SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): July 17, 1996
HORIZON GROUP, INC.
(formerly HGI Realty, Inc.)
(Exact Name of Registrant as Specified in Charter)
MICHIGAN 1-12424 38-2559212
(State or other (Commission File Number) (IRS Employer Identification No.)
Jurisdiction of
Incorporation)
5000 HAKES DRIVE, NORTON SHORES, MICHIGAN 49441
(Address of Principal Executive Office) (Zip Code)
Registrant's telephone number, including area code: (616) 798-9100
NOT APPLICABLE
(Former Name or Former Address, if Changed Since Last Report)
<PAGE>
ITEM 5. OTHER EVENTS
On July 17, 1996, Horizon Group, Inc. ("Horizon"),
a Michigan corporation, entered into an
underwriting agreement with Smith Barney Inc.
("Smith Barney") pursuant to which Smith Barney has
agreed to purchase from Horizon 1,500,000 shares of
Common Stock, par value $0.01 per share, of Horizon
("Common Stock") for an aggregate price of
$28,500,000. Horizon has also granted to Smith
Barney an option to purcahse up to 225,000
additional shares of Common Stock at a purchase
price of $19.00 per share solely to cover
overallotments, if any.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA Financial Information and Exhibits.
(A) FINANCIAL STATEMENTS OF BUSINESS ACQUIRED
Not applicable.
(B) PRO FORMA FINANCIAL INFORMATION
Not applicable.
(C) EXHIBITS
1.1 Underwriting Agreement dated as of July 17,
1996, by and between Horizon Group, Inc.
and Smith Barney Inc.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
HORIZON GROUP, INC.
(Registrant)
By: /s/ JEFFREY A. KERR
Jeffrey A. Kerr
President and CEO
Dated: July 22, 1996
<PAGE>
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
1.1 Underwriting Agreement dated as of July 17, 1996, by and
between Horizon Group, Inc. and Smith Barney Inc.
<PAGE>
EXHIBIT 1.1
HORIZON GROUP, INC.
Preferred Stock, Common Stock and Warrants
UNDERWRITING AGREEMENT
July 17, 1996
SMITH BARNEY INC.
388 Greenwich Street
New York, New York 10013
Dear Sirs:
Horizon Group, Inc., a Michigan corporation (the "Company")
qualified for federal income tax purposes as a real estate
investment trust pursuant to Sections 856 through 860 of the
Internal Revenue Code of 1986, as amended (the "Code"), proposes
to issue and sell certain securities of the Company identified in
Schedule I hereto (the "Firm Securities") to you and such other
underwriters, if any, named in Schedule II hereto (the
"Underwriters"). The Company also proposes to sell to the
Underwriters, upon the terms and conditions set forth in Section
2 hereof, certain additional securities identified in Schedule I
hereto (the "Additional Securities") to cover over-allotments, if
any. The Firm Securities and the Additional Securities are
hereinafter collectively referred to as the "Securities."
1. REGISTRATION STATEMENT AND PROSPECTUS. The Company has
prepared and filed with the Securities and Exchange Commission
(the "Commission") in accordance with the provisions of the
Securities Act of 1933, as amended, and the rules and regulations
of the Commission thereunder (collectively, the "Act"), a
registration statement (the file number of which is set forth in
Schedule I hereto) on Form S-3 under the Act (the "registration
statement"), including a prospectus subject to completion
relating to the Securities. Such registration statement, as so
amended, has been declared by the Commission to be effective
under the Act. Such registration statement, as amended at the
date of this Agreement as specified in Schedule 1 hereto, meets
the requirements set forth in Rule 415(a)(1)(x) under the Act and
complies in all other material respects with said Rule. The
Company will next file with the Commission pursuant to Rule
424(b) under the Act a final prospectus supplement to the basic
prospectus included in such registration statement, as so
amended, describing the Securities and the offering thereof, in
such form as has been provided to, or discussed with, and
approved by the Underwriters. The term "Registration Statement"
as used in this Agreement means the registration statement, as
amended at the time it becomes effective including (i) all
financial schedules and exhibits thereto and (ii) all documents
incorporated by reference or deemed to be incorporated by
reference therein. If the Company files a registration statement
to register a portion of the Securities and relies on Rule 462(b)
under the Act for such registration statement to become effective
upon filing with the Commission (the "Rule 462 Registration
Statement"), the term "Registration Statement" as used in this
Agreement means the registration statement referred to above and
the Rule 462 Registration Statement, each as may be amended
pursuant to the Act. If it is contemplated, at the time this
Agreement is executed, that a post-effective amendment to the
registration statement will be filed and must be declared
effective before the offering of the Securities may commence, the
term "Registration Statement" as used in this Agreement means the
registration statement as amended by said post-effective
amendment. The term "Basic Prospectus" as used in this Agreement
means the prospectus included in the Registration Statement. The
term "Prepricing Prospectus" as used in this Agreement means any
preliminary form of the Prospectus (as defined herein)
specifically relating to the Securities, in the form first filed
with, or transmitted for filing to, the Commission pursuant to
Rule 424 of the Rules and Regulations. The term "Prospectus
Supplement" as used in this Agreement means any prospectus
supplement specifically relating to the Securities, in the form
first filed with, or transmitted for filing to, the Commission
pursuant to Rule 424 under the Act (including the information, if
any, deemed to be part thereof pursuant to Rule 430A(b) or Rule
434 under the Act). The term "Prospectus" as used in this
Agreement means the Basic Prospectus together with the Prospectus
Supplement except that if such Basic Prospectus is amended or
supplemented on or prior to the date on which the Prospectus
Supplement was first filed pursuant to Rule 424, the term
"Prospectus" shall refer to the Basic Prospectus as so amended or
supplemented and as supplemented by the Prospectus Supplement.
If the Company elects to rely on Rule 434 under the Act, all
references to the Prospectus shall be deemed to include, without
limitation, the form of the Prospectus and the term sheet taken
together, provided to the Underwriters by the Company in reliance
on Rule 434 under the Act. Any reference in this Agreement to
the registration statement, the Registration Statement, the Basic
Prospectus, any Prepricing Prospectus, any Prospectus Supplement
or the Prospectus shall be deemed to refer to and include the
documents incorporated by reference therein pursuant to Item 12
of Form S-3 under the Act, as of the date of the registration
statement, the Registration Statement, the Basic Prospectus, such
Prepricing Prospectus, such Prospectus Supplement or the
Prospectus, as the case may be, and any reference to any
amendment or supplement to the registration statement, the
Registration Statement, the Basic Prospectus, any Prepricing
Prospectus, any Prospectus Supplement or the Prospectus shall be
deemed to refer to and include any documents filed after such
date under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), which, upon filing, are incorporated by
reference therein, as required by paragraph (b) of Item 12 of
Form S-3. As used herein, the term "Incorporated Documents"
means the documents which at the time are incorporated by
reference in the registration statement, the Registration
Statement, the Basic Prospectus, any Prepricing Prospectus, any
Prospectus Supplement, the Prospectus, or any amendment or
supplement thereto.
2. AGREEMENTS TO SELL AND PURCHASE. Subject to such
adjustments as you may determine in order to avoid fractional
shares, the Company hereby agrees, subject to all the terms and
conditions set forth herein, to issue and sell to each
Underwriter and, upon the basis of the representations,
warranties and agreements of the Company herein contained and
subject to all the terms and conditions set forth herein, each
Underwriter agrees, severally and not jointly, to purchase from
the Company, at a purchase price as set forth in Schedule I
hereto (the "purchase price"), the number of Firm Securities set
forth opposite the name of such Underwriter in Schedule II hereto
(or such number of Firm Securities increased as set forth in
Section 10 hereof).
The Company also agrees, subject to all the terms and
conditions set forth herein, to sell to the Underwriters, and,
upon the basis of the representations, warranties and agreements
of the Company herein contained and subject to all the terms and
conditions set forth herein, the Underwriters shall have the
right to purchase from the Company, at the purchase price,
pursuant to an option (the "over-allotment option") which may be
exercised at any time prior to 9:00 P.M., New York City time, on
the 30th day after the date of the Prospectus (or, if such 30th
day shall be a Saturday or Sunday or a holiday, on the next
business day thereafter when the New York Stock Exchange is open
for trading), certain Additional Securities from the Company as
set forth in Schedule I hereto. Additional Securities may be
purchased only for the purpose of covering over-allotments made
in connection with the offering of the Firm Securities. Upon any
exercise of the over-allotment option, each Underwriter,
severally and not jointly, agrees to purchase from the Company
the number of Additional Securities (subject to such adjustments
as you may determine in order to avoid fractional shares) which
bears the same proportion to the number of Additional Securities
to be sold by the Company as the number of Firm Securities set
forth opposite the name of such Underwriter in Schedule II hereto
(or such number of Firm Securities increased as set forth in
Section 10 hereof) bears to the aggregate number of Firm
Securities.
3. TERMS OF PUBLIC OFFERING. The Company has been advised
by you that the Underwriters propose to offer the Securities,
from time to time as set forth in Schedule I hereto.
4. DELIVERY OF THE SECURITIES AND PAYMENT THEREFOR.
Delivery to the Underwriters of and payment for the Firm
Securities shall be made at the office of Smith Barney Inc., 388
Greenwich Street, New York, NY 10013, at 10:00 A.M., New York
City time, on the date set forth in Schedule I hereto (the
"Closing Date"). The place of closing for the Firm Securities
and the Closing Date may be varied by agreement between you and
the Company.
Delivery to the Underwriters of and payment for any
Additional Securities to be purchased by the Underwriters shall
be made at the aforementioned office of Smith Barney Inc. at such
time on such date (the "Option Closing Date"), which may be the
same as the Closing Date but shall in no event be earlier than
the Closing Date nor earlier than two nor later than three
business days after the giving of the notice hereinafter referred
to, as shall be specified in a written notice from you on behalf
of the Underwriters to the Company of the Underwriters'
determination to purchase a number, specified in such notice, of
Additional Securities. The place of closing for any Additional
Securities and the Option Closing Date for such Securities may be
varied by agreement between you and the Company.
Certificates for the Firm Securities and for any Additional
Securities to be purchased hereunder shall be registered in such
names and in such denominations as you shall request prior to
9:30 A.M., New York City time, on the second business day
preceding the Closing Date or any Option Closing Date, as the
case may be. Such certificates shall be made available to you in
New York City for inspection and packaging not later than 9:30
A.M., New York City time, on the business day next preceding the
Closing Date or the Option Closing Date, as the case may be. The
certificates evidencing the Firm Securities and any Additional
Securities to be purchased hereunder shall be delivered to you on
the Closing Date or the Option Closing Date, as the case may be,
against payment of the purchase price therefor by wire transfer
of same day funds payable to the order of the Company, unless
otherwise set forth in Schedule I hereto.
5. AGREEMENTS OF THE COMPANY. The Company agrees with the
several Underwriters as follows:
(a) If, at the time this Agreement is executed and
delivered, it is necessary for the Registration Statement or a
post-effective amendment thereto to be declared effective before
the offering of the Securities may commence, the Company will
endeavor to cause the Registration Statement or such
post-effective amendment to become effective as soon as possible
and will advise you promptly and, if requested by you, will
confirm such advice in writing, when the Registration Statement
or such post-effective amendment has become effective.
(b) The Company will advise you promptly and, if
requested by you, will confirm such advice in writing: (i) of any
request by the Commission for amendment of or a supplement to the
Registration Statement, any Prepricing Prospectus, any Prospectus
Supplement or the Prospectus or for additional information; (ii)
of the issuance by the Commission of any stop order suspending
the effectiveness of the Registration Statement or of the
suspension of qualification of the Securities for offering or
sale in any jurisdiction or the initiation of any proceeding for
such purpose; and (iii) within the period of time referred to in
paragraph (f) below, of any change in the Company's condition
(financial or other), business, properties, net worth or results
of operations, or of the happening of any event, which makes any
statement of a material fact made in the Registration Statement
or the Prospectus (as then amended or supplemented) untrue or
which requires the making of any additions to or changes in the
Registration Statement or the Prospectus (as then amended or
supplemented) in order to state a material fact required by the
Act or the regulations thereunder to be stated therein or
necessary in order to make the statements therein not misleading,
or of the necessity to amend or supplement the Prospectus (as
then amended or supplemented) to comply with the Act or any other
law. If at any time the Commission shall issue any stop order
suspending the effectiveness of the Registration Statement, the
Company will use its best efforts to obtain the withdrawal of
such order at the earliest possible time.
(c) The Company will furnish to you, without charge (i)
one signed copy of the registration statement as originally filed
with the Commission and of each amendment thereto, including
financial statements and all exhibits to the registration
statement, (ii) such number of conformed copies of the
registration statement as originally filed and of each amendment
thereto, but without exhibits, as you may request, (iii) such
number of copies of the Incorporated Documents, without exhibits,
as you may request, and (iv) two copies of the exhibits to the
Incorporated Documents.
(d) The Company will not file any amendment to the
Registration Statement or make any amendment or supplement to the
Prospectus or, prior to the end of the period of time referred to
in the first sentence in subsection (f) below, file any document
which, upon filing becomes an Incorporated Document, of which you
shall not previously have been advised or to which, after you
shall have received a copy of the document proposed to be filed,
you shall reasonably object within 24 hours of receipt.
(e) Prior to the execution and delivery of this
Agreement, the Company has delivered to you, without charge, in
such quantities as you have requested, copies of each form of the
Prepricing Prospectus and of each form of the Prospectus
Supplement. The Company consents to the use, in accordance with
the provisions of the Act and with the securities or Blue Sky
laws of the jurisdictions in which the Securities are offered by
the several Underwriters and by dealers, prior to the date of the
Prospectus, of each Prepricing Prospectus and each Prospectus
Supplement so furnished by the Company.
(f) As soon after the execution and delivery of this
Agreement as possible and thereafter from time to time for such
period as in the opinion of counsel for the Underwriters a
prospectus is required by the Act to be delivered in connection
with sales by any Underwriter or dealer, the Company will
expeditiously deliver to each Underwriter and each dealer,
without charge, as many copies of the Prospectus (and of any
amendment or supplement thereto) as you may request. The Company
consents to the use of the Prospectus (and of any amendment or
supplement thereto) in accordance with the provisions of the Act
and with the securities or Blue Sky laws of the jurisdictions in
which the Securities are offered by the several Underwriters and
by all dealers to whom Securities may be sold, both in connection
with the offering and sale of the Securities and for such period
of time thereafter as the Prospectus is required by the Act to be
delivered in connection with sales by any Underwriter or dealer.
If during such period of time any event shall occur that in the
judgment of the Company or in the opinion of counsel for the
Underwriters is required to be set forth in the Prospectus (as
then amended or supplemented) or should be set forth therein in
order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or if
it is necessary to supplement or amend the Prospectus (or to file
under the Exchange Act any document which, upon filing, becomes
an Incorporated Document) in order to comply with the Act or any
other law, the Company will forthwith prepare and, subject to the
provisions of paragraph (d) above, file with the Commission an
appropriate supplement or amendment thereto, and will
expeditiously furnish to the Underwriters and dealers a
reasonable number of copies thereof. In the event that the
Company and you agree that the Prospectus should be amended or
supplemented, the Company, if requested by you, will promptly
issue a press release announcing or disclosing the matters to be
covered by the proposed amendment or supplement.
(g) The Company will cooperate with you and, if
applicable, with counsel for the Underwriters in connection with
the registration or qualification of the Securities for offering
and sale by the Underwriters and by dealers under the securities
or Blue Sky laws of such jurisdictions as you may designate and
will file such consents to service of process or other documents
necessary or appropriate in order to effect such registration or
qualification; provided that in no event shall the Company be
obligated to qualify to do business in any jurisdiction where it
is not now so qualified or to take any action which would subject
it to service of process in suits, other than those arising out
of the offering or sale of the Securities, in any jurisdiction
where it is not now so subject.
(h) The Company will make generally available to its
security holders a consolidated earning statement, which need not
be audited, covering a twelve-month period commencing after the
effective date of the Registration Statement and ending not later
than 15 months thereafter, as soon as practicable after the end
of such period, which consolidated earning statement shall
satisfy the provisions of Section 11(a) of the Act.
(i) During the period of three years hereafter, the
Company will furnish to you (i) as soon as available, a copy of
each report of the Company mailed to stockholders or filed with
the Commission, and (ii) from time to time such other information
concerning the Company as you may reasonably request.
(j) If this Agreement shall terminate or shall be
terminated after execution pursuant to any provisions hereof
(otherwise than pursuant to the second paragraph of Section 10
hereof or by notice given by you terminating this Agreement
pursuant to Section 10 or Section 11 hereof) or if this Agreement
shall be terminated by the Underwriters because of any failure or
refusal on the part of the Company to comply with the terms or
fulfill any of the conditions of this Agreement, the Company
agrees to reimburse the Underwriters for all out-of-pocket
expenses (including fees and expenses of counsel for the
Underwriters) incurred by you in connection herewith.
(k) The Company will apply the net proceeds from the
sale of the Securities to be sold by it hereunder substantially
in accordance with the description set forth in the Prospectus.
(l) If Rule 430A of the Act is employed, the Company
will timely file the Prospectus pursuant to Rule 424(b) under the
Act and will advise you of the time and manner of such filing.
(m) Except as provided in this Agreement, the Company
will not offer, sell, contract to sell or otherwise dispose of
any common stock or any securities convertible into or
exercisable or exchangeable for common stock, including the
limited partnership interests in Horizon/Glen Outlet Centers
Limited Partnership (the "Operating Partnership"), or grant
options or warrants to purchase common stock (except to employees
under the Company's stock option plans and for conversion of
limited partnership units into common stock in accordance with
the Agreement of Limited Partnership of the Operating
Partnership) for a period of 30 days after the date of the
Prospectus, without the prior written consent of Smith Barney
Inc. Notwithstanding the foregoing, this Section 5(m) shall not
limit the offer and sale of any such securities as part of the
purchase price in connection with any acquisition; provided the
recipients of any such securities are subject to the limitations
on disposition set forth in this Section 5(m).
(n) The Company has furnished or will furnish to you
"lock-up" letters, in form and substance satisfactory to you,
signed by each of its executive officers and directors and to
each of its stockholders designated by you in writing prior to
the execution of this Agreement.
(o) Except as stated in this Agreement and in the
Prepricing Prospectus, Prospectus Supplement and Prospectus, the
Company has not taken, nor will it take, directly or indirectly,
any action designed to or that 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
the Securities.
(p) If requested as set forth in Schedule I hereto, the
Company will use its best efforts to have the Securities which it
agrees to sell under this Agreement listed, subject to notice of
issuance, on the New York Stock Exchange on or before the Closing
Date.
(q) The Company will use its best efforts to continue to
qualify as a "real estate investment trust" under the Code.
6. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The
Company represents and warrants to each Underwriter that:
(a) Each Prepricing Prospectus included as part of the
registration statement as originally filed or as part of any
amendment or supplement thereto, or filed pursuant to Rule 424
under the Act, complied when so filed in all material respects
with the provisions of the Act. The Commission has not issued
any order preventing or suspending the use of any Prepricing
Prospectus.
(b) The Company and the transactions contemplated by
this Agreement meet the requirements for using Form S-3 under the
Act. The registration statement in the form in which it became
or becomes effective and also in such form as it may be when any
post-effective amendment thereto shall become effective and the
Prospectus and any supplement or amendment thereto, including the
Prospectus Supplement, when filed with the Commission under Rule
424(b) under the Act, complied or will comply in all material
respects with the provisions of the Act and will not at any such
times contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary
to make the statements therein not misleading, except that this
representation and warranty does not apply to statements in or
omissions from the registration statement or the Prospectus or
any supplement or amendment thereto made in reliance upon and in
conformity with information relating to any Underwriter furnished
to the Company in writing by or on behalf of any Underwriter
through you expressly for use therein.
(c) The Incorporated Documents heretofore filed, when
they were filed (or, if any amendment with respect to any such
document was filed, when such amendment was filed), conformed in
all material respects with the requirements of the Act, the
Exchange Act and the respective rules and regulations thereunder,
any further Incorporated Documents so filed will, when they are
filed, conform in all material respects with the requirements of
the Act, the Exchange Act and the respective rules and
regulations thereunder; no such document when it was filed (or,
if an amendment with respect to any such document was filed, when
such amendment was filed), contained an untrue statement of a
material fact or omitted to state a material fact required to be
stated therein or necessary in order to make the statements
therein not misleading; and no such further document, when it is
filed, will contain an untrue statement of a material fact or
will omit to state a material fact required to be stated therein
or necessary in order to make the statements therein not
misleading.
(d) All outstanding capital stock of the Company has
been duly authorized and validly issued, is fully paid and
nonassessable and is free of any preemptive or similar rights;
the Securities to be issued and sold by the Company have been
duly authorized and, when issued and delivered to the
Underwriters against payment therefor in accordance with the
terms hereof, will be validly issued, fully paid and
nonassessable and free of any preemptive or similar rights; and
the capital stock of the Company conforms to the description
thereof in the Registration Statement and the Prospectus.
(e) If the Securities are warrants to acquire capital
stock, the execution and delivery of the Securities have been
duly authorized by all necessary corporate action, and, at the
Closing Date or the related Option Closing Date (as the case may
be), the Securities will have been duly executed and delivered by
the Company, and if applicable, assuming due authorization,
execution and delivery of the Securities by parties other than
the Company, will be the legal, valid, binding and enforceable
obligations of the Company, subject to the effect of bankruptcy,
insolvency, moratorium, fraudulent conveyance, reorganization and
similar laws relating to creditors' rights generally and to the
application of equitable principles in any proceeding, whether at
law or in equity.
(f) The securities of the Company issuable in exchange
for or upon conversion of the Securities, if any, as specified in
Schedule 1 to this Agreement (the "Underlying Securities") have
been duly authorized and reserved, and, when such securities are
issued and delivered as contemplated by the terms of the
applicable Securities Document (as defined in paragraph 6(n)),
such securities will be validly issued, fully paid and
nonassessable.
(g) The Company is a corporation duly organized and
validly existing in good standing under the laws of the State of
Michigan with full corporate power and authority to own, lease
and operate its properties and to conduct its business as
described in the Registration Statement and the Prospectus, and
is duly registered and qualified to conduct its business and is
in good standing in each jurisdiction or place where the nature
of its properties or the conduct of its business requires such
registration or qualification, except where the failure so to
register or qualify does not have a material adverse effect on
the condition (financial or other), business, properties, net
worth or results of operations of the Company and its
subsidiaries taken as a whole (a "Material Adverse Effect").
(h) All the Company's subsidiaries required to be listed
in an exhibit to the Company's Annual Report on Form 10-K are
listed on Schedule III hereof (collectively, the "Material
Subsidiaries"). Each subsidiary is a general or limited
partnership or corporation duly organized, validly existing and
in good standing in the jurisdiction of its organization, with
full power and authority to own, lease and operate its properties
and to conduct its business as described in the Registration
Statement and the Prospectus, and is duly registered and
qualified to conduct its business and is in good standing in each
jurisdiction or place where the nature of its properties or the
conduct of its business requires such registration or
qualification, except where the failure so to register or qualify
does not have a Material Adverse Effect; all the outstanding
shares of capital stock of each of the subsidiaries that is a
corporation have been duly authorized and validly issued, are
fully paid and nonassessable, all of the partnership interests in
each Subsidiary that is a partnership are validly issued and
fully paid; and except as described in the Registration
Statement, the Prospectus (and any amendment or supplement
thereto) and Schedule III hereof, all of such shares and
interests in the subsidiaries owned by the Company are owned by
the Company directly, or indirectly through one of the other
subsidiaries, free and clear of any lien, adverse claim, security
interest, equity or other encumbrance.
(i) There are no legal or governmental proceedings
pending or, to the knowledge of the Company, threatened, against
the Company or any of the subsidiaries, or to which the Company
or any of the subsidiaries, or to which any of their respective
properties is subject, that are required to be described in the
Registration Statement or the Prospectus but are not described as
required, and there are no agreements, indentures, leases or
other instruments that are required to be described in the
Registration Statement or the Prospectus or to be filed as an
exhibit to the Registration Statement or any Incorporated
Document that are not described or filed as required by the Act
or the Exchange Act.
(j) Neither the Company nor any of the subsidiaries is
(i) in violation of its certificate or articles of incorporation,
by-laws, partnership agreements, or other organizational
documents, or (ii) in violation of any law, ordinance,
administrative or governmental rule or regulation applicable to
the Company or any of the subsidiaries or of any decree of any
court or governmental agency or body having jurisdiction over the
Company or any of the subsidiaries, or (iii) in default in the
performance of any obligation, agreement or condition contained
in any bond, debenture, note or any other evidence of
indebtedness or in any material agreement, indenture, lease or
other instrument to which the Company or any of the subsidiaries
is a party or by which any of them or any of their respective
properties may be bound, which violation or default, in the case
of clauses (ii) and (iii) would have a Material Adverse Effect.
(k) Neither the issuance and sale of the Securities, the
execution, delivery or performance of this Agreement by the
Company nor the consummation by the Company of the transactions
contemplated hereby (i) requires any consent, approval,
authorization or other order of or registration or filing with,
any court, regulatory body, administrative agency or other
governmental body, agency or official (except such as may be
required for the registration of the Securities under the Act and
the Exchange Act and compliance with the securities or Blue Sky
laws of various jurisdictions, all of which have been or will be
effected in accordance with this Agreement) or conflicts or will
conflict with or constitutes or will constitute a breach of, or a
default under, the certificate or articles of incorporation,
bylaws, partnership agreements, or other organizational
documents, of the Company or any of the subsidiaries or (ii)
conflicts or will conflict with or constitutes or will constitute
a breach of, or a default under, any agreement, indenture, lease
or other instrument to which the Company or any of the
subsidiaries is a party or by which any of them or any of their
respective properties may be bound, or violates or will violate
any statute, law, regulation or filing or judgment, injunction,
order or decree applicable to the Company or any of the
subsidiaries or any of their respective properties, or will
result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Company or any of
the subsidiaries pursuant to the terms of any agreement or
instrument to which any of them is a party or by which any of
them may be bound or to which any of the property or assets of
any of them is subject.
(l) The accountants, Ernst & Young LLP, who have
certified or shall certify the financial statements included or
incorporated by reference in the Registration Statement and the
Prospectus (or any amendment or supplement thereto) are
independent public accountants as required by the Act, the
Exchange Act and the respective rules and regulations thereunder.
(m) The financial statements, together with related
schedules and notes, included or incorporated by reference in the
Registration Statement and the Prospectus (and any amendment or
supplement thereto), present fairly the consolidated financial
position, results of operations and changes in financial position
of the Company and the subsidiaries on the basis stated in the
Registration Statement at the respective dates or for the
respective periods to which they apply; such statements and
related schedules and notes have been prepared in accordance with
generally accepted accounting principles consistently applied
throughout the periods involved, except as disclosed therein; and
the other financial and statistical information and data included
or incorporated by reference in the Registration Statement and
the Prospectus (and any amendment or supplement thereto) are
accurately presented and prepared on a basis consistent with such
financial statements and the books and records of the Company and
the subsidiaries. The pro forma financial statements included or
incorporated by reference in the Registration Statement and the
Prospectus (and any amendment or supplement thereto), if any, and
other pro forma financial information, if any, included in or
incorporated therein comply in all material respects with the
applicable accounting requirements of Rule 11-02 of Regulation S-
X of the Commission and the pro forma adjustments have been
properly applied to the historical amounts in the compilation of
that data and the assumptions used in the preparation thereof are
reasonable.
(n) The execution and delivery, and the performance by
the Company of its obligations under, this Agreement and any
other agreement pursuant to which the Securities are issued as
specified in Schedule I to this Agreement (the "Securities
Documents") have been duly authorized by all necessary corporate
action of the Company, and, at the Closing Date or the related
Option Closing Date (as the case may be), such agreements will
have been duly executed and delivered by the Company, and
assuming due authorization, execution and delivery of the
Securities Documents by parties other than the Company as
specified in the applicable Securities Documents, and, if
required, such Securities Documents have been filed with the
Secretary of State of the State of Michigan or any other
applicable jurisdiction, and such agreements will constitute
valid and binding instruments of the Company enforceable against
the Company in accordance with their respective terms, subject to
the effect of bankruptcy, insolvency, moratorium, fraudulent
conveyance, reorganization and similar laws relating to
creditors' rights generally and to the application of equitable
principles in any proceeding, whether at law or in equity and in
the case of this Agreement, except as rights to indemnity and
contribution hereunder may be limited by federal or state
securities laws.
(o) Except as disclosed in the Registration Statement
and the Prospectus (or any amendment or supplement thereto),
subsequent to the respective dates as of which such information
is given in the Registration Statement and the Prospectus (or any
amendment or supplement thereto), neither the Company nor any of
the subsidiaries has incurred any liability or obligation, direct
or contingent, or entered into any transaction, not in the
ordinary course of business, that is material to the Company and
the subsidiaries taken as a whole, and there has not been any
change in the capital stock, or material increase in the
short-term debt or long-term debt, of the Company or any of the
subsidiaries, or any material adverse change, or any development
involving or which may reasonably be expected to involve, a
prospective material adverse change, in the condition (financial
or other), business, net worth or results of operations of the
Company and the subsidiaries taken as a whole.
(p) The Company or the subsidiaries have good and
marketable title to all property (real and personal) listed in
the Prospectus or in the Incorporated Documents as being owned by
it, free and clear of all liens, claims, security interests or
other encumbrances except such as are described in the
Registration Statement and the Prospectus or in the Incorporated
Documents or in a document filed as an exhibit to the
Registration Statement and all the property described in the
Prospectus as being held under lease by each of the Company and
the subsidiaries is held by it under valid, subsisting and
enforceable leases.
(q) The Company has not distributed and, prior to the
later to occur of (i) the Closing Date and (ii) completion of the
distribution of the Securities, will not distribute any offering
material in connection with the offering and sale of the
Securities other than the Registration Statement, the Prepricing
Prospectus, the Prospectus Supplement, the Prospectus or other
materials, if any, permitted by the Act.
(r) The Company and each of the subsidiaries has such
permits, licenses, franchises and authorizations of governmental
or regulatory authorities ("permits") as are necessary to own its
respective properties and to conduct its business in the manner
described in the Prospectus, subject to such qualifications as
may be set forth in the Prospectus; the Company and each of the
subsidiaries has fulfilled and performed all its material
obligations with respect to such permits and no event has
occurred which allows, or after notice or lapse of time would
allow, revocation or termination thereof or results in any other
material impairment of the rights of the holder of any such
permit, subject in each case to such qualification as may be set
forth in the Prospectus; and, except as described in the
Prospectus, none of such permits contains any restriction that is
materially burdensome to the Company or any of the subsidiaries.
(s) The Company and the subsidiaries maintain a system
of internal accounting controls sufficient to provide reasonable
assurances that (i) transactions are executed in accordance with
management's general or specific authorization; (ii) transactions
are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting
principles and to maintain accountability for assets; (iii)
access to assets is permitted only in accordance with
management's general or specific authorization; and (iv) the
recorded accountability for assets is compared with existing
assets at reasonable intervals and appropriate action is taken
with respect to any differences.
(t) Neither the Company nor any of its subsidiaries nor
any employee or agent of the Company or any Subsidiary has made
any payment of funds of the Company or any Subsidiary or received
or retained any funds in violation of any law, rule or
regulation, which payment, receipt or retention of funds is of a
character required to be disclosed in the Prospectus.
(u) The Company and each of the subsidiaries have filed
all tax returns required to be filed, which returns are complete
and correct, and neither the Company nor any Subsidiary is in
default in the payment of any taxes which were payable pursuant
to said returns or any assessments with respect thereto.
(v) The Company is not now, and, after sale of the
Securities to be sold by the Company hereunder and application of
the net proceeds from such sale as described in the Prospectus
under the caption "Use of Proceeds," will not be, an "investment
company" within the meaning of the Investment Company Act of
1940, as amended.
(w) To the best of the Company's knowledge, except as
described in the Registration Statement and Prospectus, the
Company and the subsidiaries (i) are in compliance with any and
all applicable foreign, federal, state and local laws and
regulations relating to the protection of human health and
safety, the environment, hazardous or toxic substances or wastes,
pollutants or contaminants ("Environmental Laws"), (ii) have
received all permits, licenses or other approvals under
applicable Environmental Laws required in connection with their
businesses, properties or assets as conducted or contemplated to
be conducted as described in the Registration Statement, and
(iii) are in compliance with all terms and conditions of any such
permit, license or approval, except where such noncompliance with
Environmental Laws, failure to receive required permits, licenses
or other approvals or failure to comply with the terms and
conditions of such permits, licenses or approvals would not,
singly or in the aggregate, have a Material Adverse Effect.
*(x) The Company has complied with all provisions of
Florida Statutes, <section>517.075, relating to issuers doing
business with Cuba.
7. INDEMNIFICATION AND CONTRIBUTION. (a) The Company agrees
to indemnify and hold harmless each Underwriter and each person,
if any, who controls any Underwriter within the meaning of
Section 15 of the Act or Section 20(a) of the Exchange Act from
and against any and all losses, claims, damages, liabilities and
expenses (including reasonable costs of investigation) arising
out of or based upon any untrue statement or alleged untrue
statement of a material fact contained in any Prepricing
Prospectus or in any Prospectus Supplement or in the Registration
Statement or the Prospectus or in any amendment or supplement
thereto, or arising out of or based upon any omission or alleged
omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not
misleading, except insofar as such losses, claims, damages,
liabilities or expenses arise out of or are based upon any untrue
statement or omission or alleged untrue statement or omission
which has been made therein or omitted therefrom in reliance upon
and in conformity with the information relating to such
Underwriter furnished in writing to the Company by an Underwriter
expressly for use in connection therewith; provided, however,
that the indemnification contained in this paragraph (a) with
respect to any Prepricing Prospectus shall not inure to the
benefit of any Underwriter (or to the benefit of any person
controlling such Underwriter) on account of any such loss, claim,
damage, liability or expense arising from the sale of the
Securities by such Underwriter to any person if a copy of the
Prospectus shall not have been delivered or sent to such person
within the time required by the Act and the regulations
thereunder, and the untrue statement or alleged untrue statement
or omission or alleged omission of a material fact contained in
such Prepricing Prospectus was corrected in the Prospectus,
provided that the Company has delivered the Prospectus to the
several Underwriters in requisite quantity on a timely basis to
permit such delivery or sending. The foregoing indemnity
agreement shall be in addition to any liability which the Company
may otherwise have.
(b) If any action, suit or proceeding shall be brought
against any Underwriter or any person controlling any Underwriter
in respect of which indemnity may be sought against the Company,
such Underwriter or such controlling person shall promptly notify
the Company, and the Company shall assume the defense thereof,
including the employment of counsel and payment of all fees and
expenses. Such Underwriter or any such controlling person shall
have the right to employ separate counsel in any such action,
suit or proceeding and to participate in the defense thereof, but
the fees and expenses of such counsel shall be at the expense of
such Underwriter or such controlling person unless (i) the
Company has agreed in writing to pay such fees and expenses, (ii)
the Company has failed to assume the defense and employ counsel,
or (iii) the named parties to any such action, suit or proceeding
(including any impleaded parties) include both such Underwriter
or such controlling person and the Company and such Underwriter
or such controlling person shall have been advised by its counsel
that representation of such indemnified party and the Company by
the same counsel would be inappropriate under applicable
standards of professional conduct (whether or not such
representation by the same counsel has been proposed) due to
actual or potential differing interests between them (in which
case the Company shall not have the right to assume the defense
of such action, suit or proceeding on behalf of such Underwriter
or such controlling person). It is understood, however, that the
Company shall, in connection with any one such action, suit or
proceeding or separate but substantially similar or related
actions, suits or proceedings in the same jurisdiction arising
out of the same general allegations or circumstances, be liable
for the reasonable fees and expenses of only one separate firm of
attorneys (in addition to any local counsel) at any time for all
such Underwriters and controlling persons not having actual or
potential differing interests with you or among themselves, which
firm shall be designated in writing by Smith Barney Inc., and
that all such fees and expenses shall be reimbursed as they are
incurred. The Company shall not be liable for any settlement of
any such action, suit or proceeding effected without its written
consent, but if settled with such written consent, or if there be
a final judgment for the plaintiff in any such action, suit or
proceeding, the Company agrees to indemnify and hold harmless any
Underwriter, to the extent provided in the preceding paragraph,
and any such controlling person from and against any loss, claim,
damage, liability or expense by reason of such settlement or
judgment.
(c) Each Underwriter agrees, severally and not jointly,
to indemnify and hold harmless the Company, its directors, its
officers who sign the Registration Statement, and any person who
controls the Company within the meaning of Section 15 of the Act
or Section 20(a) of the Exchange Act, to the same extent as the
foregoing indemnity from the Company to each Underwriter, but
only with respect to information relating to such Underwriter
furnished in writing by or on behalf of such Underwriter through
you expressly for use in the Registration Statement, the
Prospectus, any Prepricing Prospectus, any Prospectus Supplement,
or any amendment or supplement thereto. If any action, suit or
proceeding shall be brought against the Company, any of its
directors, any such officer, or any such controlling person based
on the Registration Statement, the Prospectus or any Prepricing
Prospectus, any Prospectus Supplement, or any amendment or
supplement thereto, and in respect of which indemnity may be
sought against any Underwriter pursuant to this paragraph (c),
such Underwriter shall have the rights and duties given to the
Company by paragraph (b) above (except that if the Company shall
have assumed the defense thereof such Underwriter shall not be
required to do so, but may employ separate counsel therein and
participate in the defense thereof, but the fees and expenses of
such counsel shall be at such Underwriter's expense), and the
Company, its directors, any such officer, and any such
controlling person shall have the rights and duties given to the
Underwriters by paragraph (b) above. The foregoing indemnity
agreement shall be in addition to any liability which any
Underwriter may otherwise have.
(d) If the indemnification provided for in this Section 7 is
unavailable to an indemnified party under paragraphs (a) or (c)
hereof in respect of any losses, claims, damages, liabilities or
expenses referred to therein, then an indemnifying party, in lieu
of indemnifying such indemnified party, shall contribute to the
amount paid or payable by such indemnified party as a result of
such losses, claims, damages, liabilities or expenses (i) in such
proportion as is appropriate to reflect the relative benefits
received by the Company on the one hand and the Underwriters on
the other hand from the offering of the Securities, or (ii) if
the allocation provided by clause (i) above is not permitted by
applicable law, in such proportion as is appropriate to reflect
not only the relative benefits referred to in clause (i) above
but also the relative fault of the Company on the one hand and
the Underwriters on the other in connection with the statements
or omissions that resulted in such losses, claims, damages,
liabilities or expenses, as well as any other relevant equitable
considerations. The relative benefits received by the Company on
the one hand and the Underwriters on the other shall be deemed to
be in the same proportion as the total net proceeds from the
offering (before deducting expenses) received by the Company bear
to the total underwriting discounts and commissions received by
the Underwriters, in each case as set forth in the table on the
cover page of the Prospectus. The relative fault of the Company
on the one hand and the Underwriters on the other hand shall be
determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to
information supplied by the Company on the one hand or by the
Underwriters on the other hand and the parties' relative intent,
knowledge, access to information and opportunity to correct or
prevent such statement or omission.
(e) The Company and the Underwriters agree that it would not
be just and equitable if contribution pursuant to this Section 7
were determined by a 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 paragraph (d) above. The
amount paid or payable by an indemnified party as a result of the
losses, claims, damages, liabilities and expenses referred to in
paragraph (d) above shall be deemed to include, subject to the
limitations set forth above, any legal or other expenses
reasonably incurred by such indemnified party in connection with
investigating any claim or defending any such action, suit or
proceeding. Notwithstanding the provisions of this Section 7, no
Underwriter shall be required to contribute any amount in excess
of the amount by which the total price of the Securities
underwritten by it and distributed 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. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f)
of the Act) shall be entitled to contribution from any person who
was not guilty of such fraudulent misrepresentation. The
Underwriters' obligations to contribute pursuant to this Section
7 are several in proportion to the respective numbers of Firm
Securities set forth opposite their names in Schedule II hereto
(or such numbers of Firm Securities increased as set forth in
Section 10 hereof) and not joint.
(f) No indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement of any
pending or threatened action, suit or proceeding in respect of
which any indemnified party is or could have been a party and
indemnity could have been sought hereunder by such indemnified
party, unless such settlement includes an unconditional release
of such indemnified party from all liability on claims that are
the subject matter of such action, suit or proceeding.
(g) Any losses, claims, damages, liabilities or expenses for
which an indemnified party is entitled to indemnification or
contribution under this Section 7 shall be paid by the
indemnifying party to the indemnified party as such losses,
claims, damages, liabilities or expenses are incurred. The
indemnity and contribution agreements contained in this Section 7
and the representations and warranties of the Company set forth
in this Agreement shall remain operative and in full force and
effect, regardless of (i) any investigation made by or on behalf
of any Underwriter or any person controlling any Underwriter, the
Company, its directors or officers or any person controlling the
Company, (ii) acceptance of any Securities and payment therefor
hereunder, and (iii) any termination of this Agreement. A
successor to any Underwriter or any person controlling any
Underwriter, or to the Company, its directors or officers, or any
person controlling the Company, shall be entitled to the benefits
of the indemnity, contribution and reimbursement agreements
contained in this Section 7.
8. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The several
obligations of the Underwriters to purchase the Firm Securities
hereunder are subject to the following conditions:
(a) If, at the time this Agreement is executed and
delivered, it is necessary for the registration statement or a
post-effective amendment thereto to be declared effective before
the offering of the Securities may commence, the registration
statement or such post-effective amendment shall have become
effective not later than 5:30 P.M., New York City time, on the
date hereof, or at such later date and time as shall be consented
to in writing by you, and all filings, if any, required by Rules
424 and 430A under the Act shall have been timely made; no stop
order suspending the effectiveness of the registration statement
shall have been issued and no proceeding for that purpose shall
have been instituted or, to the knowledge of the Company or any
Underwriter, threatened by the Commission, and any request of the
Commission for additional information (to be included in the
registration statement or the prospectus or otherwise) shall have
been complied with to your satisfaction.
(b) Subsequent to the effective date of this Agreement,
there shall not have occurred (i) any change, in or affecting
the condition (financial or other), business, properties, net
worth, or results of operations of the Company or the
subsidiaries not contemplated by the Prospectus, which in your
opinion would materially adversely affect the market for the
Securities, or (ii) any event or development relating to or
involving the Company or any officer or director of the Company
which makes any statement made in the Prospectus untrue or which,
in the opinion of the Company and its counsel or the Underwriters
and their counsel, requires the making of any addition to or
change in the Prospectus in order to state a material fact
required by the Act or any other law to be stated therein or
necessary in order to make the statements therein not misleading,
if amending or supplementing the Prospectus to reflect such event
or development would, in your opinion materially adversely affect
the market for the Securities.
(c) You shall have received on the Closing Date, an
opinion of Rudnick & Wolfe, counsel for the Company, dated the
Closing Date and addressed to you to the effect that:
(i) The Company is a corporation duly organized and
validly existing in good standing under the laws of the State of
Michigan with full corporate power and authority to own, lease
and operate its properties and to conduct its business as
described in the Registration Statement and the Prospectus (and
any amendment or supplement thereto), and is duly registered and
qualified to conduct its business and is in good standing in the
States of California, Indiana and Texas;
(ii) Each of the Material Subsidiaries is a general
or limited partnership or corporation duly organized and validly
existing in good standing under the laws of the jurisdiction of
its organization, with full power and authority to own, lease,
and operate its properties and to conduct its business as
described in the Registration Statement and the Prospectus (and
any amendment or supplement thereto) and is duly registered and
qualified to conduct its business and is in good standing in the
jurisdictions identified in Schedule III hereof; and all the
outstanding shares of capital stock of each of the Material
Subsidiaries that is a corporation have been duly authorized and
validly issued, are fully paid and nonassessable, and all of the
partnership interests in each Material Subsidiary that is a
partnership are validly issued and fully paid. Except as
described in the Registration Statement, the Prospectus (and any
amendment or supplement thereto) and Schedule III hereof, all of
such shares and interests in the Material Subsidiaries owned by
the Company are owned by the Company directly, or indirectly
through one of the other subsidiaries, free and clear of any
perfected security interest, or, to the best knowledge of such
counsel, any other security interest, lien, adverse claim, equity
or other encumbrance;
(iii) The authorized and outstanding capital stock
of the Company is as set forth under the caption "Capitalization"
in the Prospectus; and the authorized capital stock of the
Company conforms in all material respects as to legal matters to
the description thereof contained in the Prospectus under the
captions "Description of the Capital Stock of the Company" and
"Description of Warrants";
(iv) All the shares of capital stock of the Company
outstanding prior to the issuance of the Securities to be issued
and sold by the Company hereunder, have been duly authorized and
validly issued, and are fully paid and nonassessable;
(v) The Securities to be issued and sold to the
Underwriters by the Company hereunder have been duly authorized
and, when issued and delivered to the Underwriters against
payment therefor in accordance with the terms hereof, will be
validly issued, fully paid and nonassessable and free of any
preemptive, or to the best knowledge of such counsel, similar
rights that entitle or will entitle any person to acquire any
Securities upon the issuance thereof by the Company;
(vi) The Underlying Securities, if any, have been
duly authorized and reserved, and, when such securities are
issued and delivered as contemplated by the terms of the
applicable Securities Document, such securities will be validly
issued, fully paid and nonassessable
(vii) The execution and delivery and the performance
by the Company of the Securities Documents, if any, has been duly
authorized by all necessary corporate action of the Company, and
have been duly executed and delivered by the Company, and
assuming due authorization, execution and delivery of such
Securities Documents by parties other than the Company as
specified in the applicable Securities Documents, such agreements
are valid and binding instruments of the Company enforceable
against the Company in accordance with their respective terms,
subject to the effect of bankruptcy, insolvency, moratorium,
fraudulent conveyance, reorganization and similar laws relating
to creditors' rights generally and to the application of
equitable principles in any proceeding, whether at law or in
equity;
(viii) The form of certificates for the Securities
conforms to the requirements of the Michigan Business Corporation
Act;
(ix) The Registration Statement and all post-
effective amendments, if any, have become effective under the Act
and, to the best knowledge of such counsel, no stop order
suspending the effectiveness of the Registration Statement has
been issued and no proceedings for that purpose are pending
before or contemplated by the Commission; and any required filing
of the Prospectus pursuant to Rule 424(b) has been made in
accordance with Rule 424(b);
(x) The Company has all requisite corporate power
and authority to enter into this Agreement and to issue, sell and
deliver the Securities to be sold by it to the Underwriters as
provided herein, and this Agreement has been duly authorized,
executed and delivered by the Company and is a valid, legal and
binding agreement of the Company, enforceable against the Company
in accordance with its terms, except as enforcement of rights to
indemnity and contribution hereunder may be limited by federal or
state securities laws or principles of public policy and subject
to the qualification that the enforceability of the Company's
obligations hereunder may be limited by bankruptcy, fraudulent
conveyance, insolvency, reorganization, moratorium, and other
laws relating to or affecting creditors' rights generally and by
general equitable principles;
(xi) Neither the Company nor any of the Material
Subsidiaries is (i) in violation of its respective certificate or
articles of incorporation, bylaws, partnership agreements, or
other organizational documents; (ii) or to the best knowledge of
such counsel, (A) is in default in any material respect in the
performance of any material obligation, agreement or condition
contained in any bond, debenture, note or other evidence of
indebtedness or in any material agreement, indenture, lease, or
other instrument known to such counsel to which such person is a
party or by which any of them or their respective properties may
be bound, or (B) in violation of any law, ordinance,
administrative or governmental rule or regulation applicable to
the Company or any Material Subsidiary or of any decree of any
court or governmental agency or body having jurisdiction over the
Company or the Material Subsidiaries which violation would have a
Material Adverse Effect;
(xii) Neither the offer, sale or delivery of the
Securities, the execution, delivery or performance of this
Agreement, compliance by the Company with the provisions hereof
nor consummation by the Company of the transactions contemplated
hereby conflicts or will conflict with or constitutes or will
constitute a breach of, or a default under, the certificate or
articles of incorporation, bylaws, partnership agreements or
other organizational documents, of the Company or any of the
Material Subsidiaries or any agreement, indenture, lease or other
instrument to which the Company or any of the Material
Subsidiaries is a party or by which any of them or any of their
respective properties is bound that is an exhibit to the
Registration Statement or to any Incorporated Document, or is
known to such counsel, or will result in the creation or
imposition of any lien, charge or encumbrance upon any property
or assets of the Company or any of the Material Subsidiaries;
(xiii) No consent, approval, author-ization or
other order of, or registration or filing with, any court,
regulatory body, administrative agency or other governmental
body, agency, or official is required on the part of the Company
(except as have been obtained under the Act, the Exchange Act and
under state securities or Blue Sky laws governing the purchase
and distribution of the Securities) for the valid issuance and
sale of the Securities to the Underwriters as contemplated by
this Agreement;
(xiv) The Registration Statement and the
Prospectus and any supplements or amendments thereto (except for
the financial statements and the notes thereto and the schedules
and other financial and statistical data included therein,
including such information set forth under the caption
"Management's Discussion and Analysis of Financial Condition and
Results of Operations," as to which such counsel need not express
any opinion) comply as to form in all material respects with the
requirements of the Act; and each of the Incorporated Documents
(except for the financial statements and the notes thereto and
the schedules and other financial and statistical data included
therein, including such information set forth under the caption
"Management's Discussion and Analysis of Financial Condition and
Results of Operations," as to which counsel need not express any
opinion) complies as to form in all material respects with the
Exchange Act and the rules and regulations of the Commission
thereunder;
(xv) To the best knowledge of such counsel, (A)
other than as described or contemplated in the Prospectus (or any
supplement thereto), there are no legal or governmental
proceedings pending or threatened against the Company or any of
the Material Subsidiaries, or to which the Company or any of the
Material Subsidiaries, or any of their property, is subject,
which are required to be described in the Registration Statement
or Prospectus (or any amendment or supplement thereto) and (B)
there are no agreements, indentures, leases or other instruments,
that are required to be described in the Registration Statement
or the Prospectus (or any amendment or supplement thereto) or to
be filed as an exhibit to the Registration Statement or any
Incorporated Document that are not described or filed as
required;
(xvi) The statements in the Registration
Statement and Prospectus, insofar as they are descriptions of
contracts, agreements or other legal documents, or refer to
statements of law or legal conclusions, are accurate in all
material respects and present fairly the information required to
be shown; and
(xvii) Although counsel has not undertaken,
except as otherwise indicated in their opinion, to determine
independently, and does not assume any responsibility for, the
accuracy or completeness of the statements in the Registration
Statement, such counsel has participated in the preparation of
the Registration Statement and the Prospectus, including review
and discussion of the contents thereof (including review and
discussion of the contents of all Incorporated Documents), and
nothing has come to the attention of such counsel that has caused
them to believe that the Registration Statement (including the
Incorporated Documents) at the time the Registration Statement
became effective, contained an untrue statement of a material
fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein not
misleading or that the Prospectus, as of its date and as of the
Closing Date or the Option Closing Date, as the case may be, or
that any amendment or supplement to the Prospectus, as of its
respective date, and as of the Closing Date or the Option Closing
Date, as the case may be, contained any untrue statement of a
material fact or omitted to state a material fact necessary in
order to make the statements therein, in the light of the
circumstances under which they were made, not misleading (it
being understood that such counsel need express no opinion with
respect to the financial statements and the notes thereto and the
schedules and other financial and statistical data included in
the Registration Statement or the Prospectus or any Incorporated
Document including such information set forth under the caption
"Management's Discussion and Analysis of Financial Condition and
Results of Operations,").
In rendering their opinion as aforesaid, counsel may rely upon
an opinion or opinions, each dated the Closing Date, of other
counsel retained by them or the Company as to laws of any
jurisdiction other than the United States or the State of
Illinois, provided that (1) each such local counsel is acceptable
to the Underwriters, (2) such reliance is expressly authorized by
each opinion so relied upon and a copy of each such opinion is
delivered to the Underwriters and is, in form and substance
satisfactory to them and their counsel, and (3) counsel shall
state in their opinion that they believe that they and the
Underwriters are justified in relying thereon.
(d) You shall have received on the Closing Date an opinion
of Skadden, Arps, Slate, Meagher & Flom, counsel for the
Underwriters, dated the Closing Date and addressed to you with
respect to the matters referred to in clauses (v), (ix), (x), and
(xiv) of the foregoing paragraph (c) and such other related
matters as you may request.
(e) You shall have received letters addressed to you and
dated the date hereof and the Closing Date from Ernst & Young
LLP, independent certified public accountants, substantially in
the forms heretofore approved by you.
(f)(i) No stop order suspending the effectiveness of the
Registration Statement shall have been issued and no proceedings
for that purpose shall have been taken or, to the knowledge of
the Company, shall be contemplated by the Commission at or prior
to the Closing Date; (ii) there shall not have been any change in
the capital stock of the Company nor any material increase in the
short-term or long-term debt of the Company (other than in the
ordinary course of business) from that set forth or contemplated
in the Registration Statement or the Prospectus (or any amendment
or supplement thereto); (iii) there shall not have been, since
the respective dates as of which information is given in the
Registration Statement and the Prospectus (or any amendment or
supplement thereto), except as may otherwise be stated in the
Registration Statement and Prospectus (or any amendment or
supplement thereto), any material adverse change in the condition
(financial or other), business, properties, net worth or results
of operations of the Company and the subsidiaries taken as a
whole; (iv) the Company and the subsidiaries shall not have any
liabilities or obligations, direct or contingent (whether or not
in the ordinary course of business), that are material to the
Company and the subsidiaries, taken as a whole, other than those
reflected in the Registration Statement or the Prospectus (or any
amendment or supplement thereto); and (v) all the representations
and warranties of the Company contained in this Agreement shall
be true and correct on and as of the date hereof and on and as of
the Closing Date as if made on and as of the Closing Date, and
you shall have received a certificate, dated the Closing Date and
signed by the chief executive officer and the chief financial
officer of the Company (or such other officers as are acceptable
to you), to the effect set forth in this Section 8(f) and in
Section 8(g) hereof.
(g) The Company shall not have failed at or prior to the
Closing Date to have performed or complied with any of its
agreements herein contained and required to be performed or
complied with by it hereunder at or prior to the Closing Date.
(h) Prior to the Closing Date, the Securities, as set forth in
Schedule I hereto, which the Company agrees to sell pursuant to
this Agreement shall have been listed, subject to notice of
issuance, on the New York Stock Exchange.
(i) There shall not have been any downgrading in the rating
of any debt securities or preferred stock of the Company by any
"nationally recognized statistical rating organization" (as
defined for purposes of Rule 436(g) under the Act), or any public
announcement that any such organization has under surveillance or
review its rating of any debt securities or preferred stock of
the Company (other than an announcement with positive
implications of a possible upgrading, and no implication of a
possible downgrading, of such rating),
(j) The Company shall have furnished or caused to be
furnished to you such further certificates and documents as you
shall have requested.
All such opinions, certificates, letters and other documents
will be in compliance with the provisions hereof only if they are
satisfactory in form and substance to you and your counsel.
Any certificate or document signed by any officer of the
Company and delivered to you or to counsel for the Underwriters,
shall be deemed a representation and warranty by the Company to
each Underwriter as to the statements made therein.
The several obligations of the Underwriters to purchase
Additional Securities hereunder are subject to the satisfaction
on and as of any Option Closing Date of the conditions set forth
in this Section 8, except that, if any Option Closing Date is
other than the Closing Date, the certificates, opinions and
letters referred to in paragraphs (c) through (g) shall be dated
the Option Closing Date in question and the opinions called for
by paragraphs (c) and (d) shall be revised to reflect the sale of
Additional Securities.
9. EXPENSES. The Company agrees to pay the following costs
and expenses and all other costs and expenses incident to the
performance by it of its obligations hereunder: (i) the
preparation, printing or reproduction, and filing with the
Commission of the registration statement (including financial
statements and exhibits thereto), each Prepricing Prospectus,
each Prospectus Supplement, the Prospectus, and each amendment or
supplement to any of them; (ii) the printing (or reproduction)
and delivery (including postage, air freight charges and charges
for counting and packaging) of such copies of the registration
statement, each Prepricing Prospectus, each Prospectus
Supplement, the Prospectus, the Incorporated Documents, and all
amendments or supplements to any of them, as may be reasonably
requested for use in connection with the offering and sale of the
Securities; (iii) the preparation, printing, authentication,
issuance and delivery of certificates for the Securities,
including any stamp taxes in connection with the original
issuance and sale of the Securities; (iv) the printing (or
reproduction) and delivery of this Agreement, the preliminary and
supplemental Blue Sky Memoranda and all other agreements or
documents printed (or reproduced) and delivered in connection
with the offering of the Securities; (v) if applicable, the
listing of the Securities on the New York Stock Exchange; (vi)
the registration or qualification of the Securities for offer and
sale under the securities or Blue Sky laws of the several states
as provided in Section 5(g) hereof (including the reasonable
fees, expenses and disbursements of counsel relating to the
preparation, printing or reproduction, and delivery of the
preliminary and supplemental Blue Sky Memoranda and such
registration and qualification); (vii) the transportation and
other expenses incurred by or on behalf of Company
representatives in connection with presentations to prospective
purchasers of the Securities; and (viii) the fees and expenses of
the Company's accountants and the fees and expenses of counsel
(including local and special counsel) for the Company.
10. EFFECTIVE DATE OF AGREEMENT. This Agreement shall
become effective: (i) upon the execution and delivery hereof by
the parties hereto; or (ii) if, at the time this Agreement is
executed and delivered, it is necessary for the registration
statement or a post-effective amendment thereto to be declared
effective before the offering of the Securities may commence,
when notification of the effectiveness of the registration
statement or such post-effective amendment has been released by
the Commission. Until such time as this Agreement shall have
become effective, it may be terminated by the Company, by
notifying you, or by you, as Underwriters of the several
Underwriters, by notifying the Company.
If any one or more of the Underwriters shall fail or refuse
to purchase Securities which it or they are obligated to purchase
hereunder on the Closing Date, and the aggregate number of
Securities that such defaulting Underwriter or Underwriters are
obligated but fail or refuse to purchase is not more than
one-tenth of the aggregate number of Securities which the
Underwriters are obligated to purchase on the Closing Date, each
non-defaulting Underwriter shall be obligated, severally, in the
proportion which the number of Firm Securities set forth opposite
its name in Schedule II hereto bears to the aggregate number of
Firm Securities set forth opposite the names of all
non-defaulting Underwriters or in such other proportion as you
may specify in accordance with Section 20 of the Master Agreement
Among Underwriters of Smith Barney Inc., to purchase the
Securities which such defaulting Underwriter or Underwriters are
obligated, but fail or refuse, to purchase. If any one or more
of the Underwriters shall fail or refuse to purchase Securities
which it or they are obligated to purchase on the Closing Date
and the aggregate number of Securities with respect to which such
default occurs is more than one-tenth of the aggregate number of
Securities which the Underwriters are obligated to purchase on
the Closing Date and arrangements satisfactory to you and the
Company for the purchase of such Securities by one or more non-
defaulting Underwriters or other party or parties approved by you
and the Company are not made within 36 hours after such default,
this Agreement will terminate without liability on the part of
any non-defaulting Underwriter or the Company. In any such case
which does not result in termination of this Agreement, either
you or the Company shall have the right to postpone the Closing
Date, but in no event for longer than seven days, in order that
the required changes, if any, in the Registration Statement and
the Prospectus or any other documents or arrangements may be
effected. Any action taken under this paragraph shall not
relieve any defaulting Underwriter from liability in respect of
any such default of any such Underwriter under this Agreement.
The term "Underwriter" as used in this Agreement includes, for
all purposes of this Agreement, any party not listed in Schedule
II hereto who, with your approval and the approval of the
Company, purchases Securities which a defaulting Underwriter is
obligated, but fails or refuses, to purchase.
Any notice under this Section 10 may be given by telegram,
telecopy or telephone but shall be subsequently confirmed by
letter.
11. TERMINATION OF AGREEMENT. This Agreement shall be
subject to termination in your absolute discretion, without
liability on the part of any Underwriter to the Company, by
notice to the Company, if prior to the Closing Date or any Option
Closing Date (if different from the Closing Date and then only as
to the Additional Securities), as the case may be, (i) trading in
securities generally on the New York Stock Exchange, the American
Stock Exchange or the Nasdaq National Market shall have been
suspended or materially limited, (ii) a general moratorium on
commercial banking activities in New York or Michigan shall have
been declared by either federal or state authorities, or (iii)
there shall have occurred any outbreak or escalation of
hostilities or other international or domestic calamity, crisis
or change in political, financial or economic conditions, the
effect of which on the financial markets of the United States is
such as to make it, in your judgment, impracticable or
inadvisable to commence or continue the offering of the
Securities at the offering price to the public set forth on the
cover page of the Prospectus or to enforce contracts for the
resale of the Securities by the Underwriters. Notice of such
termination may be given to the Company by telegram, telecopy or
telephone and shall be subsequently confirmed by letter.
12. INFORMATION FURNISHED BY THE UNDERWRITERS. In addition
to any Statement set forth in Schedule I hereto, the statements
set forth in the last paragraph on the cover page, the
stabilization legend on the inside cover page (if so included),
and the statements in the first and third paragraphs under the
caption "Underwriting" in any Prepricing Prospectus, Prospectus
Supplement, and in the Prospectus, constitute the only
information furnished by or on behalf of the Underwriters through
you as such information is referred to in Sections 6(b) and 7
hereof.
13. MISCELLANEOUS. Except as otherwise provided in Sections
5, 10 and 11 hereof, notice given pursuant to any provision of
this Agreement shall be in writing and shall be delivered (i) if
to the Company, at the office of the Company at Horizon Group,
Inc., 5000 Hakes Drive, Norton Shores, MI 49441, Attention: Mr.
Joseph Cattivera, Executive Vice President, or (ii) if to you at
the office of Smith Barney, Inc. at Smith Barney Inc., 388
Greenwich Street, New York, New York 10013, Attention: Manager,
Investment Banking Division.
This Agreement has been and is made solely for the benefit of
the Underwriters, the Company, its directors and officers, and
the other controlling persons referred to in Section 7 hereof and
their respective successors and assigns, to the extent provided
herein, and no other person shall acquire or have any right under
or by virtue of this Agreement. Neither the term "successor" nor
the term "successors and assigns" as used in this Agreement shall
include a purchaser from any Underwriter of any of the Securities
in his status as such purchaser.
14. APPLICABLE LAW; COUNTERPARTS. This Agreement shall be
governed by and construed in accordance with the laws of the
State of New York applicable to contracts made and to be
performed within the State of New York.
This Agreement may be signed in various counterparts which
together constitute one and the same instrument. If signed in
counterparts, this Agreement shall not become effective unless at
least one counterpart hereof shall have been executed and
delivered on behalf of each party hereto.
<PAGE>
Please confirm that the foregoing correctly sets forth the
agreement between the Company and the Underwriters.
Very truly yours,
HORIZON GROUP, INC.
By /s/ JOSEPH CATTIVERA
Name:
Title:
Confirmed as of the date first
above mentioned
SMITH BARNEY INC.
By /s/ MARK R. PATTERSON
Managing Director
<PAGE>
SCHEDULE I
DESCRIPTION OF SECURITIES; TERMS OF OFFERING
1. REGISTRATION STATEMENT: File No. 33-95174.
2. DATE OF UNDERWRITING AGREEMENT: July 17, 1996.
3. TITLE OF SECURITIES:
Common Stock, par value $.01 per share.
4. AGGREGATE NUMBER OF FIRM SECURITIES:
Common Stock, par value $.01 per share: 1,500,000.
5. AGGREGATE NUMBER OF ADDITIONAL SECURITIES:
Common Stock, par value $.01 per share: 225,000.
6. PURCHASE PRICE FOR THE FIRM SECURITIES BY UNDERWRITERS:
$28,500,000.00 in the aggregate.
7. PURCHASE PRICE FOR THE ADDITIONAL SECURITIES:
$19.00 per share.
8. SPECIFIED FUNDS FOR PAYMENT OF THE AGGREGATE PURCHASE PRICE:
Wire Transfer of Same Day Funds.
9. TERMS OF PUBLIC OFFERING:
The Underwriters have advised the Company that they propose
to offer the Securities for sale, from time to time, to
purchasers directly or through agents, or through brokers in
brokerage transactions on the New York Stock Exchange, or to
underwriters or dealers in negotiated transactions or in a
combination of such methods of sale, at fixed prices which
may be changed, at market prices prevailing at the time of
sale, at prices related to such prevailing market prices or
at negotiated prices.
10. SECURITIES DOCUMENTS, IF ANY:
N/A
11. TERMS OF SECURITIES:
Preferred Stock: N/A
Warrants: N/A
Other Provisions: N/A
12. LOCK-UP REQUIREMENTS:
As set forth in Section 5(n) of this Agreement.
13. DELIVERY OF SECURITIES:
Smith Barney Inc., 333 West 34th Street, New York, New York
on or about July 23, 1996.
14. PRE-CLOSING LOCATION:
Rudnick & Wolfe, 203 North LaSalle Street, Suite 1800,
Chicago, Illinois on July 22, 1996.
15. CLOSING LOCATION:
Rudnick & Wolfe, 203 North LaSalle Street, Suite 1800,
Chicago, Illinois on July 23, 1996.
16. OTHER:
a) Section 12 of the attached Agreement is amended to add
the statements in the third-to-last paragraph on the
cover page of the Prospectus Supplement, dated July 17,
1996, as information furnished by or on behalf of the
Underwriters.
b) Wire Instructions:
Bank Name: First of America
Account Name: Horizon/Glen Outlet Centers
L.P. - General Account
Account Number: 4038030328
Bank Routing (ABA #): 072-00-0915
<PAGE>
SCHEDULE II
Horizon Group, Inc.
Number of
Firm Securities
UNDERWRITER TO BE PURCHASED
Smith Barney Inc. 1,500,000
Total 1,500,000
<PAGE>
SCHEDULE III
SUBSIDIARIES
Material State of States of Foreign
SUBSIDIARY ORGANIZATION QUALIFICATION
Horizon/Glen Outlet Delaware California, Indiana,
Centers Limited Michigan and Texas
Partnership
First Horizon Group Delaware Wisconsin
Limited Partnership
SECURITY INTEREST
All of the partnership interests in First Horizon Group Limited
Partnership have been pledged to Nomura Asset Capital Corporation as
partial security in connection with a $65.0 million mortgage loan received
by First Horizon Group Limited Partnership in February 1996.
