if the Registration
Statement has not yet been declared effective by the Commission), the issuance
of the order of the Commission declaring the Registration Statement effective
and such authorizations, approval or consents as may be necessary under state
or other securities or blue sky laws) have been obtained and are in full force
and effect; such Selling Shareholder, if other than a natural person, has been
duly organized and is validly existing and in good standing under the laws of
the jurisdiction of its organization; and such Selling Shareholder has full
right, power and authority to enter into and perform its obligations under the
Power of Attorney, the Custody Agreement and this Agreement and to sell,
assign, transfer and deliver the Shares to be sold by such Selling Shareholder
under this Agreement.
(d) Such Selling Shareholder will not, for a period of 180 days after
the Effective Date, offer to sell, contract to sell or otherwise sell or
dispose of any Common Shares, any options or warrants to purchase any Common
Shares, or any securities convertible into or exchangeable for Common Shares,
owned directly by such Selling Shareholder or with respect to which such
Selling Shareholder has the power of disposition, otherwise than hereunder or
(i) as a gift or other private transfer or sale, provided the transferee or
transferees thereof agree to be bound by this restriction or (ii) with the
prior written consent of XxXxxxxx & Company Securities, Inc. in its sole
discretion. Such Selling Shareholder agrees and consents to the entry of
stock transfer instructions with the Company's transfer agent against the
transfer of Common Shares held by such Selling Shareholder except in
compliance with the foregoing restrictions.
(e) This Agreement has been duly authorized (if applicable), executed
and delivered by such Selling Shareholder and is a valid and binding agreement
of such Selling Shareholder, enforceable in accordance with its terms, except
as the indemnification and contribution provisions hereunder may be limited by
applicable law and except as the enforcement hereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
relating to or affecting creditors' rights generally or by general equitable
principles; and the performance of this Agreement and the consummation of the
transactions herein contemplated will not conflict with or result in a breach
of or default under any material bond, debenture, note or other evidence of
indebtedness, or any material contract, indenture, mortgage, deed of trust,
loan agreement, lease or other agreement or instrument to which such Selling
Shareholder is a party or by which such Selling Shareholder or any Shares to
be sold by such Selling Shareholder hereunder may be bound or, to the best of
such Selling Shareholder's knowledge, result in any violation of any law,
order, rule, regulation, writ, injunction or decree of any court or
governmental agency or body or, if such Selling Shareholder is other than an
natural person, result in any violation of any provisions of the
organizational documents of such Selling Shareholder.
(f) Such Selling Shareholder has not taken and will not take,
directly or indirectly, any action designed to, or which might reasonably be
expected to, cause or result in stabilization or manipulation of the price of
the Common Shares to facilitate the sale or resale of the Shares.
(g) Such Selling Shareholder has not distributed and will not
distribute any prospectus or other offering material in connection with the
offering and sale of the Shares.
(h) All information furnished by or on behalf of such Selling
Shareholder relating to such Selling Shareholder and the Shares to be sold by
such Selling Shareholder hereunder that is contained in the Power of Attorney,
Registration Statement or the Prospectus is, and at the Closing Time and at
the Option Exercise Time will be, true, correct and complete, and does not,
and at the Closing Time and at the Option Exercise Time will not, contain an
untrue statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make such statements, in light of the
circumstances under which they were made, not misleading.
(i) Such 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 Time or at the Option Exercise Time, as the case may be.
(j) Such Selling Shareholder does not have, or has waived prior to
the date hereof, any preemptive right, co-sale right or right of first refusal
or other similar right to purchase any of the Shares that are to be sold by
the Company to the Underwriters pursuant to this Agreement; and such Selling
Shareholder does not own any warrants, options or similar rights to acquire,
and does not have any right or arrangement to acquire, any capital stock,
rights, warrants, options or other securities from the Company, other than
those described in the Registration Statement and the Prospectus.
(k) Such Selling Shareholder is not aware that any of the
representations and warranties of the Company set forth in Section 3.I above
is untrue or inaccurate in any material respect.
Section 4. Purchase, Sale and Delivery of the Shares, Closing,
Distribution.
(a)(i) On the basis of the representations and warranties set forth
in this Agreement and subject to the terms and conditions herein set forth,
the Company agrees to issue and sell to the several Underwriters an aggregate
of 1,500,000 Firm Shares, each Selling Shareholder agrees to sell to the
several Underwriters the number of Firm Shares set forth on Schedule B
opposite the name of such Selling Shareholder and each of the Underwriters
agrees to purchase from the Company and the Selling Shareholders, at a
purchase price of $_______ per share, the respective aggregate number of Firm
Shares determined in the manner set forth below. The obligation of each
Underwriter to the Company and each of the Selling Shareholders, respectively,
shall be to purchase that portion of the number of Common Shares to be sold by
the Company or such Selling Shareholder pursuant to this Agreement as the
number of Firm Shares set forth opposite the name of such Underwriter on
Schedule A bears to the total number of Firm Shares to be purchased by the
Underwriters pursuant to this Agreement, in each case adjusted by you such
that no Underwriter shall be obligated to purchase Firm Shares other than in
100 share amounts. In making this Agreement, each Underwriter is contracting
severally and not jointly.
(ii) Delivery of the Firm Shares shall be made to you for the
accounts of the respective Underwriters, at the offices of XxXxxxxx & Company
Securities, Inc. ("McDonald & Company"), at Suite 2100, 800 Superior Avenue,
Cleveland, Ohio, or such other location, including New York, New York, as you
shall advise the Company and the Selling Shareholders by at least two full
business days' notice in writing, against payment by you on behalf of the
several Underwriters of the purchase price therefor to the Company and the
Selling Shareholders by delivery of certified or bank cashier's checks payable
in next day funds to the order of the Company and to each of the Selling
Shareholders in the amount to which each is entitled, at 10:00 A.M.,
Indianapolis time, on ________ __, 1997, or on such other time and business
day (Saturdays, Sundays and legal holidays in the City of Indianapolis not
being considered business days for the purposes of this Agreement), not later
than the third full business day following the first day that the Shares are
traded, which time and date are herein called the "Closing Time." Delivery of
the Firm Shares shall be made in registered form in such name or names and in
such denominations as you shall request by at least two full business days'
notice in writing. If the Representatives so elect, delivery of the Shares
may be made by credit through full fast transfer to the accounts at The
Depository Trust Company designated by the Representatives. The cost of
original issue tax stamps and transfer stamps, if any, in connection with the
issuance and delivery or sale of the Firm Shares by the Company and the
Selling Shareholders to the respective Underwriters shall be borne by the
Company or the Selling Shareholders, as the case may be. The Company and the
Selling Shareholders will pay and save each Underwriter or its nominees, and
any subsequent holder of the Firm Shares, harmless from any and all
liabilities with respect to or resulting from any failure or delay in paying
federal or state stamp and other transfer taxes, if any, which may be payable
or determined to be payable in connection with the sale by the Company or the
Selling Shareholders to such Underwriter of the Firm Shares or any portion
thereof.
(iii) The Company and the Selling Shareholders will make the
certificates for the Firm Shares available to you for examination at such
offices as you shall designate, not later than 2:00 P.M., on the business day
preceding the Closing Time.
(iv) The obligations of the several Underwriters to purchase and pay
for the Firm Shares at the Closing Time shall be subject to compliance as of
such date with all of the conditions specified in Section 8 hereof and to the
absence of any termination of this Agreement pursuant to Section 10 hereof.
(b)(i) The Company and the Selling Shareholders, severally and not
jointly, hereby grant to the several Underwriters an option (the "Option") to
purchase from the Company and the Selling Shareholders up to 337,500 Option
Shares, in the same proportion as each Underwriter has agreed to purchase the
Firm Shares, at and for the purchase price per share for the Firm Shares set
forth in Section 4(a)(i) hereof; provided, however, that the Option may be
exercised only for the purpose of covering any over-allotments which may be
made by you in connection with the distribution and sale of the Firm Shares.
If the Option is exercised in full by the Underwriters, the respective numbers
of Option Shares to be sold by the Company and each of the Selling
Shareholders will be as set forth on Schedule B hereto. To the extent that
the Option is exercised for fewer than 337,500 Shares, the respective numbers
of the Option Shares to be sold by the Company and each Selling Shareholder
will be reduced proportionately.
(ii) The Option is exercisable by you in whole or in part at any time
on or before 12:00 noon, Indianapolis time, on the day prior to the Closing
Time, and at any time thereafter during the period ending 30 days after the
date of the Prospectus, by giving notice to the Company and the Selling
Shareholders in the manner provided in Section 12 hereof, setting forth the
number of Option Shares as to which the Option is being exercised, the name or
names in which the certificates for such Option Shares are to be registered,
the denominations of such certificates and the date of delivery of such Option
Shares, which date, if not the Closing Time, shall not be less than two nor
more than three business days after such notice. The number of Option Shares
to be purchased by each Underwriter upon any exercise of the Option shall be
the same proportion of the total number of Option Shares to be purchased by
the several Underwriters pursuant to the exercise of such Option as the number
of Firm Shares purchased by such Underwriter (set forth in Schedule A hereto)
bears to the total number of Firm Shares purchased by the several Underwriters
(set forth in Schedule A hereto), adjusted by the Representatives in such
manner as to avoid fractional shares.
(iii) Delivery of the Option Shares with respect to which the Option
shall have been exercised shall be made to you for the account of the several
Underwriters, at the offices of McDonald & Company at Suite 2100, 000 Xxxxxxxx
Xxxxxx, Xxxxxxxxx, Xxxx or such other location, including New York, New York,
as you shall determine and advise the Company and the Selling Shareholders,
against payment by you, on behalf of the respective Underwriters, of the
purchase price therefor to the Company and the Selling Shareholders by
certified or bank cashier's checks payable in next day funds to the order of
the Company and to each of the Selling Shareholders in the amount to which the
Company and each of the Selling Shareholders is entitled, at 10:00 A.M.,
Indianapolis time, on the date designated in the notice given by you as above
provided for, unless some other place, time and date is mutually agreed upon
(such time and date being herein called the "Option Exercise Time"). If the
Representatives so elect, delivery of the Option Shares may be made by credit
through full fast transfer to the accounts at The Depository Trust Company
designated by the Representatives. The cost of original issue tax stamps or
transfer stamps, if any, in connection with each issuance and delivery of the
Option Shares by the Company and the Selling Shareholders to the respective
Underwriters shall be borne by the Company or the Selling Shareholders, as the
case may be. The Company and the Selling Shareholders will pay and save each
Underwriter, and any subsequent holder of Option Shares, harmless from any and
all liabilities with respect to or resulting from any failure or delay in
paying federal and state stamp taxes, if any, which may be payable or
determined to be payable as a result of the sale by the Company or the Selling
Shareholders to such Underwriter of the Option Shares or any portion thereof.
(iv) The Company and the Selling Shareholders will make the
certificates for the Option Shares to be purchased at the Option Exercise Time
available to you for examination at such offices as you shall designate, not
later than 2:00 P.M., on the business day next preceding such Option Exercise
Time.
(v) The obligation of the several Underwriters to purchase and pay
for the Option Shares at the Option Exercise Time shall be subject to
compliance as of such date with all the conditions specified in Section 8
hereof and to the absence of any termination of this Agreement pursuant to
Section 10 hereof.
(c) Subject to the terms and conditions hereof, the several
Underwriters agree that (i) they will offer the Shares to the public as set
forth in the Prospectus as soon after the Registration Statement becomes
effective as may be practicable, and (ii) they will offer and sell the Shares
to the public only in those jurisdictions, and in such amounts, where due
qualification and/or registration has been effected or an exemption from such
qualification and/or registration is available under the applicable securities
or blue sky laws of such jurisdiction; it being understood, however, that such
agreement only covers the initial sale of the Shares by the Underwriters and
not any subsequent sale of such Shares in any trading market which may develop
after the public offering.
Section 5. Registration Statement and Prospectus.
(a) The Company will deliver to you, without charge, four fully
signed copies of the Registration Statement and of each amendment thereto,
including all financial statements and exhibits, and to each Underwriter the
number of conformed copies of the Registration Statement and of each amendment
thereto, including all financial statements, but excluding exhibits, as each
Underwriter may reasonably request.
(b) The Company has delivered to each Underwriter, and each of the
dealers selected by you in connection with the distribution of the Shares
(hereafter sometimes referred to individually as a "Selected Dealer" and
collectively as "Selected Dealers"), without charge, as many copies as you
have requested of each preliminary prospectus heretofore filed with the
Commission and will deliver to each Underwriter and to any Selected Dealer,
without charge, on the Effective Date, and thereafter from time to time during
the period in which the Prospectus is required by law to be delivered in
connection with sales of Shares by an Underwriter or a dealer, as many copies
of the Prospectus (and, in the event of any amendment of or supplement to the
Prospectus, of such amended or supplemented Prospectus) as you may request.
(c) The Company has authorized the Underwriters to use, and make
available for use by prospective dealers, the preliminary prospectuses, and
authorizes each Underwriter, all Selected Dealers and all dealers to whom any
of such Shares may be sold by the Underwriters or by any Selected Dealer, to
use the Prospectus, as from time to time amended or supplemented, in
connection with the sale of the Shares in accordance with the applicable
provisions of the Act, the applicable Rules and Regulations and applicable
state law until completion of the public offering of the Shares and for such
longer period as you may request if the Prospectus is required to be delivered
in connection with sales of the Shares by an Underwriter or a dealer.
Section 6. Covenants.
I. The Company covenants and agrees with each Underwriter that:
(a) After the execution and delivery of this Agreement, the Company
will not, at any time, whether before or after the Effective Date, file any
amendment of or supplement to the Registration Statement or the Prospectus of
which you shall not previously have been advised and furnished with a copy, or
which you or Xxxxx & Xxxxxxx ("counsel for the Underwriters") shall not have
approved or which is not in compliance with the Act or the Rules and
Regulations.
(b) If the Registration Statement has not become effective, the
Company will promptly file the Final Amendment with the Commission and will
use its best efforts to cause the Registration Statement to become effective.
If the Registration Statement has become effective, the Company will file the
Rule 430A Prospectus or other Prospectus with the Commission as promptly as
practicable, but in no event later than is permitted by Rule 424(b). The
Company will promptly advise you (i) when the Registration Statement, or any
post-effective amendment thereto, shall hereafter become effective, or any
amendments or supplements to the Prospectus shall have been filed with the
Commission; (ii) of any request of the Commission or any state or other
regulatory body for any amendment or supplement of the Registration Statement
or the Prospectus or for additional information and the nature and substance
thereof; (iii) of the issuance by the Commission of any stop order suspending
the effectiveness of the Registration Statement or of any order preventing or
suspending the use of any preliminary prospectus or prohibiting the offer or
sale of any of the Shares or of the initiation of any proceedings for such
purpose; (iv) of any receipt by the Company of any notification with respect
to the suspension of qualification of the Shares for sale in any jurisdiction
or the initiation or threatening of any proceeding for such purpose; and (v)
of the happening of any event during the periods in which the Prospectus is to
be used in conjunction with the offer or sale of Shares which makes any
statement made in the Registration Statement or the Prospectus untrue in any
material respect or which requires the making of any changes in the
Registration Statement or the Prospectus in order to make the statements
therein not misleading. The Company will use its best efforts to prevent the
issuance of any stop order or any order preventing or suspending the use of
the Registration Statement or Prospectus and, if such order is issued, to
obtain the lifting thereof as promptly as possible.
(c) The Company will prepare and file with the Commission, upon your
request, any such amendments of or supplements to the Registration Statement
or the Prospectus, in form satisfactory to Ice Xxxxxx Xxxxxxx & Xxxx ("counsel
for the Company"), as in the opinion of counsel for the Underwriters may be
necessary or advisable in connection with the distribution of the Shares or
any change in the price at which, or the terms upon which, the Shares may be
offered by you, and will use its best efforts to cause the same to become
effective as promptly as possible.
(d) The Company will comply with the Act and the Rules and
Regulations and the Exchange Act and the Exchange Act Regulations so as to
permit the continuance of sales of and dealings in the Shares under the Act
and the Exchange Act. If at any time when a prospectus is required to be
delivered under the Act an event shall have occurred as a result of which it
is necessary to amend or supplement the Prospectus in order to make the
statements therein not untrue or misleading in any material respect or to make
the Prospectus comply with the Act and the Rules and Regulations, the Company
will notify you promptly thereof and will, subject to the provisions of
Section 6.I.(a) hereof, file with the Commission an amendment or supplement
which will correct such statement in accordance with the requirements of
Section 10 of the Act.
(e) The Company will comply with all of the provisions of any
undertakings contained in the Registration Statement.
(f) The Company will take all reasonable actions to furnish to
whomever you direct, when and as requested by you, all necessary documents,
exhibits, information, applications, instruments and papers as may be required
or, in the opinion of counsel for the Underwriters, desirable in order to
permit or facilitate the sale of the Shares. The Company will use its best
efforts to qualify or register the Shares for sale under the blue sky laws of
such jurisdictions as you shall request, to make such applications, file such
documents and furnish such information as may be required for such purpose and
to comply with such laws so as to continue such qualification in effect so
long as required for the purposes of the distribution of the Shares; provided,
however, that the Company shall not be required to qualify as a foreign
corporation in any jurisdiction or to file a consent to service of process in
any jurisdiction in any action other than one arising out of the offering or
sale of the Shares.
(g) During the period of two years commencing on the Effective Date,
the Company will furnish to each Underwriter, in such number of copies as such
Underwriter may reasonably request, (i) within 90 days after the end of each
fiscal year of the Company, either (A) a consolidated balance sheet of the
Company, and a separate balance sheet of any subsidiaries of the Company the
accounts of which are not included in such consolidated balance sheet, as of
the end of such fiscal year, and consolidated statements of income and
retained earnings of the Company, and separate statements of income and
retained earnings of each of the Company and any subsidiaries of the Company
the accounts of which are not included in such consolidated statements, for
the fiscal year then ended, all in reasonable detail, prepared in accordance
with generally accepted accounting principles, consistently applied, and all
certified by independent accountants (within the meaning of the Act and the
Rules and Regulations), or (B) the Company's Form 10-K for such fiscal year as
filed with the Commission in accordance with the Exchange Act; (ii) within 45
days after the end of each of the first three fiscal quarters of each fiscal
year, either (A) similar balance sheets as of the end of such fiscal quarter
and similar statements of income and retained earnings for the fiscal quarter
then ended, all in reasonable detail, and all certified by the Company's
principal financial officer or the Company's principal accounting officer as
having been prepared in accordance with generally accepted accounting
principles, consistently applied, or (B) the Company's Form 10-Q for such
fiscal quarter as filed with the Commission in accordance with the Exchange
Act; (iii) as soon as available, each report and each proxy or information
statement furnished to or filed with the Commission or any securities exchange
and each report and financial statement furnished to the Company's
shareholders generally; and (iv) any material reports filed by the Company in
connection with the quotation of its Common Shares in the National Association
of Securities Dealers Automated Quotation System - National Market System
("NASDAQ/NMS") or any listing on any stock exchange.
(h) Counsel for the Company, Deloitte & Touche LLP and the officers
of the Company will respectively furnish the opinions, the letters and the
certificates referred to in subsections (e), (f), (g), and (i) of Section 8
hereof, and, in the event that the Company shall file any amendment to the
Registration Statement relating to the offering of the Shares or any amendment
or supplement to the Prospectus relating to the offering of the Shares
subsequent to the Effective Date, whether pursuant to subsection (c) of this
Section 6.I or otherwise, such counsel, such accountants, and such officers
will, at the time of such filing or at such subsequent time as you shall
specify, respectively, furnish to you such opinions, letters and certificates,
each dated the date of its delivery, of the same nature as the opinions, the
letters and the certificates referred to in said subsections (e), (f), (g),
and (i), respectively, as you may reasonably request, or, if any such opinion,
letter or certificate cannot be furnished by reason of the fact that such
counsel or such accountants or any such officer believes that the same would
be inaccurate, such counsel or such accountants or any such officer will
furnish an accurate opinion, letter or certificate with respect to the same
subject matter.
(i) Prior to the expiration of the Option, the Company will not
issue, directly or indirectly, without first consulting with you and counsel
for the Underwriters, any press release or other communication or hold any
press conference with respect to the Company or its activities or the offering
contemplated hereby.
(j) The Company will not, for a period of 180 days after the
Effective Date, issue, offer to sell, contract to sell or otherwise sell or
dispose of, directly or indirectly, any Common Shares, any options or warrants
to purchase any Common Shares, or any securities convertible into or
exchangeable for Common shares, otherwise than hereunder or (i) the issuance
of options under the 1993 Stock Option Plan or the Director Stock Option Plan,
(ii) the issuance of Common Shares under the Company's 401(k) Profit Sharing
Plan, or (iii) with the prior written consent of XxXxxxxx & Company
Securities, Inc. in its sole discretion; and the Company has caused each of
its current executive officers and directors and Xxxxxx Xxxxxx to execute and
deliver to you, on or before the date of this Agreement, an agreement
satisfactory in form and substance to you and counsel for the Underwriters,
whereby each agrees that he or she will not, for a period of 180 days after
the Effective Date, offer to sell, contract to sell or otherwise sell or
dispose of any Common Shares, any options or warrants to purchase any Common
Shares, or any securities convertible into or exchangeable for Common Shares,
owned directly by such person or with respect to which such Selling
Shareholder has the power of disposition, otherwise than (i) as a gift or
other private transfer or sale, provided the transferee or transferees agree
to be bound by this restriction or (ii) with the prior written consent of
XxXxxxxx & Company Securities, Inc. in its sole discretion.
(k) The Company will not at any time, directly or indirectly, take
any action designed to or which will constitute or which might reasonably be
expected to cause or result in the stabilization of the price of the Shares to
facilitate the sale or resale of any of the Shares.
(l) The Company will apply the net proceeds from the sale of the
Shares sold by it in the manner set forth under "Use of Proceeds" in the
Prospectus.
(m) The Company will file with the National Association of Securities
Dealers, Inc. ("NASD") all documents and notices required of companies that
have issued securities that are traded in the over-the-counter market and
quotations for which are reported by the NASDAQ/NMS.
(n) After the Closing Time and the Option Exercise Time, the Company
will be in compliance with the financial record-keeping requirements and
internal accounting control requirements of Section 13(b)(2) of the Exchange
Act.
(o) Not later than the 45th day following the end of the fiscal
quarter first occurring after the first anniversary of the Effective Date, the
Company will make generally available to its security holders and deliver to
you an earnings statement (which need not be audited) covering a period of at
least 12 months beginning not earlier than the Effective Date which shall
satisfy the provisions of Section 11(a) of the Act and/or Rule 158 promulgated
under the Act.
II. Each Selling Shareholder, severally and not jointly, covenants
and agrees with each of the Underwriters that:
(a) As soon as any Selling Shareholder is advised thereof, such
Selling Shareholder will advise the Representatives and confirm such advice in
writing, (i) of receipt by the Selling Shareholder or by any representative or
agent of such Selling Shareholder of any communication from the Commission
relating to the Registration Statement, the Prospectus or any preliminary
prospectus, or any notice or order of the Commission relating to the Company
or any of the Selling Shareholders in connection with the transactions
contemplated by this Agreement and (ii) of the happening of any event which
makes or may make any statement made in the Registration Statement, the
Prospectus or any preliminary prospectus untrue or that requires the making of
any change in the Registration Statement, the Prospectus or preliminary
prospectus, as the case may be, in order to make such statement, in light of
the circumstances in which it was made, not misleading.
(b) Such Selling Shareholder will deliver to the Representatives
prior to the Closing Time a properly completed and executed United States
Treasury Department Form W-9.
Section 7. Expenses. The Company and the Selling Shareholders will pay
and bear all costs, fees, taxes and expenses incident to the performance of
the obligations of the Company and the Selling Shareholders under this
Agreement, including, but not limited to: (a) the costs incident to the
issuance, sale and delivery to the Underwriters of the Shares; (b) the costs
incident to the preparation, printing and filing under the Act of each
preliminary prospectus, the Prospectus, the Registration Statement and any
amendments or supplements thereof and exhibits thereto; (c) the costs of
printing and distributing to the Representatives, the other Underwriters and
any Selected Dealers copies of any preliminary prospectus, the Prospectus, the
Registration Statement and any amendment or supplement to the Prospectus or
Registration Statement required by this Agreement or the Act; (d) the costs of
preparation, printing, mailing, delivery, filing and distribution of
preliminary and final blue sky memoranda, Underwriter's Questionnaires and
Powers of Attorney, letters to prospective Underwriters, the Agreement Among
Underwriters, the Selected Dealer Agreement, this Agreement and all documents
related thereto; (e) the filing fees of the Commission; (f) the costs of
qualification or registration of the Shares in the jurisdictions referred to
in Section 6.I.(f) hereof, including the legal fees and expenses of counsel
for the Underwriters in connection therewith, and all filing fees in
connection therewith; (g) the cost of preparation of all filings with NASD and
all filing fees in connection therewith (excepting fees and expenses of
counsel for the Underwriters); (h) fees and expenses of counsel for the
Company, the Company's accountants and the Company's consultants; (i) fees in
connection with the qualification of the Shares for quotation in NASDAQ/NMS;
and (j) all costs and expenses incurred or to be incurred by the Company and
the Selling Shareholders in connection with the transactions contemplated by
this Agreement. The provisions of this Section 7 are intended to relieve the
Underwriters from the payment of the expenses and costs which the Selling
Shareholders and the Company hereby agree to pay, but shall not affect any
agreement which the Selling Shareholders and the Company may make, or may have
made, for the sharing of any such expenses and costs. Such agreements shall
not impair the obligations of the Company and the Selling Shareholders
hereunder to the several Underwriters. If the Firm Shares are not sold to the
Underwriters by reason of any failure, refusal or inability on the part of the
Company or the Selling Shareholders to perform any agreement on their part to
be performed hereunder or to fulfill any condition of the Underwriters'
obligations hereunder, or if you shall terminate this Agreement pursuant to
Section 10(a)(ii) hereof, the Company and the Selling Shareholders shall
reimburse you for all of the actual out of pocket expenses reasonably incurred
in connection with the financing including without limitation all reasonable
fees and disbursements of counsel for the Underwriters in connection
therewith.
Section 8. Conditions of the Underwriters' Obligations. The
Underwriters' obligations hereunder to purchase and pay for the Shares are
subject (as of the date hereof, the Closing Time and the Option Exercise Time)
to the accuracy of and compliance with the representations and warranties of
the Company and the Selling Shareholders herein and in each certificate and
document contemplated under this Agreement to be delivered, to the performance
by the Company and the Selling Shareholders of their covenants and agreements
hereunder and under each such certificate and document, and to the following
additional conditions:
(a)(i) The Registration Statement shall have become effective not
later than 5:00 P.M., Indianapolis time, on the date of this Agreement, or at
such later time or on such later date as you may agree to in writing; (ii) if
required, the Prospectus shall have been filed with the Commission pursuant to
Rule 424(b)(1) or (4) of the Rules and Regulations within the applicable time
period prescribed for such filing thereunder and in accordance with the
provisions of Section 6.I.(b) hereof, (iii) at or prior to the Closing Time or
the Option Exercise Time, as the case may be, no stop order suspending the
effectiveness of the Registration Statement or the qualification or
registration of the Shares under the blue sky laws of any jurisdiction shall
have been issued and no proceeding for that purpose shall have been initiated
or shall be threatened or contemplated by the Commission or the authorities of
any such jurisdiction; (iv) any request for additional information on the part
of the Commission or any such authorities shall have been complied with to the
satisfaction of the Commission or such authorities and to the reasonable
satisfaction of counsel for the Underwriters; (v) the NASD, upon review of the
terms of the public offering of Shares, shall not have objected to such
offering, such terms, or the Underwriters' participation in the same; and (vi)
after the date hereof, no amendment or supplement to the Registration
Statement or the Prospectus shall have been filed without your prior consent.
(b) You shall not have advised the Company that the Registration
Statement or the Prospectus or any amendment thereof or supplement thereto, in
your reasonable judgment after conferring with counsel for the Underwriters,
contains an untrue statement of a fact which is material, or omits to state a
fact which is material and is required to be stated therein or is necessary to
make the statements therein, in light of the circumstances under which they
were made, not misleading.
(c) Between the time of the execution and delivery of this Agreement
and the Closing Time or the Option Exercise Time, as the case may be, there
shall be no litigation instituted against the Company, the Subsidiaries or any
of their officers or directors, as such, and between such dates there shall be
no proceeding instituted or threatened against the Company or the Subsidiaries
or any of their officers or directors, as such, before or by any federal,
state, county or local commission, regulatory body, administrative agency or
other governmental body, domestic or foreign, in which litigation or
proceeding an unfavorable ruling, decision or finding would have a Material
Adverse Effect.
(d) Each of the representations and warranties of the Company and the
Selling Shareholders contained herein and in each certificate and document
contemplated under this Agreement to be delivered shall be true and correct at
the Closing Time and the Option Exercise Time as if made at the Closing Time
or the Option Exercise Time, as the case may be, and all covenants and
agreements contained herein, and in each such certificate and document, to be
performed on the part of the Company and the Selling Shareholders and all
conditions contained herein and in each such certificate and document to be
fulfilled or complied with by the Company and the Selling Shareholders at or
prior to the Closing Time or the Option Exercise Time, as the case may be,
shall have been duly performed, fulfilled or complied with.
(e) At the Closing Time and the Option Exercise Time, counsel for the
Company and the Selling Shareholders shall furnish to you an opinion, in form
and substance reasonably satisfactory to you and your counsel, dated as of the
date of its delivery, to the effect that:
(i) The Company and each of the Subsidiaries (other than CCP) have
been duly incorporated and are validly existing as corporations under the laws
of their respective jurisdictions of incorporation. CCP has been duly
organized and validly exists as a general partnership under the laws of the
State of Indiana. Each of the Company and the Subsidiaries has the power and
authority to own, lease and operate their properties and to conduct their
businesses as described in the Prospectus, and is duly qualified to do
business and is in good standing in each jurisdiction in which the ownership
or leasing of their properties or the conduct of their businesses require such
qualification, except where the failure so to qualify would not have a
Material Adverse Effect.
(ii) The Company has the corporate power and authority to enter into
this Agreement, and has the power and authority to issue, sell and deliver to
the Underwriters the Shares to be issued and sold by it hereunder.
(iii) This Agreement and the issuance of the Shares pursuant hereto
each has been duly authorized by all necessary corporate action on the part of
the Company and this Agreement has been duly executed and delivered by the
Company.
(iv) The authorized, issued and outstanding capital stock of the
Company is as set forth in the Prospectus under the caption "Capitalization"
as of the Closing Time; and the issued and outstanding Common Shares,
including the Shares to be sold by the Selling Shareholders, have been duly
and validly authorized and issued, are fully paid and nonassessable, and have
not been issued in violation of any preemptive right.
(v) The Firm Shares or the Option Shares, as the case may be, to be
issued by the Company pursuant to the terms of this Agreement will be, upon
issuance and delivery against payment therefor in accordance with the terms
hereof, duly authorized and validly issued and fully paid and nonassessable,
and not issued in violation of any preemptive right and the holders of the
Shares will not be subject to personal liability for the obligations of the
Company solely by reason of being such a holder.
(vi) To such counsel's knowledge, no holders of Common Shares or
other securities of the Company have registration rights with respect to
securities of the Company because of the filing or effectiveness of the
Registration Statement.
(vii) The terms and provisions of the Common Shares (including the
Shares) conform in all material respects to the description thereof contained
in the Registration Statement and Prospectus; and the forms of certificates
evidencing the Common Shares (including the Shares) comply with the Indiana
Business Corporation Law.
(viii) The execution and delivery of this Agreement by the Company,
and the consummation by it of the transactions herein contemplated did not and
will not, (x) result in any violation of any of the Company's and the
Subsidiaries' respective articles of incorporation, by-laws or agreement of
partnership (or other similar constituent documents), or (y) result in the
breach or violation of any of the terms and provisions, or constitute a
default under, any indenture, mortgage or other agreement or instrument known
to such counsel to which the Company or any of the Subsidiaries is a party or
by which their properties are bound, or any applicable statute, rule or
regulation or any order, writ or decree known to such counsel of any court or
governmental agency or body having jurisdiction over the Company or any of the
Subsidiaries or any of their properties; provided however, that no opinion
need be rendered concerning state securities or blue sky laws.
(ix) No authorization, approval or consent of any governmental
authority or agency is necessary in connection with the execution, delivery
and performance of this Agreement and the consummation of the transactions
contemplated hereby by the Company and the Selling Shareholders, except such
as have been obtained under the Act or the Exchange Act, or such as may be
required under state or other securities or blue sky laws in connection with
the purchase and the distribution of the Shares by the Underwriters.
(x) The Registration Statement has become effective under the Act
and, to such counsel's knowledge, (a) no stop order suspending the
effectiveness of the Registration Statement has been issued and (b) no
proceedings for that purpose have been instituted or are pending or threatened
under the Act. The opinion delivered at the Closing Time shall confirm that
all filings required by Rule 424 and, if applicable, Rule 430A, of the Rules
and Regulations have been made.
(xi) Each of the Registration Statement and the Prospectus, and each
amendment or supplement thereto (other than the financial statements,
financial data and supporting schedules included in such financial statements,
as to which such counsel need express no opinion) as of the effective date of
the Registration Statement, complied as to form with and appeared on its face
to be appropriately responsive in all material respects to the requirements of
the Act and the applicable Rules and Regulations.
(xii) Each of the documents incorporated by reference in the
Registration Statement and the Prospectus and any amendments and supplements
thereto (other than the financial statements, financial data and supporting
schedules included in such financial statements, as to which such counsel need
express no opinion), on the date of filing thereof with the Commission,
complied as to form with and appeared on its face to be appropriately
responsive in all material respects to the requirements of the Exchange Act
and the Exchange Act Regulations.
(xiii) The descriptions included or incorporated by reference in the
Registration Statement and the Prospectus of contracts are accurate in all
material respects and fairly present the information required by the Act or
the Rules and Regulations to be presented; and to such counsel's knowledge,
there are no contracts or documents of a character required to be described or
referred to in the Registration Statement or Prospectus or to be filed as an
exhibit to the Registration Statement that are not described or referred to
therein and filed as required.
(xiv) Neither the Company nor any of the Subsidiaries is an
"investment company" as defined in Section 3(a) of the Investment Company Act
of 1940, as amended, and, if the Company and Subsidiaries conduct their
businesses as set forth in the Registration Statement and the Prospectus, will
not become an "investment company" and will not be required to register under
the Investment Company Act of 1940, as amended.
(xv) Each Selling Shareholder that is not a natural person has full
right, power and authority to enter into and perform its obligations under the
Power of Attorney and Custody Agreement to be executed and delivered by it;
the Power of Attorney and Custody Agreement of each Selling Shareholder that
is not a natural person has been duly authorized by such Selling Shareholder;
the Power of Attorney and Custody Agreement of each Selling Shareholder has
been duly executed and delivered by or on behalf of such Selling Shareholder;
and the Power of Attorney and Custody Agreement of each Selling Shareholder
constitutes the valid and binding agreement of such Selling Shareholder,
enforceable in accordance with its terms, except as the enforcement thereof
may be limited by bankruptcy, insolvency, reorganization, moratorium or other
similar laws relating to or affecting creditors' rights generally or by
general equitable principles.
(xvi) Each Selling Shareholder has full right, power and authority to
enter into and to perform its obligations under this Agreement and to sell,
transfer and deliver the Shares to be sold by such Selling Shareholder
hereunder.
(xvii) This Agreement has been duly authorized by each Selling
Shareholder that is not a natural person and has been duly executed and
delivered by or on behalf of each Selling Shareholder.
In addition, such counsel shall confirm that although they have not
verified the accuracy or completeness of the statements contained or
incorporated by reference in the Registration Statement or the Prospectus,
nothing has come to the attention of such counsel which caused them to believe
that, at the time the Registration Statement became effective, the
Registration Statement (except as to financial statements, financial data and
supporting schedules contained in such financial statements, as to which such
counsel need express no opinion) contained any 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 the Prospectus
(except as aforesaid), as of date of the Prospectus and as of the Closing Time
or the Option Exercise Time, as the case may be, contained any 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, in light of the
circumstances under which they were made, not misleading.
Such opinion shall be to such further effect with respect to other legal
matters relating to this Agreement and the sale of the Shares hereunder as
counsel for the Underwriters may reasonably request. In rendering the
opinions and confirmations set forth above, such counsel may rely upon
certificates of officers of the Company, the Selling Shareholders and public
officials as to matters of fact.
(f) Concurrently with the execution and delivery of this Agreement,
at the Closing Time and at the Option Exercise Time, Deloitte & Touche LLP
shall have furnished to you a letter, dated as of the date of its delivery,
addressed to you and in form and substance reasonably satisfactory to you, to
the effect set forth in Annex I hereto.
(g) At the Closing Time, and at the Option Exercise Time, there shall
be furnished to you, on behalf of the Company, a certificate, dated the date
of its delivery, signed by both the chief executive officer and the chief
financial officer of the Company, in form and substance reasonably
satisfactory to you, to the effect that:
(i) Each signer of such certificate has carefully examined the
Registration Statement and the Prospectus and (A) to the signer's knowledge,
as of the date of such certificate and as of the Effective Date, the
statements in the Registration Statement and the Prospectus are and were true
and correct in all material respects and neither the Registration Statement
nor the Prospectus omits to state a material fact required to be stated
therein or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading; (B) since the
Effective Date, no event has occurred of which the signer has knowledge and
which was required by the Act or the Rules and Regulations to be set forth in
a supplement to or amendment of the Prospectus but which has not been so set
forth; and (C) since the dates as of which and the periods for which
information is given in the Registration Statement and the Prospectus, there
has not been to the signer's knowledge any material adverse change, financial
or otherwise, in the condition or business prospects of the Company from that
set forth in the Registration Statement and the Prospectus, other than changes
which the Registration Statement and the Prospectus specifically disclose have
occurred or may occur subsequent to the Effective Date.
(ii) No stop order suspending the effectiveness of the Registration
Statement has been issued, and no proceedings for such purpose have been
commenced or are, to the knowledge of each signer of such certificate,
threatened or contemplated by the Commission.
(iii) The Company has not received notice that any stop order
suspending the qualification or registration of any of the Shares under the
blue sky laws of any jurisdiction has been issued, or that any proceedings for
such purpose have been commenced, and, to the knowledge of each signer of such
certificate, no such proceedings are threatened or contemplated by any
jurisdiction.
(iv) The conditions, separately set forth in such certificate,
contained in subsections (a), (c) and (j) of this Section 8 have been complied
with.
(v) There has been no breach of any of the terms or provisions of the
agreements referred to in Section 6.I.(j) hereof.
(vi) Each of the representations and warranties of the Company
contained in this Agreement and in each certificate and document contemplated
under this Agreement to be delivered to you was, when originally made and is,
at the time such certificate is dated, true and correct.
(vii) Each of the covenants required herein to be performed by the
Company on or prior to the date of such certificate has been duly, timely and
fully performed and each condition herein required to be complied with by the
Company on or prior to the date of such certificate has been duly, timely and
fully complied with by the Company.
(h) At the Closing Time and at the Option Exercise Time, there shall
be furnished to you a certificate from the Attorney-in-Fact for each Selling
Shareholder to the effect that, as of the Closing Time or the Option Exercise
Time, as the case may be, he has not been informed that: (i) the
representations and warranties made by such Selling Shareholder herein are not
true or correct, as if made at and as of the Closing Time or the Option
Exercise Time; and (ii) such Selling Shareholder has not complied with all the
obligations and satisfied all the conditions on its part to be performed or
satisfied at or prior to the Closing Time or the Option Exercise Time.
(i) The Company and the Selling Shareholders shall have furnished to
you such certificates, in addition to those specifically mentioned herein, as
you may have reasonably requested in a timely manner as to the accuracy and
completeness, at the Closing Time and the Option Exercise Time, of any
statement in the Registration Statement or the Prospectus; as to the accuracy,
at the Closing Time and the Option Exercise Time, of the representations and
warranties of the Company and the Selling Shareholders herein and in each
certificate and document contemplated under this Agreement to be delivered to
you; as to the performance by the Company and the Selling Shareholders of
their obligations hereunder and under each such certificate and document; or
as to the fulfillment of the conditions concurrent and precedent to your
obligations hereunder.
(j) Except as contemplated by the Registration Statement and the
Prospectus, since the date hereof, there shall not have been any change in the
capitalization of the Company or change in the business, business prospects,
financial condition or results of operations of the Company or in the value of
the assets of the Company which would have a Material Adverse Effect.
(k) Each of the agreements referred to in Section 6.I.(j) hereof
shall have been delivered to you and there shall have been no breach of any
such agreement.
(l) All corporate proceedings and other legal matters relating to the
sale and transfer of the Shares, this Agreement, the Registration Statement,
the Prospectus and other related matters shall be reasonably satisfactory in
all material respects to counsel for the Underwriters, who shall have
furnished to you at the Closing Time and Option Exercise Time such opinion, in
form and substance reasonably satisfactory to you, with respect to the
sufficiency of the aforementioned corporate proceedings and other legal
matters as you may reasonably require; and the Company shall have furnished to
such counsel such records and documents as such counsel may have reasonably
requested in a timely manner for the purpose of enabling them to pass upon
such matters.
(m) The Shares shall be authorized for quotation in NASDAQ/NMS and/or
approved for listing in NASDAQ/NMS upon notice of issuance which notice shall
have been given.
All of the opinions, letters, evidence and certificates mentioned above
or elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if they are in form and substance reasonably
satisfactory to counsel for the Underwriters. You reserve the right to waive
any condition hereinabove set forth.
Section 9. Indemnification and Contribution.
(a) The Company and each of the Selling Shareholders, jointly and
severally, agree to indemnify and hold harmless each Underwriter and each
person who controls an Underwriter within the meaning of Section 15 of the Act
or Section 20 of the Exchange Act and each and all of them, from and against
any and all losses, claims, damages, liabilities or actions, joint or several
(including any investigation, legal or other expense incurred in connection
with, and any amount paid in settlement of, any action, suit or proceeding or
any claim asserted), to which an Underwriter or they or any of them may become
subject under the Act, the Exchange Act or otherwise but only insofar as such
losses, claims, damages, liabilities or actions arise out of, or are based
upon,
(i) any untrue statement or alleged untrue statement made by the
Company or either of the Selling Shareholders in Section 3 of this Agreement;
or
(ii) any untrue statement or alleged untrue statement of a material
fact contained in the Registration Statement, any preliminary prospectus, the
Prospectus or any amendment or supplement thereto or in any application or
other document executed by the Company or the Selling Shareholders based upon
written information furnished by or on behalf of the Company or the Selling
Shareholders filed in any jurisdiction in order to register or qualify the
Shares under the securities laws thereof or filed with the Commission, or the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading;
provided, however, that the indemnity agreement contained in this subsection
(a) shall not extend to any Underwriter in respect of any such losses, claims,
damages, liabilities or actions arising out of, or based upon, any such untrue
statement or alleged untrue statement or any such omission or alleged
omission, if such statement or omission was made in reliance upon information
furnished in writing to the Company through you or on behalf of any
Underwriter specifically for use in connection with the preparation of the
Registration Statement, any preliminary prospectus or the Prospectus or any
such amendment or supplement thereto and, provided further, that the indemnity
agreement provided in this subsection (a) with respect to any preliminary
prospectus shall not inure to the benefit of any Underwriter from whom the
person asserting any losses, claims, damages, liabilities or actions based
upon any untrue statement or alleged untrue statement of material fact or
omission or alleged omission to state therein a material fact purchased
Shares, if a copy of the Prospectus in which such untrue statement or alleged
untrue statement or omission or alleged omission was corrected has not been
sent or given to such person within the time required by the Act and the Rules
and Regulations thereunder, unless such failure is the result of noncompliance
by the Company with Section 5(a) hereof. The Company and the Selling
Shareholders agree to pay any legal and other expenses for which they are
liable under this subsection (a) from time to time (but not more frequently
than monthly) within 30 days after its receipt of a xxxx therefor.
(b) Each Underwriter, severally and not jointly, agrees to indemnify
and hold harmless the Company, its directors and officers who shall have
signed the Registration Statement, and each person, if any, who controls the
Company within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act and the Selling Shareholders (i) to the same extent as the
foregoing indemnity from the Company and the Selling Shareholders to such
Underwriter, but in each case to the extent, and only to the extent, that any
statement in or omission from or alleged omission from the Registration
Statement, any preliminary prospectus, the Prospectus or any amendment or
supplement thereto was made in reliance upon information furnished in writing
to the Company by such Underwriter specifically for use in connection with the
preparation of the Registration Statement, any preliminary prospectus or the
Prospectus or any such amendment or supplement thereto, and (ii) to the extent
any such loss, claim, damage, liability or action arises out of, or is based
upon a failure or alleged failure of such Underwriter to deliver the
Prospectus as required by applicable laws. Each Underwriter agrees to pay any
legal and other expenses for which it is liable under this subsection (b) from
time to time (but not more frequently than monthly) within 30 days after
receipt of a xxxx therefor.
(c) If any action is brought against a person entitled to
indemnification pursuant to the foregoing subsection (a) or (b) (an
"indemnified party") in respect of which indemnity may be sought against a
person granting indemnification (an "indemnifying party") pursuant to such
subsections, such indemnified party shall promptly notify such indemnifying
party in writing of the commencement thereof; but the omission so to notify
the indemnifying party of any such action shall not release the indemnifying
party from any liability it may have to such indemnified party otherwise than
on account of the indemnity agreement contained in subsection (a) or (b) of
this Section 9. In case any such action is brought against an indemnified
party and it notifies an indemnifying party of the commencement thereof, the
indemnifying party against which a claim is to be made will be entitled to
participate therein at its own expense and, to the extent that it may wish, to
assume at its own expense the defense thereof, with counsel reasonably
satisfactory to such indemnified party; provided, however, that (i) if the
defendants in any such action include both the indemnified party and the
indemnifying party and the indemnified party shall have reasonably concluded
based upon advice of counsel that there may be legal defenses available to it
and/or other indemnified parties which are different from or additional to
those available to the indemnifying party, the indemnified party shall have
the right to select separate counsel to assume such legal defenses and
otherwise to participate in the defense of such action on behalf of such
indemnified party or parties; and (ii) in any event, the indemnified party
shall be entitled to have counsel chosen by such indemnified party participate
in, but not conduct, the defense. Upon receipt of notice from the
indemnifying party to such indemnified party of its election so to assume the
defense of such action and approval by the indemnified party of counsel, the
indemnifying party will not be liable to such indemnified party under this
Section 9 for any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof unless (x) the
indemnified party shall have employed such counsel in connection with the
assumption of legal defenses in accordance with proviso (i) to the next
preceding sentence (it being understood, however, that the indemnifying party
shall not be liable for the expenses of more than one separate counsel); (y)
the indemnifying party shall not have employed counsel reasonably satisfactory
to the indemnified party to represent the indemnified party within a
reasonable time after notice of commencement of the action; or (z) the
indemnifying party has authorized the employment of counsel for the
indemnified party at the expense of the indemnifying party. An indemnifying
party shall not be liable for any settlement of any action or proceeding
effected without its written consent.
(d) In order to provide for just and equitable contribution in
circumstances in which the indemnity agreement provided for in subsection (a)
or (b) of this Section 9 is unavailable in accordance with its terms, the
Company, the Selling Shareholders and, subject to the limitations set forth
below, the Underwriters shall contribute to the aggregate losses, claims,
damages and liabilities, of the nature contemplated by said indemnity
agreement, incurred by the Company, the Selling Shareholders and one or more
Underwriters, in such proportions as are applicable to reflect the relative
benefits received by the Company and the Selling Shareholders, on the one
hand, and the Underwriters, on the other hand, from the offering of the
Shares; provided, however, that if such allocation is not permitted by
applicable law or if the indemnified party failed to give the notice required
under subsection (c) of this Section 9, then the relative fault of the Company
and the Selling Shareholders, on the one hand, and the Underwriters, on the
other hand, in connection with the statements or omissions which resulted in
such losses, claims, damages and liabilities and other relevant equitable
considerations will be considered together with such relative benefits. The
relative benefits received by the Company and the Selling Shareholders, on the
one hand, and the Underwriters, on the other hand, shall be deemed to be in
such proportion as the total net proceeds from the offering (before deducting
expenses) received by the Company and the Selling Shareholders bear to the
total underwriting discount received by the Underwriters, in each case as set
forth in the table on the cover page of the Prospectus and in the notes
thereto. The relative fault of the Company and the Selling Shareholders, on
the one hand, and of the Underwriters, on the other hand, shall be determined
by reference to, among other things, whether in the case of an untrue
statement or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact, such statement or omission relates
to information supplied by the Company, by a Selling Shareholder or by the
Underwriters, and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such untrue statement or
omission. The Company, the Selling Shareholders and the Underwriters agree
that it would not be just and equitable if contribution pursuant to this
subsection (d) were determined by pro-rata allocation (even if the
Underwriters were treated as one entity for such purpose) or by any other
method of allocation that does not take account of the equitable
considerations referred to in this subsection (d). The amount paid or payable
by the indemnified party as a result of the losses, claims, damages or
liabilities referred to above in this subsection (d) shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending against or appearing as a
third-party witness in any such action or claim. Notwithstanding the
provisions of this subsection (d), (i) no Underwriter shall be required to
contribute any amount in excess of the amount by which the total price at
which the Shares purchased by it were offered to the public exceeds the amount
of any damages which such Underwriter has otherwise been required to pay by
reason of such untrue or alleged untrue statement or omission or alleged
omission; and (ii) 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 is not guilty of such fraudulent misrepresentation. For purposes
of this subsection (d), each person, if any, who controls an Underwriter
within the meaning of Section 15 of the Act or Section 20 of the Exchange Act
shall have the same rights to contribution as such Underwriter. The
Underwriters' obligations to contribute pursuant to this subsection (d) are
several in proportion to their respective underwriting commitments and not
joint.
(e) The liability of each Selling Shareholder under the
representations and warranties contained in Section 3.II. hereof and under the
indemnity agreements contained in the provisions of this Section 9 shall be
limited to an amount equal to the initial public offering price of the Firm
Shares and the Option Shares sold by such Selling Shareholder to the
Underwriters minus the amount of the underwriting discount paid thereon to the
Underwriters by such Selling Shareholder. The Company and the Selling
Shareholders may agree, as among themselves and without limiting the rights of
the Underwriters under this Agreement, as to the respective amounts of such
liability for which they each shall be responsible.
(f) The respective indemnity and contribution agreements by the
Underwriters, the Selling Shareholders and the Company contained in
subsections (a), (b), (c), (d) and (e) of this Section 9, and the respective
covenants, representations and warranties of the Company and the Selling
Shareholders set forth in Sections 2, 3, 4, 5, 6 and 7 hereof, shall remain
operative and in full force and effect regardless of (i) any investigation
made by any Underwriter, on its behalf or by or on behalf of any person who
controls an Underwriter, the Company or any controlling person of any of the
Company or any director or officer of the Company or any Selling Shareholder;
(ii) acceptance of any of the Shares and payment therefor; or (iii) (with
respect to Section 7 and this Section 9 only) any termination of this
Agreement, and shall survive the delivery of the Shares, and any successor of
any Underwriter, the Company or any Selling Shareholder, or of any person who
controls any Underwriter, the Company or any Selling Shareholder, as the case
may be, shall be entitled to the benefit of such respective indemnity and
contribution agreements. The respective indemnity and contribution agreements
by the Underwriters, the Selling Shareholders and the Company contained in
subsections (a), (b), (c), (d) and (e) of this Section 9 shall be in addition
to any liability which the Underwriters, the Selling Shareholders and the
Company may otherwise have.
Section 10. Termination.
(a) This Agreement (except for the provisions of Sections 7 and 9
hereof) may be terminated by you by notifying the Company and the Selling
Shareholders at any time:
(i) prior to the earliest of (A) 11:00 A.M., Indianapolis time, on
the business day immediately following the date hereof, (B) the time of
release by the Representatives for publication of the first newspaper
advertisement which subsequently is published with respect to the Shares or
(C) the time when the Shares are first generally offered by the
Representatives to dealers by letter or telegram;
(ii) at or prior to the Closing Time if any of the conditions
specified in Section 8 hereof shall not have been fulfilled when and as
required by this Agreement to be fulfilled or if any of the covenants,
representations or warranties contained herein or in any certificate or
document contemplated under this Agreement to be delivered to you shall not
have been satisfied or fulfilled within the respective times herein provided
for, unless compliance therewith or performance or satisfaction thereof shall
have been expressly waived by you in writing; or
(iii) at or prior to the Closing Time if any one or more of the
following shall have occurred or have been established between the time of
your execution of this Agreement and the Closing Time and in your judgment the
same has made or makes it inadvisable or impracticable for you generally to
proceed with the offering, sale, delivery, or collection of payment for, the
Shares pursuant to the public offering contemplated by this Agreement: (A) a
general suspension of, or a general limitation on prices for, trading in
securities on the New York Stock Exchange, American Stock Exchange, NASDAQ/NMS
or in the over-the-counter market; (B) any new legal or regulatory restriction
materially affecting the distribution of securities generally or of the
Shares; (C) a material adverse change in general market or economic
conditions, either domestic or foreign, from such conditions on the date
hereof; (D) a declaration of a banking moratorium by Federal or New York,
Indiana, or Ohio state authorities; (E) any outbreak of major hostilities or
other national or international calamity; (F) a material interruption in the
mail service or other means of communications within the United States; (G) an
action by any government in respect of its monetary affairs which, in your
opinion, has a material adverse effect on the United States securities
markets; or (H) any material adverse change or any material adverse
development involving a prospective change not contemplated in the
Registration Statement or Prospectus or affecting particularly the business or
properties of the Company.
(b) Your right to terminate under subsections (a)(ii) and (a)(iii) of
this Section 10 will not be waived or otherwise relinquished because you do
not give the required notice of termination prior to the time that the event
giving rise to the right to terminate shall have ceased to exist, provided
that you give the required notice prior to the Closing Time.
Section 11. Default of Underwriters. If any Underwriter or Underwriters
default in their obligation to take and pay for Firm Shares or Option Shares
and the aggregate number of Firm Shares or Option Shares which such defaulting
Underwriter or Underwriters agreed but failed to purchase does not exceed 10%
of the aggregate number of Firm Shares or Option Shares, as the case may be,
the other Underwriters shall be obligated severally in proportion to their
respective commitments hereunder to purchase the Firm Shares or Option Shares
which such defaulting Underwriter or Underwriters agreed but failed to
purchase. If any Underwriter or Underwriters so default and the aggregate
number of Firm Shares or Option Shares with respect to which such default or
defaults occur is more than 10% of the aggregate number of Firm Shares or
Option Shares, as the case may be, and arrangements satisfactory to you and
the Company for the purchase of such Firm Shares or Option Shares by other
persons (who may include one or more of the non-defaulting Underwriters
including you) are not made within 36 hours after such default, this Agreement
may be terminated by you. If such arrangements satisfactory to you and the
Company shall have been made within such 36-hour period as aforesaid, (a) the
Company shall have the right to postpone the time of delivery for a period of
not more than seven full business days, in order to effect whatever changes
may thereby be made necessary in the Registration Statement or the Prospectus,
or in any other documents or arrangements, and the Company agrees promptly to
file any amendments to the Registration Statement or supplements to the
Prospectus which may thereby be made necessary, and (b) the respective number
of Firm Shares or Option Shares, as the case may be, to be purchased by the
remaining Underwriters and substituted underwriters shall be taken as the
basis of their underwriting obligation.
In the event of any termination of this Agreement pursuant to this
Section 11, neither the Company nor any Selling Shareholder shall be liable to
any Underwriter (except as provided in Section 7 (with the exception of the
last sentence thereof) and Section 9 hereof) nor shall any Underwriter (other
than an Underwriter who shall have failed, otherwise than for some reason
permitted under this Agreement, to purchase the number of Firm Shares or
Option Shares agreed by such Underwriter to be purchased hereunder, which
Underwriter shall remain liable to the Company and the other Underwriters for
damages, if any, resulting from such default) be liable to the Company or any
Selling Shareholder (except to the extent provided in Section 9 hereof). As
used in this Agreement, the term "Underwriter" includes any person substituted
for an Underwriter under this Section 11. Nothing herein shall relieve a
defaulting Underwriter from liability for its default.
Section 12. Notice. Except as otherwise expressly provided in this
Agreement, whenever advice or a notice, objection, designation, request or
report is given or is required by the provisions of this Agreement to be
given, such advice, notice, objection, designation, request or report shall be
in writing, by telegraph confirmed in writing, or by telecopy confirmed by
letter (a) if to the Company, addressed to the Company and delivered at
Crossmann Communities, Inc., 0000 Xxxxx Xxxxxxxx Xxxxxx, Xxxxxxxxxxxx, Xxxxxxx
00000, telecopier number (000) 000-0000, Attention: Xxxx X. Xxxxxxxxx, with a
copy to Ice Xxxxxx Xxxxxxx & Xxxx, Xxx Xxxxxxxx Xxxxxx, Xxx 00000,
Xxxxxxxxxxxx, Xxxxxxx 00000-0000, telecopier number (000)000-0000, Attention:
Xxxxxx X. Xxxxx, Esq.; (b) if to you or the Underwriters, addressed to
XxXxxxxx & Company Securities, Inc., and delivered at Xxx Xxxxxxxx Xxxxxx,
Xxxxx 0000, Xxxxxxxxxxxx, Xxxxxxx 00000, telecopier number (000) 000-0000,
Attention: Xxxxxx X. Xxxxx III, First Vice President, and XxXxxxxx & Company
Securities, Inc., Suite 2100, 000 Xxxxxxxx Xxxxxx, Xxxxxxxxx, Xxxx 00000-0000,
telecopier number (000) 000-0000, Attention: Equity Syndicate Department,
with a copy to Xxxxx & Xxxxxxx, 000 Xxxxx Xxxxxxxx Xxxxxx, Xxxxx 0000,
Xxxxxxxxxxxx, Xxxxxxx 00000, telecopier number (000) 000-0000, Attention:
Xxxxx X. Xxxxxxxxx, Esq.; and (c) if to one or more of the Selling
Shareholders, to Xxxx X. Xxxxxxxxx , as Attorney-in-Fact, at 0000 Xxxxx
Xxxxxxxx Xxxxxx, Xxxxx 000, Xxxxxxxxxxxx, Xxxxxxx 00000, telecopier number
(000) 000-0000; or at such other address as a party hereto may give notice in
accordance herewith.
Section 13. Miscellaneous.
(a) This Agreement is made solely for the benefit of the parties
hereto, their officers and directors, those who shall have signed the
Registration Statement and any controlling person referred to in Section 9
hereof, and their respective executors, administrators, successors and
assigns, and no other person, partnership, association or corporation shall
acquire or have any right under or by virtue of this Agreement. The term
"successor" or the term "successors and assigns" as used in this Agreement
shall not include any buyer, as such, of any of the Shares from the
Underwriters. All of the obligations of the Underwriters hereunder are
several and not joint.
(b) The information in the Prospectus under the caption
"Underwriting" with respect to (i) the names of, and number of Shares to be
purchased by, each of the Underwriters and (ii) the amounts of the selling
discount and reallowance shall constitute the only information furnished in
writing by or on behalf of the several Underwriters for use in connection with
the preparation of the Registration Statement as originally filed or in any
amendment thereto, any preliminary prospectus or the Prospectus as the case
may be.
(c) This Agreement shall supersede any agreement or understanding,
oral or in writing, express or implied, between the Company and you or any of
the Selling Shareholders and you relating to the sale of any of the Shares.
(d) No change, amendment or supplement to, or waiver of, this
Agreement or any term, provision or condition contained herein, shall be valid
or of any effect unless in writing and signed by the party against whom such
is asserted.
(e) This Agreement shall be governed by and construed in accordance
with the law of the State of Indiana applicable to contracts made and to be
performed therein without giving effect to the principles of conflicts of law
thereof.
(f) This Agreement may be signed in two or more counterparts with the
same effect as if the signatures to each counterpart were upon a single
instrument, and all such counterparts together shall be deemed an original of
this Agreement.
[SIGNATURES APPEAR ON FOLLOWING PAGE]
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us the enclosed copy hereof, whereupon it
will be a binding agreement by and among the parties in accordance with its
terms.
Very truly yours,
Crossmann Communities, Inc.
By: ______________________________
Its: ______________________________
Selling Shareholders
By: ______________________________
As Attorney-in-Fact for the Selling
Shareholders named in Schedule B
hereto.
Accepted as of the date first written above:
XxXxxxxx & Company Securities, Inc.
Xxxxxx, Read & Co. Inc.
Xxxxxxx Xxxxx & Associates, Inc.
Acting on behalf of themselves and as the
Representatives of the several Underwriters
XxXxxxxx & Company Securities, Inc.
By: ______________________________
Its: ______________________________
4
ANNEX I
Pursuant to Section 8(f) of the Underwriting Agreement, Deloitte & Touche
LLP shall furnish letters to the Underwriters to the effect that:
(i) They are independent public accountants with respect to the
Company within the meaning of the Act and the applicable published rules and
regulations thereunder;
(ii) In their opinion, the consolidated financial statements and any
financial statement schedules audited by them and included or incorporated by
reference in the Registration Statement comply as to form in all material
respects with the applicable accounting requirements of the Act and the
Exchange Act and the related published rules and regulations;
(iii) On the basis of limited procedures, not constituting an
examination in accordance with generally accepted auditing standards, but
including a review of interim financial information as described in SAS No.
71, Interim Financial Information, on the unaudited consolidated financial
statements for each of the three-month periods ended since the date of the
latest audited consolidated financial statements included or incorporated by
reference in the Registration Statement, reading of the latest available
interim financial statements of the Company, inspection of the minute books of
the Company since the date of the latest audited consolidated financial
statements included or incorporated by reference in the Registration
Statement, inquiries of officials of the Company responsible for financial and
accounting matters and such other inquiries and procedures as may be specified
in such letter, nothing came to their attention that caused them to believe
that:
(A) any material modifications should be made to the unaudited
consolidated financial statements for each of the three-month periods ended
since the date of the latest audited financial statements included or
incorporated by reference in the Registration Statement for them to be in
conformity with GAAP; or that such financial statements do not comply as to
form in all material respects with the applicable accounting requirements of
the Act, or the Exchange Act as it applies to Form 10-Q, and the related
published rules and regulations;
(B) any unaudited income statement and balance sheet data included or
incorporated by reference in the Registration Statement do not agree with the
corresponding amounts set forth in the unaudited consolidated financial
statements for those same periods; or that such unaudited data were not
determined on a basis substantially consistent with that of the corresponding
amounts in the audited consolidated financial statements included or
incorporated by reference in the Registration Statement;
(C) any unaudited pro forma consolidated financial information
included in the Registration Statement do not comply as to form in all
material respects with the applicable accounting requirements of the Act and
the Rules and Regulations thereunder; or that the pro forma adjustments have
not been properly applied to the historical amounts in the compilation of that
information;
(D) as of the date of the latest available unaudited interim
financial statements of the Company, and as of a specified date not more than
three days prior to the date of such letter, there has been any change in the
capital stock, increase in debt or amounts due to or from related parties, or
any decrease in real estate inventories or shareholders' equity, or any
changes, increases or decreases in any other items specified by the
Representatives, in each case as compared with amounts shown in the latest
unaudited consolidated balance sheet included or incorporated by reference in
the Registration Statement, except in all instances for changes, increases or
decreases that the Registration Statement discloses have occurred or may occur
or that are described in such letter; and
(E) for the period from the date of the latest unaudited consolidated
financial statements included or incorporated by reference in the Registration
Statement to the date of the latest available unaudited interim financial
statements of the Company, and to the specified date referred to in clause
(D), there were any decreases in consolidated sales of residential real
estate, gross profit or the total amount of net income, or any changes,
increases or decreases in any other items specified by the Representatives, in
each case as compared to the applicable corresponding period of the preceding
year, except in all instances for changes, increases or decreases that the
Registration Statement discloses have occurred or may occur or that are
described in such letter; and
(iv) In addition to the audit referred to in their report(s) included
or incorporated by reference in the Registration Statement and limited
procedures, inspection of minute books, inquiries and other procedures
referred to in paragraphs (ii) and (iii) above, they have carried out certain
specified procedures, not constituting an examination in accordance with
generally accepted auditing standards, with respect to certain amounts,
percentages and financial information identified by the Representatives on an
attached copy of the Registration Statement and reports filed by the Company
under the Exchange Act incorporated by reference therein, which are derived
from the general accounting records of the Company (or derived from such
records by analysis or computation), and have compared such amounts,
percentages and financial information with the accounting records or analyses
of the Company and have found them to be in agreement.
SCHEDULE A
NUMBER OF
NAME OF UNDERWRITER FIRM SHARES
XxXxxxxx & Company Securities, Inc
Xxxxxx, Read & Co. Inc
Xxxxxxx Xxxxx & Associates, Inc
Total 2,250,000
SCHEDULE B
NUMBER OF FIRM
NAME OF SELLING SHAREHOLDER SHARES TO BE SOLD
Xxxx X. Xxxxxxxxx 375,000
Xxxxxxx X. Xxxxxxx Living Trust 375,000
Total 750,000
NUMBER OF OPTION
NAME SHARES TO BE SOLD
Crossmann Communities, Inc 112,500
Xxxx X. Xxxxxxxxx 112,500
Xxxxxxx X. Xxxxxxx Living Trust 112,500
Total 337,500
SCHEDULE C
Crossmann Management, Inc.
Crossmann Investments, Inc.
Deluxe Homes, Inc.
Deluxe Homes of Lafayette, Inc.
Trimark Homes, Inc.
Trimark Development, Inc.
Crossmann Mortgage Corp.
Merit Realty, Inc.
Deluxe Aviation, Inc.
Crossmann Communities of Ohio, Inc.
Cutter Homes, Ltd.
Crossmann Communities Partnership
Crossmann Properties, LLC
R&D Land Development
3G Partnership
Xxxx/Xxxxxxx Partnership
Triton Development LLC
Five Points Road Development LLC
Saddlebrook Development LLC
Bridgeport Commons LLC
First Crossmann LLC
