Exhibit 99.3
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STANDBY PURCHASE AGREEMENT
This is a STANDBY PURCHASE AGREEMENT (the "Agreement"), dated as of the
date on the signature page between Union Acceptance Corporation, an Indiana
corporation (the "Company"), and the purchaser named on the signature page (the
"Purchaser").
A total of 16,000,000 shares (the "Shares") of Class A common stock,
without par value, of the Company (the "Class A common stock"), subject to the
right of the Company to increase the size of the offering to 17,600,000 Shares
as described in the Registration Statement (as defined below), are being offered
pursuant to an offering to the Company's existing shareholders (the "Rights
Offering") and to certain potential standby purchasers (the "Standby Offering").
The Rights Offering and the Standby Offering will constitute one offering (the
"Offering"). The Shares being offered in the Rights Offering are being offered
to holders of record ("Record Date Holders") of the Class A common stock and
Class B common stock, without par value, of the Company (the "Class B common
stock") as of the close of business on May 10, 2001 (the "Record Date") in
proportion to their respective ownership of Class A common stock or Class B
common stock then outstanding. On or prior to the date hereof, a registration
statement with respect to the shares of Class A common stock to be issued in the
Rights Offering and the Standby Offering has been declared effective by the
Securities and Exchange Commission (the "Commission"). The Purchaser desires to
agree to serve as a standby purchaser for a specified number of the Shares in
the Standby Offering, to the extent available after the exercise of rights in
the Rights Offering, and agrees to purchase a minimum number of the Shares, as
set forth in this Agreement. To that end, the parties have entered into this
Agreement.
1. RIGHTS OFFERING; REGISTRATION OF THE CLASS A COMMON STOCK
A registration statement and any supplements or amendments thereto on Form
S-2 (the "Registration Statement") with respect to the Offering have been filed
with, and declared effective by, the Commission. A copy of the Preliminary
Prospectus, and the Prospectus and the Standby Purchaser Supplement included in
the Registration Statement at the time the Registration Statement became
effective, have been furnished to the Purchaser.
2. PURCHASE AND DELIVERY OF SHARES
A. The Purchaser and the Company hereby acknowledge and agree that the
Company has entered into, or contemplates entering into, one or more
additional standby purchase agreements ("Standby Purchase Agreements")
with certain other parties (collectively with the Purchaser, the
"Standby Purchasers") on terms substantially similar to this
Agreement, except that they may provide for the purchase of a
different Maximum Standby Purchase Commitment and a different Minimum
Standby Purchase Right (both as defined below), among other
differences.
B. Subject to the terms, conditions and limitations of this Agreement and
to the availability of Shares after exercise of rights in the Rights
Offering, the Purchaser agrees to purchase from the Company, at the
subscription price per share of $5.00 (the "Subscription Price"), up
to the number of Shares stated on the signature page of this
Agreement, to the extent necessary to provide for full subscription
for all Shares offered by the Company in the Standby Offering (the
"Maximum Standby Purchase Commitment").
C. Subject to the terms and conditions at the Closing (as defined below),
the Company agrees to issue and sell to the Purchaser, and the
Purchaser agrees to purchase from the Company, at the Subscription
Price, a number of Shares equal to 4 million shares of Class A common
stock times the percentage that Purchaser's Maximum Standby Purchase
Commitment represents in comparison to the sum of the Maximum Standby
Purchase Commitments of all Standby Purchasers (the "Minimum Standby
Purchase Right").
D. In the event that the number of Shares remaining and not subscribed
for after the exercise of rights in the Rights Offering and allocation
of Shares necessary to satisfy the Minimum Standby Purchase Rights of
all Standby Purchasers is less than the aggregate Maximum Standby
Purchase Commitments of Standby Purchasers, such remaining Shares will
be allocated pro rata among Standby Purchasers according to their
respective Maximum Standby Purchase Commitments. Subject to the terms
and conditions of this Agreement, the Purchaser agrees to purchase
such number of Shares as are allocated to the Purchaser pursuant to
this Agreement.
E. The rights and obligations of the Purchaser and the Company under the
Agreement are subject to any conditions or minimums described in the
Registration Statement.
3. THE CLOSING
As soon as practicable following its determination of the number of Shares
subscribed for pursuant to the Rights Offering, the Company shall notify the
Purchaser of the number of Shares to be purchased by the Purchaser pursuant to
this Agreement. The Shares shall be delivered, and payment for the Shares
tendered, in the manner contemplated by Section 4, simultaneously with the
closing of the sale of Shares pursuant to the Rights Offering. The place, date
and time for delivery of payment and Shares shall be determined by the Company
and consummated as soon as practicable following the date upon which the Rights
Offering expires (the "Closing Time", the date of the Closing Time being
referred to as the "Closing Date" and the consummation of the transactions being
referred to as the "Closing"). The Closing Date is expected to be June 15, 2001.
4. DELIVERY OF SHARES
At the Closing, the Shares to be purchased by the Purchaser, registered in
the name of the Purchaser or its designee or nominee, as the Purchaser may
specify to the Company in writing at least four (4) business days prior to the
Closing Date, shall be delivered to the Purchaser, for the Purchaser's account
within three (3) business days of Closing. At the Closing, the Purchaser shall
deliver to the Company the Subscription Price for each share purchased pursuant
hereto by wire transfer of immediately available funds to an account designated
by the Company to the Purchaser in writing prior to the Closing Date.
5. AGREEMENTS AND CONSENTS OF PURCHASER
The Purchaser agrees with the Company that:
A. Notwithstanding anything to the contrary contained or implied herein,
without the consent of the Company, the Company shall not be obligated
to issue to the Purchaser any Shares in an amount which, when
aggregated with other shares of Class A common stock beneficially
owned by the Purchaser, would exceed 10% of the total issued and
outstanding shares of common stock (Class A and Class B) upon
completion of the Offering.
B. The Company may, in its sole discretion, decline to issue any of the
Shares to the Purchaser if, in the reasonable opinion of the Company,
the Purchaser is required to obtain prior clearance or approval of
such transaction from any government bank regulatory authority and
satisfactory evidence such approval or clearance has not been
presented to the Company by the Closing Date.
C. The Company may rely upon and disclose the terms of this Agreement.
Purchaser consents to disclosures concerning Purchaser in the
Prospectus and the Registration Statement, or in any amendment or
supplement thereto, and in any related filing or disclosures of the
Company.
6. REPRESENTATION AND WARRANTIES
A. The Company represents and warrants to the Purchaser that:
(i) The Company has filed the Registration Statement with the
Commission with respect to the Shares and the Registration
Statement has been declared effective by the Commission.
(ii) The Company has been duly incorporated and is a validly existing
corporation under the laws of the state of Indiana, with the
corporate power and authority to perform its obligations under
this Agreement.
(iii)The execution, delivery and performance of this Agreement by the
Company and the consummation by the Company of the transactions
contemplated by this Agreement have been duly authorized by all
necessary corporate action of the Company. This Agreement, when
duly executed and delivered by the Purchaser, will constitute a
valid and legally 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.
(iv) The Shares, when issued and delivered by the Company after
payment therefor as contemplated hereby, will be validly issued,
fully paid and nonassessable.
(v) The execution and delivery of this Agreement, the consummation by
the Company of the transactions contemplated hereby and the
compliance by the Company with the terms of this Agreement do not
violate the Articles of Incorporation or Bylaws of the Company,
or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any indenture,
mortgage, deed of trust, loan agreement or other agreement or
instrument to which the Company is a party or by which the
Company is bound, except as would not have a material adverse
effect on the financial condition of the Company, or any
applicable statute or any order, judgment, decree, rule or
regulation of any court or governmental agency or body having
jurisdiction over the Company or any of its properties or assets.
No consent, approval, authorization, order, registration or
qualification of or with any such court or governmental agency or
body is required for the valid authorization, execution, delivery
and performance by the Company of this Agreement, the issuance of
the Shares, or the consummation by the Company of the other
transactions contemplated by this Agreement, except such as may
be required and have been obtained from the National Association
of Securities Dealers, Inc. ("NASD") and under the Securities Act
of 1933, as amended. Such consents, approvals, authorizations,
registrations or qualifications as have been obtained under
federal and state securities or "blue sky" laws; subject, for the
purposes of this Section 6A(v), to the satisfaction or
fulfillment by the Company of any conditions precedent to the
validity, grant or effectiveness of any such consents, approvals,
authorizations, orders, registrations or qualifications.
(vi) The Registration Statement contains all material statements which
are required to be stated therein and does not include any untrue
statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were
made, not misleading.
(vii)The Company has received binding commitments from its principal
shareholders, directors, and management to subscribe for at least
6,400,000 Shares in the aggregate as part of the Rights Offering,
subject only to the Company's issuance of the rights.
B. The Purchaser represents and warrants to the Company that:
(i) As of the date of this Agreement, the Purchaser beneficially owns
the number of shares of Class A common stock set forth on the
signature page and does not have any short positions in the Class
A common stock.
(ii) If an entity, the Purchaser is the type of entity described on
the signature page, was duly formed and is validly existing and
in good standing under the laws of its state of formation, with
the power and authority to perform its obligations under this
Agreement.
(iii)The execution, delivery and performance of this Agreement by the
Purchaser and the consummation by the Purchaser of the
transactions contemplated hereby have been duly authorized by all
necessary action of the Purchaser. This Agreement, when duly
executed and delivered by the Company, will constitute a valid
and legally binding instrument, enforceable in accordance with
its terms, subject to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws of general
applicability now or hereinafter in effect relating to or
affecting creditors' rights and to general equity principles.
(iv) The Purchaser is not insolvent and has sufficient cash funds on
hand to purchase the Shares on the terms and conditions contained
in this Agreement and will have such funds on the Closing Date.
The Purchaser has, simultaneous with or prior to the execution
and delivery of this Agreement, provided the Company with
evidence or substantiated that such Purchaser has the financial
means to satisfy its financial obligations under this Agreement.
The foregoing evidence and substantiation is a true and accurate
representation of such means.
(v) The execution and delivery of this Agreement, the consummation by
the Purchaser of the transactions contemplated hereby and the
compliance by the Purchaser, with the terms of hereof, do not
violate the constituent documents of the Purchaser or result in a
breach or violation of any of the terms or provisions of, or
constitute a default under, any indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument to which
the Purchaser is a party or by which the Purchaser is bound,
except as would not have a material adverse affect on the
financial condition of Purchaser or its right or ability to
perform this Agreement, or any applicable law or any order,
judgment, decree, rule or regulation of any court or governmental
agency or body, having jurisdiction over the Purchaser or any of
its properties or assets. No consent, approval, authorization,
order, registration or qualification of or with any court or
governmental agency or body, is required for the valid
authorization, execution, and delivery by the Purchaser of this
Agreement or the consummation by the Purchaser of the
transactions contemplated by this Agreement.
(vi) The Purchaser has not entered into any contracts, arrangements,
understandings or relationships (legal or otherwise) with any
other person or persons with respect to the securities of the
Company, including, but not limited to transfer or voting any of
the securities, finder's fees, joint ventures, loan or option
arrangements, puts or calls, guarantees of profits, division of
profits or loss, or the giving or withholding of proxies.
7. CLOSING CONDITIONS
The respective obligations of the Purchaser and the Company to consummate
the purchase and sale of the Shares shall be subject, in the discretion of the
Company or the Purchaser, as the case may be, to the condition that (i) all
representations and warranties and other statements of the other party are, at
and as of the Closing Time, true and correct in all material respects, (ii) the
other party shall have performed all of its obligations hereunder theretofore to
be performed in all material respects, and (iii) no stop order suspending the
effectiveness of the Registration Statement or any amendment or supplement
thereto shall have been issued and no proceeding for that purpose shall have
been initiated or threatened by the Commission.
8. TERMINATION
A. This Agreement shall terminate upon mutual consent of the parties
hereto. In addition, the Company may terminate this Agreement if it is
not in material breach of its obligations under this Agreement and
there has been a material breach of any representation, warranty,
covenant or agreement contained in this Agreement on the part of the
Purchaser. Purchaser may terminate this Agreement if it is not in
material breach of its obligations under this Agreement and there has
been a material breach of any representation, warranty, covenant or
agreement contained in this Agreement on the part of the Company.
Either of the parties may terminate this Agreement (i) if the
transactions contemplated hereby are not consummated by August 31,
2001, unless such nonconsummation is a result of a breach of this
Agreement by the party seeking to terminate; or (ii) in the event the
Company is unable to obtain required federal or state approvals for
the transactions contemplated hereby on conditions reasonably
satisfactory to it despite its reasonable efforts to obtain such
approvals.
B. The Company and the Purchaser hereby agree that any termination of
this Agreement pursuant to Section 8A (other than, in either case,
termination in the event of a breach of this Agreement by the
Purchaser or Company or misrepresentation of any of the statements
made herein by the Purchaser or the Company) shall be without
liability to the Company or the Purchaser.
9. FUTURE ACQUISITION AND DISPOSITION OF SHARES; THREE MONTH HOLDING
PERIOD
The Purchaser agrees with the Company that during the period beginning on
the date of this Agreement and continuing until the Closing Date, it will not
offer, sell, contract to sell or otherwise dispose of, or bid for, purchase,
contract to purchase or otherwise acquire, any shares of common stock of the
Company, except pursuant to any rights it is granted as a shareholder in the
Rights Offering, without the prior written consent of the Company. Further, the
Purchaser hereby agrees not to sell or transfer any Shares purchased by the
Purchaser pursuant to this Agreement for a period of three months following the
date upon which the Purchaser acquired such Shares. The Company and the
Purchaser hereby acknowledge and agree that the stock certificates representing
the Shares purchased by the Purchaser pursuant to this Agreement shall bear a
legend which provides that such Shares are subject to the restriction on
transfer described in the previous sentence. The three month restriction shall
not apply to the Purchaser if the Purchaser is registered under the Investment
Company Act of 1940, as amended.
10. BINDING ON BENEFICIAL OWNERS.
If the Purchaser is acquiring the Shares for the account(s) of beneficial
owners, the Purchaser hereby represents and warrants that the Purchaser has been
given proper discretionary authority as an agent over such account(s) and that
the Purchaser is properly registered as an investment advisor or otherwise.
Further, the holding period described in Section 9 above and any agreements,
representations and warranties of the Purchaser in this Agreement, shall be
binding upon such beneficial owners.
11. NOTICES
All communications hereunder will be in writing and, if to the Company,
will be mailed, delivered or telecopied and confirmed to it, at the offices of
the Company at 000 Xxxxx Xxxxxxxxx Xxxxxx, Xxxxxxxxxxxx, Xxxxxxx 00000,
Attention: Xxxx X. Xxxxx, Chief Financial Officer, Facsimile: (000) 000-0000,
with a copy to Castle Creek Financial LLC at 6051 El Tordo, P. O. Xxx 0000,
Xxxxxx Xxxxx Xx, Xxxxxxxxxx 00000, Attention: Xxxx X. Xxx, Facsimile: (858)
756-8301; and if to the Purchaser, will be mailed, delivered or telecopied and
confirmed to it at the address on the signature page.
12. BINDING EFFECT
This Agreement shall be binding upon, and shall inure solely to the benefit
of, each of the parties hereto, and each of their respective heirs, executors,
administrators, successors and permitted assigns, and no other person shall
acquire or have any right under or by virtue of this Agreement. No party may
assign any of its rights or obligations hereunder to any other person or entity
without the prior written consent of the other party.
13. GOVERNING LAW
This Agreement shall be governed by, and construed in accordance with, the
laws of the State of Indiana (excluding principles of conflicts of laws) in
effect at the time of the execution hereof.
14. EXECUTION IN COUNTERPARTS
This Agreement may be executed in any number of counterparts, each of which
counterparts when so executed shall be deemed to be an original, but all such
respective counterparts shall together constitute but one and the same
instrument.
15. ENTIRE AGREEMENT
This Agreement represents the entire understanding of the parties with
respect to the matters addressed in this Agreement and supersedes all prior
written and oral understanding concerning the subject matter of this Agreement.
[signature page follows]
SIGNATURE PAGE
The Purchaser and the Company have executed this Agreement as of the
day and year first above written.
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PURCHASER INFORMATION
(must be completed)
1. Name of Purchaser
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2. Purchaser's Address:
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Facsimile number
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3. Number of shares of Class A common stock
beneficially owned by Purchaser as of the date of
this Agreement (See section 6B(i)) Shares
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4. Maximum Standby Purchase Commitment
(See section 2B) Shares
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5. If purchaser is an entity, specify type of entity and state of
formation
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[entity type]
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[state of formation]
6. Excess Allocation. The Company may increase the size of the Offering as
described in the Prospectus. As a result, additional Shares may be
available for purchase by the standby purchasers. Therefore,
notwithstanding the allocation of Shares provided for in the Offering
and this Agreement, the Purchaser desires to purchase if available
(please check the appropriate box):
[ ] no Shares in excess of its Maximum Standby Purchase
Commitment.
[ ] up to an aggregate of ____________ Shares in the Offering (the
"Maximum Purchase Amount") which includes the Purchaser's
Maximum Standby Purchase Commitment. To the extent that (i)
the Shares otherwise allocated to the Purchaser in the
Offering are less than the Excess Maximum Purchase Amount, the
Company elects to sell more than 16,000,000 (up to 17,600,000)
Shares in the Offering, and the Oversubscription Rights
exercised by shareholders have been satisfied, the Purchaser
agrees to purchase from the Company, at the Company's
election, a number of Shares equal to the difference between
the number of Shares otherwise allocated to the Purchaser and
the Purchaser's Excess Maximum Purchase Amount (subject to
proration according to the number of excess Shares made
available to Standby Purchasers based upon the number of
excess Shares sought by the Purchaser relative to the total
number of excess Shares sought by all Standby Purchasers).
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"Purchaser" "Company"
[ ] UNION ACCEPTANCE CORPORATION
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By: By:
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Name: Name: Xxxx X. Xxxxx
Title: Title: Chief Financial Officer
Date: , 2001 Date: May __, 2001
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