Exhibit 1.1
1,200,000 SHARES
PELICAN FINANCIAL, INC.
COMMON STOCK
UNDERWRITING AGREEMENT
________________ ___, 1999
XXXXXXX X. XXXXX & CO.
as representative of the several
underwriters (the "REPRESENTATIVE")
c/o Xxxxxxx X. Xxxxx & Co.
000 Xxxxxx Xxxxxx Xxxxx, Xxxxx 000
Xx. Xxxxxxxxxx, XX 00000-0000
Dear Sirs:
Subject to the terms and conditions stated herein, (i) PELICAN
FINANCIAL, INC., a Delaware corporation (the "Company"), proposes to issue and
sell to the Underwriters named in Schedule I (the "UNDERWRITERS") an aggregate
of 1,200,000 shares (the "FIRM SHARES") of the Company's authorized common
stock, par value $0.01 per share. Furthermore, at the election of the
Underwriters and subject to the terms and conditions stated herein, Xxxxxxx X.
Xxxxxxx (the "Selling Shareholder") proposes to sell to the Underwriters an
aggregate of 180,000 additional shares of Common Stock (the "OPTIONAL SHARES").
The Firm Shares and the Optional Shares that the Underwriters elect to purchase
pursuant to Section 2 hereof are collectively called the "SHARES." All shares of
common stock of the Company, including the Shares, are hereinafter referred to
as "COMMON Stock."
1. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
a. The Company represents and warrants to and agrees with each
Underwriter that:
(i) A registration statement on Form S-1 (File No. 333- 76841)
with respect to the Shares, including a preliminary form of
prospectus, has been prepared by the Company in conformity
with the requirements of the Securities Act of 1933, as
amended (the "Act"), and the applicable Rules and Regulations
(the "Rules and Regulations") of the Securities and Exchange
Commission (the "Commission") under the Act and has been filed
with the Commission, and such amendments to such registration
statement as may have been required prior to the date hereof
have been filed with the Commission, and such amendments have
been similarly prepared, including any copy thereof filed with
the Commission pursuant to its Electronic Data Gathering,
Analysis and Retrieval System ("XXXXX"). Copies of such
registration statement and amendment or amendments and of each
related prospectus have been delivered to you, including
copies of any filings pursuant to XXXXX. Such registration
statement, including the prospectus, Part II, and all
financial schedules and exhibits and all other documents filed
as a part thereof or incorporated by reference and all
information deemed to be a part thereof as of such time of
effectiveness, including if applicable any subsequent
prospectus filed pursuant to paragraph (b) of Rule 430(A) of
the Rules and Regulations, is herein referred to as the
"Registration Statement," and the prospectus included as part
of the Registration Statement on file with the Commission that
discloses, if applicable, all the information that was omitted
from
the prospectus on the effective date pursuant to Rule 430A of
the Rules and Regulations or any subsequent Prospectus filed
with the Commission pursuant to Rule 424(b) of the Rules and
Regulations by the Company with your consent after the
effective date of the Registration Statement, is herein
referred to as the "Final Prospectus." In the event a
prospectus is not filed pursuant to Rule 430A and Rule 424(b)
then, the prospectus included as part of the Registration
Statement on the date when the Registration Statement became
effective is deemed to be the Final Prospectus. Any prospectus
included in the Registration Statement of the Company and in
any amendments thereto prior to the effective date of the
Registration Statement is referred to herein as a "Preliminary
Prospectus."
(ii) The Commission has not issued any order preventing or
suspending the use of any Preliminary Prospectus, and each
Preliminary Prospectus, at the time of filing thereof,
conformed in all material respects to the requirements of the
Act and the Rules and Regulations; when the Registration
Statement becomes effective and at all times subsequent
thereto up to and at the Closing Date (hereinafter defined)
and any later date on which Option Shares are to be purchased,
(i) the Registration Statement and any post-effective
amendment thereto, the Final Prospectus and amendments or
supplements thereto, in all material respects conformed and
will conform to the requirements of the Act and the Rules and
Regulations, and (ii) neither the Registration Statement nor
the Final Prospectus, nor any amendment or supplement thereto,
included or will include any untrue statement of a material
fact or omitted or will 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; provided, however, that none of
the representations and warranties contained in this
subparagraph shall apply to information contained in or
omitted from the Registration Statement, the Preliminary
Prospectus or the Final Prospectus or any such amendment or
supplement in reliance upon, and in conformity with, written
information furnished to the Company by any Underwriter,
directly or through you, specifically for inclusion therein.
(iii) Each of the Company's subsidiaries and the percentage of
outstanding shares of capital stock of each of its
subsidiaries owned by the Company are listed on Schedule III
hereto. Each of the Company and its subsidiaries IS
incorporated and existing as a corporation in good standing
under the laws of its jurisdiction OF organization, with the
CORPORATE power and CORPORATE authority to own, lease and
operate its properties and conduct its business as described
in the Final Prospectus and each is duly qualified to do
business as a foreign corporation in good standing in all
other jurisdictions, if any, where the ownership or leasing of
properties or the conduct of its business requires such
qualification; each of the Company and its subsidiaries now
hold, and at the Closing Date and any later date on which
Optional Shares are to be purchased will hold, all licenses,
certificates, permits and approvals from state, Federal and
other regulatory authorities that are required for the Company
to lawfully own, lease and operate its properties and conduct
its business as described in the Final Prospectus or that are
material to the Company's business operations, properties,
assets , condition (financial or otherwise) or prospects, and
all such licenses, certificates, permits and approvals are
valid and in full force and effect; each of the Company and
its subsidiaries are conducting its business, INCLUDING BUT
NOT LIMITED TO LENDING ACTIVITIES, in compliance with all
MATERIAL laws, rules and regulations of each jurisdiction in
which it conducts its business; neither the Company nor its
subsidiaries are in violation of its charter or By-laws or, is
in default in the performance or observance of any MATERIAL
obligation, agreement, covenant or condition contained in any
bond, debenture, note or other evidence of indebtedness or in
any contract, indenture, mortgage, loan
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agreement, joint venture or other agreement or instrument to
which the Company or any of its subsidiaries are a party or by
which they or any of their properties are bound or in
violation of any law, order, rule, regulation, writ,
injunction or decree of any government, governmental
instrumentality or court, domestic or foreign, which defaults
or violations, singly or in the aggregate, would have a
material adverse effect on the business, properties, assets,
rights, operations, condition (financial or otherwise) or
prospects of the Company and its subsidiaries taken as a
whole. The Company does not own or control, directly or
indirectly any corporation, association or other entity other
than its subsidiaries.
(iv) This Agreement has been authorized, executed and
delivered by AN AUTHORIZED REPRESENTATIVE OF the Company and
is a valid and binding agreement on the part of the Company,
enforceable in accordance with its terms; the performance of
this Agreement and the consummation of the transactions herein
contemplated will not result in a breach or violation of any
of the terms and provisions of, or constitute a default under,
(i) any indenture, mortgage, deed of trust, loan agreement,
bond, debenture, note agreement or other evidence of
indebtedness, or any lease, contract or other agreement or
instrument to which the Company is a party or by which its
properties or its subsidiaries' properties are bound, (ii) the
Company's charter or By-laws, or (iii) any applicable statute,
rule or regulation, or any order of any court or governmental
agency or body having jurisdiction over the Company or its
subsidiaries or over their properties, which defaults or
violations, singly or in the aggregate, would have a material
adverse effect on the business, properties, assets, rights,
operations, condition (financial or otherwise) or prospects of
the Company and its subsidiaries taken as a whole; and no
consent, approval, authorization or order of any court or
governmental agency or body is required for the consummation
by the Company of the transactions on its part herein
contemplated, except such as may have been obtained by the
Closing Date (as hereinafter defined) or such as may be
required under the Act or under state or other securities or
Blue Sky laws.
(v) Other than as disclosed in the Final Prospectus, there is
no pending or, to the Company's knowledge, threatened action,
suit, claim or proceeding against Company or its subsidiaries
or any of their officers or any of their properties, assets or
rights before any court or governmental agency or body or
otherwise which might result in any material adverse change in
the business, properties, assets, rights operations, condition
(financial or otherwise) or prospects of the Company and its
subsidiaries taken as a whole, or prevent consummation of the
transactions contemplated hereby.
(vi) There are no contracts or documents of the Company or its
subsidiaries that would be required to be described in the
Final Prospectus or to be filed as exhibits to the
Registration Statement by the Act or by the Rules and
Regulations that have not been accurately described in all
material respects in the Final Prospectus or filed as exhibits
to the Registration Statement.
(vii) The authorized, issued and outstanding capital stock of
the Company is as set forth in the Final Prospectus under the
caption "Capitalization" as of the date stated therein; all
outstanding shares of capital stock of the Company have been
duly authorized and validly issued and are fully paid and
nonassessable and were not issued in violation of any
preemptive right or other rights to purchase such shares, and
the capital stock of the Company conforms in all material
respects to the statements in relation thereto contained in
the Final Prospectus (and such statements correctly state the
substance of the instruments defining the capitalization of
the Company); and the Firm Shares have been duly authorized
for issuance and sale to the
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Underwriters pursuant to this Agreement and, when issued and
delivered by the Company against payment therefor in
accordance with the terms of this Agreement, will be duly and
validly issued and fully paid and nonassessable and no person
has preemptive or other rights to purchase any of the Shares.
No further approval or authorization of any stockholder, the
Board of Directors or others is required for the issuance and
sale of the Firm Shares to the several Underwriters, except as
may be required under the Act or under state or other
securities or Blue Sky laws.
(viii) Xxxxx Xxxxxx & Company LLP, which has examined the
consolidated financial statements of the Company as of
December 31, 1998, and Deloitte & Touche LLP, which has
examined the consolidated financial statement of the Company
for the eleven months ended December 31, 1997, and the year
ended January 31, 1997, together with the related schedules
and notes (the "Audited Financial Statements") and whose
reports appear as part of the Final Prospectus, are
independent accountants within the meaning of the Act and the
Rules and Regulations.
(ix) The Audited Financial Statements and the three-month
unaudited financial information forming part of the
Registration Statement or Final Prospectus (collectively, the
"Financial Statements"), fairly present the consolidated
financial position, results of operations and cash flow of the
Company at the respective dates and for the respective periods
to which they apply; and the Audited Financial Statements and
the unaudited financial information filed with the Commission
as part of the Registration Statement and included as part of
the Final Prospectus have been prepared in accordance with
generally accepted accounting principles consistently applied
throughout the periods shown, EXCEPT AS MAY OTHERWISE BE
STATED THEREIN.
(x) Subsequent to the latest date of the Financial Statements
there has not been (i) any material adverse change in the
business, properties, assets, rights, operations, condition
(financial or otherwise) or prospects of the Company and its
subsidiaries taken as a whole, (ii) any transaction that is
material to the Company and its subsidiaries taken as a whole,
except transactions in the ordinary course of business, (iii)
any obligation that is material to the Company and its
subsidiaries taken as a whole, direct or contingent, incurred
by the Company or its subsidiaries, except obligations
incurred in the ordinary course of business, (iv) any change
that is material to the Company and its subsidiaries taken as
a whole in the capital stock or outstanding indebtedness of
the Company, or (v) any dividend or distribution of any kind
declared, paid or made on the capital stock of the Company,
EXCEPT FOR THE TWO-FOR-ONE STOCK SPLIT DECLARED MARCH 30,
1999, EFFECTIVE MARCH 31, 1999 AND PAID ____________, 1999.
(xi) The Company or its subsidiaries have good and marketable
title to all properties and assets described in the Final
Prospectus as owned by it, free and clear of any liens,
charges, encumbrances or restrictions other than as set forth
in the Final Prospectus, such as are not material to the
business, properties, assets, rights, operations, condition
(financial or otherwise) or prospects of the Company and its
subsidiaries taken as a whole; the agreements to which the
Company is a party described in the Final Prospectus are valid
and enforceable in accordance with their terms by the Company,
except as enforcement may be limited by applicable bankruptcy,
insolvency and other similar laws affecting creditors' rights
and rules of law governing specific performance, injunctive
relief and other equitable remedies and, to its knowledge, the
other contracting party or parties thereto are not in breach
or default under any of such agreements, except for such
breaches or defaults which would not singly or in the
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aggregate, have a material adverse effect on the business,
properties, assets, rights, operations, condition (financial
or otherwise) or prospects of the Company and its subsidiaries
taken as a whole; and the Company has valid and enforceable
leases for the properties described in the Final Prospectus as
leased by it, except as enforcement may be limited by
applicable bankruptcy, insolvency and other similar laws
affecting creditors' rights and rules of law governing
specific performance, injunctive relief and other equitable
remedies.
(xii) The Company has filed all necessary federal, state,
local and foreign tax returns, AS APPLICABLE and has paid all
taxes as due UNLESS SUCH TAXES ARE BEING CONTESTED IN GOOD
FAITH and, to the Company's best knowledge, there is no tax
deficiency that has been or might be asserted against the
Company that would materially and adversely affect its
business, properties, assets, rights, operations, condition
(financial or otherwise) or prospects; all tax liabilities are
adequately provided for on the books of the Company.
(xiii) The Company maintains insurance of the types and in the
amounts required by law and reasonably necessary to operate
its business including, but not limited to, insurance covering
real and personal property owned or leased by the Company
against theft, damage, destruction, acts of vandalism, general
and product liability and all other risks customarily insured
against, all of which insurance is in full force and effect.
(xiv) The Company and each of the Subsidiaries has generally
enjoyed a satisfactory employer-employee relationship with its
employees and is in material compliance with all federal,
state, local, and foreign laws and regulations respecting
employment and employment practices, terms and conditions of
employment and wages and hours. TO THE COMPANY'S KNOWLEDGE
THERE are no pending investigations involving the Company or
any of the Subsidiaries by the U.S. Department of Labor, or
any other governmental agency responsible for the enforcement
of such federal, state, local, or foreign laws and
regulations. There is no unfair labor practice charge or
complaint against the Company or any of the Subsidiaries
pending before the National Labor Relations Board or any
strike, picketing boycott, dispute, slowdown or stoppage
pending or to the Company's knowledge threatened against or
involving the Company or any of the Subsidiaries , and none
has ever occurred. No representation question exists
respecting the employees of the Company or any of the
Subsidiaries, and no collective bargaining agreement or
modification thereof is currently being negotiated by the
Company or any of the Subsidiaries. No grievance or
arbitration proceedings is pending under any expired or
existing collective bargaining agreements of the Company or
any of the Subsidiaries. No labor dispute with the employees
of the Company or any of the Subsidiaries exists, or is
imminent.
(xv) The Company is familiar with the Investment Company Act
of 1940, as amended (the "1940 Act"), and the rules and
regulations thereunder, and has in the past conducted, and
intends in the future to continue to conduct, its affairs in
such a manner as to ensure that it will not become an
"investment company" within the meaning of the 1940 Act and
such rules and regulations.
(xvi) Except as disclosed in the Final Prospectus, neither the
Company nor any of the Subsidiaries maintains, sponsors or
contributes to any program or arrangement that is an "EMPLOYEE
pension benefit plan," an "EMPLOYEE welfare benefit plan," or
a "MULTIEMPLOYER plan" as such terms are defined in Sections
3(2), 3(1) and 3(37),
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respectively, of the Employee Retirement Income Security Act
of 1974, as amended ("ERISA") ("ERISA PLANS"). Neither the
Company nor any of the subsidiaries maintains or contributes,
now or at any time previously, to a defined benefit plan, as
defined in Section 3(35) of ERISA. No ERISA Plan (or any trust
created thereunder) has engaged in a "PROHIBITED transaction"
within the meaning of Section 406 of ERISA of Section 4975 of
the Code, which could subject the Company to any tax penalty
on prohibited transactions and which has not adequately been
corrected. Each ERISA Plan is in compliance with all
reporting, disclosure and other requirements of the Code and
ERISA as they relate to any such ERISA Plan. The Company has
never completely or partially withdrawn from a "MULTIEMPLOYER
plan."
(xvii) Neither the Company nor any of its employees,
directors, stockholders, partners, or affiliates (within the
meaning of the Rules and Regulations) of any of the foregoing
has taken or will take, directly ro indirectly, any action
designed to or which has constituted or which might be
expected to cause or result in, under the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), or otherwise,
stabilization or manipulation of the price of any security of
the Company to facilitate the sale or resale of the Shares or
otherwise.
(xviii) Except as disclosed in the Final Prospectus, none of
the patents, patent applications, trademarks, service marks,
service names, trade names and copyrights, and none of the
licenses and rights to the foregoing presently owned or held
by the Company or any of the Subsidiaries are in dispute,
including without limitation, rights to the names "Washtenaw
Mortgage Company" and "Pelican National Bank" or, to the
Company's knowledge, are in any conflict with the right of any
other person or entity. Except as disclosed in the Prospectus,
the Company and each of the Subsidiaries (i) owns or has the
right to use, free and clear of all liens, charges, claims,
encumbrances, pledges, security interests, or to the Company's
knowledge, defects or other restrictions or equities of any
kind whatsoever, all patents, patent applications, trademarks,
service marks, service names, trade names and copyrights,
technology and licenses and rights with respect to the
foregoing, used in the conduct of its business as now
conducted or proposed with respect to the foregoing, without,
to the Company's knowledge, infringing upon or otherwise
acting adversely to the right or claimed right of any person,
corporation or other entity under or with respect to any of
the foregoing and (ii) is not obligated or under any liability
whatsoever to make any payment by way or royalties, fees or
otherwise to any owner or licensee of, or other claimant to,
any patent, patent application, trademark, service xxxx,
service names, trade name, copyright, know-how, technology of
its business or otherwise. There is no action, suit,
proceeding, inquiry, arbitration, investigation, litigation or
governmental or other proceeding, domestic or foreign, pending
or to the Company's knowledge threatened against the Company
or any of the Subsidiaries which challenges the exclusive
rights of the Company or any of the Subsidiaries with respect
to any trademarks, trade names, service marks, service names,
copyrights, patents, patent applications or licenses or rights
to the foregoing used in the conduct of its business, or which
challenge the right of the Company or any of the Subsidiaries
to use any technology presently used or contemplated to be
used in the conduct of its business.
(xix) The Company and each of the Subsidiaries owns and has
the right to use all trade secrets, know-how (including all
other unpatented and/or unpatentable proprietary or
confidential information, systems or procedures), inventions,
technology, designs, processes, works of authorship, computer
programs and technical data and information (collectively
herein
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"INTELLECTUAL PROPERTY") that are material to the development,
operation and sale of all products and services sold or
proposed to be sold by the Company or any of the Subsidiaries,
without violating any right, lien, or claim of others,
including without limitation, former employers of its
employees; provided, however, that the possibility exists that
other persons or entities, completely independently of the
Company, or its employees or agents, could have developed
trade secrets or items of technical information similar or
identical to those of the Company. Neither the Company nor any
of the Subsidiaries is aware of any such development of
similar or identical trade secrets or technical information by
others.
(xx) Except as disclosed in the Final Prospectus, there are no
outstanding (i) securities or obligations of the Company
convertible into or exchangeable for any capital stock of the
Company, (ii) warrants, rights or options to subscribe for or
purchase from the Company any such capital stock or any such
convertible or exchangeable securities or obligations, or
(iii) obligations of the Company to issue any shares of
capital stock, any such convertible or exchangeable securities
or obligations, or any such warrants, rights or options.
(xxi) Except and to the extent described in the Prospectus, no
holders of any securities of the Company or of any options,
warrants or other convertible or exchangeable securities of
the Company have the right to include any securities issued by
the Company in the Registration Statement or any registration
statement to be filed by the Company or to require the Company
to file a registration statement under the Act and no person
or entity holds any anti-dilution rights with respect to any
securities of the Company.
(xxii) All offers and sales of the Company's capital stock
prior to the date hereof were at all relevant times duly
registered under the Act or exempt from the registration
requirements of the Act and were duly registered or the
subject of an available exemption from the registration
requirements of the applicable state securities or blue sky
laws, and the Company has taken all actions reasonably
necessary for it to assure that such exemptions from
registration would continue to be operative during all
applicable periods of time required by law.
(xxiii) Neither the Company nor any of its Subsidiaries, nor,
to the knowledge of the Company or any of its Subsidiaries,
any director, officer, agent, employee, Affiliate or other
person associated with or acting on behalf of the Company or
any of its Subsidiaries has, directly or indirectly, used any
corporate funds for unlawful contributions, gifts,
entertainment or other unlawful expenses relating to political
activity, or established or maintained any unlawful or
unrecorded funds in violation of Section 30A of the Exchange
Act; made any unlawful payment to foreign or domestic
government officials or employees or to foreign or domestic
political parties or campaigns from corporate funds; violated
any provision of the Foreign Corrupt Practices Act of 1977, as
amended; or made any bribe, rebate, payoff, influence payment,
kickback or other payment unlawful under the laws of the
United States or any foreign jurisdiction.
(xxvi) NEITHER THE COMPANY NOR ANY OF ITS SUBSIDIARIES IS IN
VIOLATION OF ANY FEDERAL OR STATE LAW OR REGULATION RELATING
TO THEIR RESPECTIVE LENDING ACTIVITIES, INCLUDING, WITHOUT
LIMITATION, RULES AND REGULATIONS OF THE FEDERAL HOUSING
ADMINISTRATION OR THE OFFICE OF THE COMPTROLLER OF THE
CURRENCY AND APPLICABLE BANKING LAWS, RULES AND REGULATIONS,
EXCEPT FOR ANY SUCH VIOLATION OF LAW OR REGULATION WHICH WOULD
NOT HAVE A MATERIAL ADVERSE EFFECT ON THE BUSINESS, PROSPECTS,
PROPERTIES, OPERATIONS, CONDITION (FINANCIAL OR
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OTHER) OR RESULTS OF OPERATIONS OF THE COMPANY AND ITS
SUBSIDIARIES TAKEN AS A WHOLE OR WHICH IS DESCRIBED IN OR
CONTEMPLATED BY THE REGISTRATION STATEMENT AND FINAL
PROSPECTUS.
(xxvii) The minute books of the Company and each of the
Subsidiaries have been made available to the Underwriters and
contain a complete summary of all meetings and actions of the
directors, stockholders, audit committee, compensation
committee and any other committee of the Board of Directors of
the Company and each of the Subsidiaries, respectively, since
January 1, 1994 OR SUCH LATER DATE ON WHICH THE COMPANY OR ANY
SUBSIDIARY WAS FORMED, and reflects all transactions referred
to in such minutes accurately in all material respects.
(xxviii) The Company and each of its Subsidiaries makes and
keeps accurate books and records reflecting its assets and
maintains internal accounting controls that provide reasonable
assurance that (i) transactions are executed in accordance
with management's authorization, (ii) transactions are
recorded as necessary to permit preparation of the Company's
financial statements in accordance with generally accepted
accounting principles and to maintain accountability for the
assets of the Company, (iii) access to the assets of the
Company is permitted only in accordance with management's
authorization, and (iv) the recorded accountability for assets
of the Company is compared with existing assets at reasonable
intervals and appropriate action is taken with respect to any
differences.
(xxix) Except for the shares of capital stock of each of the
Federal National Mortgage Association and the Federal Home
Loan Mortgage Corporation owned by the Company and its
Subsidiaries, neither the Company nor its Subsidiaries own any
shares of stock or any other equity securities of any
corporation nor has any equity interest in any firm,
partnership, association or other entity, except as described
in or contemplated by the Final Prospectus.
(xxx) The Company has filed a registration statement pursuant
to Section 12(G) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), to register the Common Stock.
(xxxi) The Shares have been duly authorized for listing on the
NASDAQ NMS, subject to official notice of issuance.
(xxxii) None of the Company, any Subsidiary or, TO THE
KNOWLEDGE OF THE COMPANY, any officer or director purporting
to act exclusively on behalf of the Company or any Subsidiary
has at any time (i) made any contributions to any candidate
for political office, or failed to disclose fully any such
contributions, in violation of law; (ii) made any payment to
any federal, state, local or foreign governmental officer or
official, or other person charged with similar public or
quasi-public duties, other than payments required or allowed
by applicable law; (iii) made any payment in violation of law
outside the ordinary course of business to any purchasing or
selling agent or person charged with similar duties of any
entity to which the Company or any Subsidiary sells or from
which the Company or any Subsidiary buys products for the
purpose of influencing such agent or person to buy products
from or sell products to the Company or any Subsidiary; or
(iv) engaged in any material transaction, maintained any
material bank account or used any material corporate funds
except for transactions, bank accounts and funds which have
been and are reflected in the normally maintained books and
records of the Company and
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its Subsidiaries, taken as a whole, and except for any of the
foregoing, the occurrence of which would not be reasonably
likely to result in a material adverse effect or the Company
as a whole.
(xxxiii) The Company and its Subsidiaries are in compliance
with Florida blue sky law relating to disclosure of issuers
doing business with Cuba. Neither the Company nor any of its
Subsidiaries is presently doing business with the government
of Cuba or with any person or affiliate located in Cuba and
will notify the Florida Department of Banking and Finance,
Division of Securities and Investor Protection, if the Company
or any such Subsidiary commences doing business with the
government of Cuba or any person or affiliate located in Cuba.
(xxxiv) The Company and its Subsidiaries are not in default in
any of the restrictive covenants set forth in the Warehouse
Credit Facility between Washtenaw Mortgage Company and
National City Bank of Kentucky (the "Credit Facility")
including, among others, that the Company and its Subsidiaries
maintain certain minimum net worth levels and a minimum debt
TO net worth ratio as defined in the Credit Facility.
(xxxv) The description of THE SECONDARY MARKET ACTIVITIES
effected by the Company and its Subsidiaries, as contained in
the Registration Statement and the Final Prospectus, is true
and complete in all material respects and to the Company's
knowledge, no event or series of events has occurred that
would result in any of the securities issued in connection
with any of such SECONDARY MARKET ACTIVITIES being downgraded
or placed on a watch list with negative implications by any
rating agency or similar organization, or that would impair
the Company's or its Subsidiaries' ability to consummate
future SECONDARY MARKET ACTIVITIES upon economic terms
consistent with past SECONDARY MARKET ACTIVITIES or otherwise
cause the Company and its Subsidiaries to suffer any material
adverse change with respect to any past or future SECONDARY
MARKET ACTIVITIES (other than any such event or series of
events described in the Final Prospectus).
(xxxvi) The description of whole loan sales effected by the
Company and its Subsidiaries, as contained in the Registration
Statement and the Final Prospectus, is true and complete in
all material respects and TO THE COMPANY'S KNOWLEDGE no event
or series of events has occurred that would result in any of
the securities issued in securitizations using such loans
being downgraded or placed on a watch list with negative
implications by any rating agency or similar organization, or
that would impair the Company's or its Subsidiaries' ability
to consummate future whole loan sales or to securitize such
loans itself upon economic terms consistent with past whole
loan sales and securitizations of such loans or otherwise
cause the Company and its Subsidiaries to suffer any material
adverse change with respect to any past or future whole loan
sale or securitization (other than any such event or series of
events described in the Final Prospectus).
(xxxvii) Except as disclosed in the Final Prospectus, there
are no costs or liabilities associated with Environmental Laws
(including, without limitation, any capital or operating
expenditures required for clean-up, closure of properties or
compliance with Environmental Laws or any permit, license or
approval, any related constraints on operating activities and
any potential liabilities to third parties) which would,
singly or in the aggregate, have a material adverse effect on
the Company and its Subsidiaries, taken as a whole.
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(xxxviii) Neither the Company nor any affiliate of the Company
has incurred any liability for a fee, commission or other
compensation on account of the employment or engagement of a
broker or finder in connection with the transactions
contemplated by this Agreement NOT DISCLOSED IN THE
REGISTRATION STATEMENT AND FINAL PROSPECTUS, OTHER THAN AS
CONTEMPLATED HEREIN.
(xxxix) There are no business relationships or related-party
transactions involving the Company or any Subsidiary or any
other person required to be described in the Final Prospectus
which have not been described as required.
b. The Selling Shareholder represents and warrants to, and agrees
with, each Underwriter that:
(i) SUCH SELLING SHAREHOLDER HAS PROVIDED THE UNDERWRITERS
WITH A WRITTEN AGREEMENT (A "LOCK-UP LETTER") THAT FOR A
PERIOD OF 180 DAYS FROM THE DATE OF THE FINAL PROSPECTUS,
OTHER THAN THE OPTIONAL SHARES, HE WILL NOT, WITHOUT THE PRIOR
WRITTEN CONSENT OF XXXXXXX X. XXXXX & CO., ON BEHALF OF THE
UNDERWRITERS, OFFER, PLEDGE, SELL, CONTRACT TO SELL, GRANT ANY
OPTION FOR THE SALE OF, OR OTHERWISE DISPOSE OF (OR ANNOUNCE
ANY OFFER, PLEDGE, SALE, GRANT OF AN OPTION TO PURCHASE OR
OTHER DISPOSITION), DIRECTLY OR INDIRECTLY, ANY SHARES OF
COMMON STOCK OR SECURITIES CONVERTIBLE INTO, OR EXERCISABLE OR
EXCHANGEABLE FOR, SHARES OF COMMON STOCK.
(ii) Such Selling Shareholder has full right, power and
authority to enter into THE LOCK-UP LETTER AND this Agreement,
the Power of Attorney and the Custody Agreement in the forms
heretofore furnished to you (the "Power of Attorney and the
Custody Agreement") and on the date hereof such Selling
Shareholder has and, at the time of delivery of the Optional
Shares to the Underwriters hereunder, such Selling Shareholder
will have full right, power and authority to sell and deliver
the Optional Shares to be sold by such Selling Shareholder to
the Underwriters, and at the date hereof such Selling
Shareholder is, and at the time of delivery of the Optional
Shares to the Underwriters such Selling Shareholder will be,
the lawful owner of and has and will have marketable title to
the Optional Shares to be sold by such Selling Shareholder
free and clear of any claims, liens, encumbrances or security
interests. Further, delivery of the Optional Shares to be sold
by such Selling Shareholder pursuant to this Agreement will
pass title to such shares free and clear of any security
interests, claims, liens, equities and other encumbrances.
(iii) The performance of THE LOCK-UP LETTER, this Agreement,
the Power of Attorney and the Custody Agreement, and the
consummation of the transactions herein and therein
contemplated, will not conflict with or result in a breach of,
or default under, any agreement, indenture or other instrument
to which such Selling Shareholder is a party or by which such
Selling Shareholder is bound, or any law, rule, administrative
regulation or court decree. THE LOCK-UP LETTER, THIS
Agreement, the Power of Attorney and the Custody Agreement
have been validly authorized, executed and delivered by such
Selling Shareholder and each constitutes a legal, valid and
binding obligation of such Selling Shareholder enforceable
against such Selling Shareholder in accordance with its terms.
(iv) No consent, approval, authorization, order or declaration
of or from, or registration, qualification or filing with, any
court or governmental agency or body is required for the sale
of the Shares to be sold by such Selling Shareholder or the
consummation of the transactions
10
contemplated by THE LOCK-UP LETTER, this Agreement, the Power
of Attorney or the Custody Agreement, except the registration
of Shares under the Act (which, if the Registration Statement
is not effective as of the time of execution hereof, shall be
obtained as provided in this Agreement) and such as may be
required under state securities or blue sky laws in connection
with the offer, sale and distribution of such Shares by the
Underwriters.
(v) When the Registration Statement becomes effective and at
all times subsequent thereto, the Registration Statement, any
post-effective amendment thereto and the Final PROSPECTUS as
amended and supplemented, did not and will not contain any
untrue statement of a material fact regarding such Selling
Shareholder or omit to state a material fact regarding such
Selling Shareholder required to be stated therein or necessary
in order to make the statements therein not misleading, and
such Selling Shareholder is, and shall be, unaware of any
untrue statement of a material fact in such documents or the
omission from such documents of any material fact required to
be stated therein or necessary to make the statements therein
not misleading.
(vi) Certificates in negotiable form representing all of the
Optional Shares to be sold by such Selling Shareholder have
been placed in custody under the Power of Attorney and the
Custody Agreement duly executed and delivered by such Selling
Shareholder to and appointing, ____________________________,
as custodian (the "Custodian"), with authority to deliver and
receive payment for the Optional Shares to be sold by such
Selling Shareholder hereunder, and appointing
____________________ and _______________________, or either of
them, as the Selling Shareholder's attorney-in-fact (the
"Attorney-in-Fact") with authority to execute and delivery
this Agreement and any other documents necessary or desirable
in connection with the transactions contemplated hereby on
behalf of such Selling Shareholder, and otherwise to act on
behalf of such Selling Shareholder and take all actions that
may be necessary or desirable in connection with the
transactions contemplated by this Agreement, the Power of
Attorney and the Custody Agreement.
(vii) The Optional Shares represented by the certificates held
in custody for such Selling Shareholder under the Power of
Attorney and the Custody Agreement are subject to the
interests of the Underwriters hereunder, and the arrangements
made by such Selling Shareholder for such custody, as well as
the appointment by such Selling Shareholder of the
Attorney-in-Fact, are, to that extent, irrevocable. The
Selling Shareholder specifically agrees that the obligations
of the Selling Shareholder hereunder shall not be terminated
by operation of law, whether by the death or incapacity of
such Selling Shareholder or by the occurrence of any other
event. If the Selling Shareholder should die or become
incapacitated, or if any other similar event should occur
before the delivery of the Optional Shares hereunder,
certificates representing such Shares shall be delivered by or
on behalf of such Selling Shareholder in accordance with the
terms and conditions of this Agreement and of the Power of
Attorney and the Custody Agreement, and the actions taken by
the Attorney-in-Fact pursuant to the Power of Attorney and the
Custody Agreement shall be as valid as if such death,
incapacity or other event had not occurred, whether or not the
Custodian or the Attorney-in-Fact shall have received notice
of such death, incapacity or other event.
(viii) In order to document the Underwriters' compliance with
the reporting withholding provisions of the Internal Revenue
Code of 1986, as amended, with respect to the transactions
herein contemplated, the Selling Stockholder agrees to deliver
to you prior to or on the Optional Closing Date (as
hereinafter defined), a properly completed and executed United
States Treasury
11
Department Form W-8 or W-9 (or other applicable form of
statement specified by Treasury Department regulations in lieu
thereof).
2. PURCHASE AND SALE OF SHARES. Subject to the terms and conditions
herein set forth, (i) the Company agrees to sell to the Underwriters that number
of Firm Shares set forth opposite the name of the Company in Schedule II annexed
hereto, and (ii) each of the Underwriters agrees, severally and not jointly, to
purchase from the Company, at a purchase price of $_____ per share, the number
of Firm Shares set forth opposite the name of each Underwriter on Schedule I
annexed hereto.
The Selling Shareholder hereby grants to the Underwriters the right to
purchase at their election in whole or in part up to 180,000 Optional Shares at
the purchase price per share set forth in clause (i) in the paragraph above for
the sole purpose of covering over-allotments in the sale of Firm Shares. If the
option granted hereby is exercised in whole or in part, then the respective
number of Optional Shares to be purchased by each of the Underwriters shall be
determined by multiplying the total number of Optional Shares as to which such
election shall have been exercised by the Underwriters by a fraction, the
numerator of which is the maximum number of Optional Shares such Underwriter is
entitled to purchase as set forth opposite the name of such Underwriter in
Schedule I hereto and the denominator of which is the maximum number of Optional
Shares that all Underwriters are entitled to purchase hereunder (with the
resulting number to be adjusted by the Underwriters so as to eliminate
fractional shares). Any such election to purchase Optional Shares may be
exercised by written notice from the Underwriters to the Selling Shareholder,
given within a period of 30 calendar days after the date of this Agreement and
setting forth the aggregate number of Optional Shares to be purchased and the
date on which such Optional Shares are to be delivered, as determined by the
Underwriters but in no event earlier than the First Time of Delivery or, unless
the Underwriters and the Company otherwise agree, to furnish or cause to be
furnished to the Underwriters the certificates, letters and opinions, and to
satisfy all conditions, set forth in Section 6 hereof at the Subsequent Time of
Delivery.
After the Registration Statement becomes effective, the several
Underwriters intend to offer the Shares to the public as set forth in the
Prospectus.
3. DELIVERY OF SHARES; CLOSING. Certificates in definitive form for the
Shares to be purchased by each Underwriter hereunder, and in such denominations
and registered in such names as Xxxxxxx X. Xxxxx & Co. may request upon at least
48 hours prior notice to the Company, shall be delivered by or on behalf of the
Company to the Underwriters for the account of such Underwriter, against payment
by such Underwriter on its behalf as provided herein. Payment shall be made with
respect to the purchase price for the Firm Shares, to the Company, by wire
transfer or official bank check or checks payable to the order of the Company,
in next day available funds against delivery of the certificates for the Firm
Shares. The closing of the sale and purchase of the Shares shall be held at the
offices of Xxxxxxx X. Xxxxx & Co., 000 0xx Xxxxxx Xxxxx, Xxxxx 000, Xx.
Xxxxxxxxxx, Xxxxxxx 00000, (the "REPRESENTATIVE'S OFFICE"), or at such location
in Tampa, Florida as the Representatives may designate, except that physical
delivery of certificates for the Shares shall be made at the direction of the
Underwriters either at the Representative's Office or at the office of
________________, ___________________ (the "_________ OFFICE"), or shall be made
to The Depository Trust Company ("DTC"), 00 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000, for the account of the Underwriters or for such other accounts as the
Underwriters shall specify to DTC. The time and date of such delivery and
payment shall be, with respect to the Firm Shares, at 10:00 a.m., Eastern time,
on the third full business day after this Agreement is executed or at such other
time and date as the Underwriters and the Company may agree upon in writing ,
and, with respect to the Optional Shares, 10:00 a.m., Eastern time, on the date
specified by the Underwriters in the written notice given by the Underwriters of
the Underwriters' election to purchase all or part of such Optional Shares, or
at such other time and date as the Underwriters, and the Attorney-in-Fact,
pursuant to the Power of
12
Attorney and Custody Agreement with the Selling Shareholder, on behalf of the
Selling Shareholder, may agree upon in writing. Such time and date for delivery
of the Firm Shares is herein called the "FIRST Time of Delivery," and such time
and date for delivery of any Optional Shares, if not the First Time of Delivery,
is herein called a "SUBSEQUENT Time of Delivery," and each such time and date
for delivery of any Optional Shares, if not the First Time of Delivery, is
herein called a "SUBSEQUENT Time of Delivery," and each such time and date for
delivery is herein called a "TIME of Delivery." The Company will make
certificates for the Shares available for checking and packaging at least 24
hours prior to each Time of Delivery at the ___________ Office or the office of
DTC in New York, New York or at such other location in New York, New York
specified by the Underwriters in writing at least 48 hours prior to such Time of
Delivery.
4. COVENANTS.
a. The Company covenants and agrees with the several Underwriters
that:
(i) The Company will use its best efforts to cause the
Registration Statement and any amendment thereto, if not
effective at the time and date that this Agreement is executed
and delivered by the parties hereto, to become effective. If
the Registration Statement has become or becomes effective
pursuant to Rule 430A of the Rules and Regulations, or the
filing of the Final Prospectus is otherwise required under
Rule 424(b) of the Rules and Regulations, the Company will
file the Final Prospectus, properly completed, pursuant to the
applicable paragraph of Rule 424(b) of the Rules and
Regulations within the time period prescribed and will provide
evidence satisfactory to you of such timely filing; the
Company will notify you, promptly after it shall receive
notice thereof, of the time when the Registration Statement or
any post-effective amendment to the Registration Statement has
become effective or any amendment or supplement to the Final
Prospectus has been filed.
(ii) The Company will notify you promptly of any request by
the Commission to amend or supplement the Registration
Statement or Final Prospectus or for additional information;
promptly upon your request, the Company will prepare and file
with the Commission amendments or supplements to the
Registration Statement or Final Prospectus which, in the
reasonable opinion of, Schifino & Xxxxxxxxx, P.A., counsel for
the several Underwriters, may be necessary or advisable in
connection with the distribution of Shares by the
Underwriters; the Company will fully and completely comply
with the provisions of Rule 430A of the Rules and Regulations
with respect to information omitted from the Registration
Statement in reliance upon such Rule; the Company will
promptly prepare and file with the Commission, and promptly
notify you of the filing of, any amendment or supplement to
the Registration Statement or Final Prospectus that may be
necessary to correct any statements or omissions if, at any
time a prospectus relating to the Shares is required to be
delivered under the Act, any event shall have occurred as a
result of which the Final Prospectus would include an untrue
statement of a material fact or omit to state any material
fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading; in
case any Underwriter is required to deliver a prospectus
within the nine-month period referred to in Section 10(a)(3)
of the Act in connection with the sale of the Shares, the
Company will prepare promptly upon request of such
Underwriters, at the expense of the Company, such amendment or
amendments to the Registration Statement and the Final
Prospectus as may be necessary to permit compliance with the
requirements of Section 10(a)(3) of the Act, and it will file
no amendment or supplement to the Registration Statement or
the Final Prospectus that shall not previously have been
submitted to you a REASONABLE time prior to the proposed
filing thereof
13
or to which you shall reasonably object in writing, subject,
however, to compliance with the Act and the Rules and
Regulations thereunder and the provisions of this Agreement.
(iii) The Company will advise you, promptly after it shall
receive notice or obtain knowledge thereof, of the issuance of
any stop order by the Commission suspending the effectiveness
of the Registrations Statement or of the initiation or threat
of any proceeding for that purpose; and the Company shall
promptly use its best efforts to prevent the issuance of any
stop order or to obtain its withdrawal at the earliest
possible moment if such a stop order should be issued.
(iv) The Company will use its best efforts to qualify the
Shares for offering and sale under the securities laws of such
jurisdictions as you may designate and to continue such
qualifications in effect for so long as may be required for
purposes of the distribution of the Shares, except that the
Company shall not be required in connection therewith or as a
condition thereof to qualify as a foreign corporation or to
execute a general consent to service of process in any
jurisdiction or to make any undertaking with respect to the
conduct of its business. In each jurisdiction in which the
shares have qualified as above provided, the Company will make
and file such statements and reports in each year as are or
may be reasonable required by the laws of such jurisdiction.
(v) The Company HAS FURNISHED TO YOU ALL REGISTRATION
STATEMENTS FILED WITH THE COMMISSION PRIOR TO THE DATE HEREOF
AND will furnish to you, as soon as available, THREE copies of
the Registration Statement (INCLUDING all exhibits), each
Preliminary Prospectus or the Final Prospectus and any
amendments or supplements to such documents, including any
prospectus prepared to permit compliance with Section 10(a)(3)
of the Act, all in such quantities as you may from time to
time reasonably request.
(vi) The Company will make generally available to its security
holders as soon as practicable, but in any event not later
than the 45th day following the end of the fiscal quarter
first occurring after the first anniversary of the "effective
date of the Registration Statement" (as defined in Rule 158(c)
of the Rules and Regulations), an earnings statement (which
will be in reasonable detail but need not be audited)
complying with the provisions of Section 11(a) of the Act and
covering a twelve-month period beginning after the effective
date of the Registration Statement.
(vii) During a period of five years after the date hereof IF
REQUIRED BY LAW OR THE APPLICABLE RULES OF THE COMMISSION, ANY
SECURITIES EXCHANGE OR THE NATIONAL ASSOCIATION OF SECURITIES
DEALERS INC. (THE "NASD"), the Company will furnish to its
stockholders, as soon as practicable after the end of each
respective period, annual reports (including financial
statements audited by independent public accountants) and
unaudited quarterly reports of operations for each of the
first three quarters of the fiscal year, and will furnish to
you and the other several Underwriters hereunder, upon
request, (i) concurrently, IF REQUIRED (WHEN AVAILABLE IF
NOT), with furnishing such reports to its stockholders,
statements of operations of the Company for each of the first
three quarters in the form furnished TO the Company's
stockholders; (ii) concurrently with furnishing to its
stockholders, AN ANNUAL REPORT; (iii) as soon as they are
available, copies of all OTHER reports (financial or other)
mailed to THE COMPANY'S STOCKHOLDERS; (iv) as soon as they are
available, copies of all reports and financial statements
furnished to or filed with the Commission, any securities
exchange or the NASD; (v) every
14
material press release in respect of the Company or its
affairs which was released or prepared by the Company; and
(vi) any additional information of a public nature concerning
the Company or its business that you may reasonably request.
During such five-year period, if the Company shall have active
Subsidiaries, the foregoing financial statements shall be on a
consolidated basis to the extent that the accounts of the
Company and its Subsidiaries are consolidated, and shall be
accompanied by similar financial statements for any
significant Subsidiaries that is not so consolidated.
(viii) The Company shall not, during the 180 days following
the date on which the Shares are first released by you for
sale to the public, except with the prior written consent of
Xxxxxxx X. Xxxxx & Co., offer for sale, sell, distribute or
otherwise dispose of any shares of Common Stock, or sell or
grant options, rights or warrants with respect to any shares
of Common Stock (other than the grant of options pursuant to
option plans existing on the date hereof or the issuance
Common Stock upon exercise of outstanding options or
Warrants), or any securities convertible or exchangeable into
Common Stock, except for securities issued in connection with
an acquisition.
(ix) The Company will apply the net proceeds from the sale of
the Shares being sold by it in the manner set forth under the
caption "Use of Proceeds" in the Final Prospectus.
b. The Selling Shareholder covenants and agrees with the several
Underwriters that:
(i) Such Selling Shareholder will not (i) take, directly or
indirectly, prior to the termination of the underwriting
syndicate contemplated by this Agreement, any action designed
to cause or to result in, or that might reasonably be expected
to constitute, the stabilization or manipulation of the price
of any security of the Company to facilitate the sale or
resale of any of the Shares, (ii) sell, bid for, purchase or
pay anyone any compensation for soliciting purchases of, the
Shares or (iii) pay to or agree to pay any person any
compensation for soliciting another to purchase any other
securities of the Company.
(ii) In order to document the Underwriters' compliance with
the reporting and withholding provisions of the Internal
Revenue Code of 1986, as amended, with respect to the
transactions herein contemplated, the Selling Shareholder
agrees to deliver to the Underwriters prior to or at the First
Time of Delivery a properly completed and executed United
States Treasury Department Form W-9 (or other applicable form
or statement specified by Treasury Department regulations in
lieu thereof).
5. EXPENSES.
a. The Company will pay and bear all costs and expenses in connection
with (i) the preparation, printing and filing of the Registration
Statement (including financial statements and exhibits), Preliminary
Prospectuses, Final Prospectus and any amendments or supplements
thereto; (ii) the printing of this Agreement, the Blue Sky Memoranda
and any instruments related to any of the foregoing, issuance and
delivery of the Shares hereunder to the several Underwriters, including
taxes and the cost of all stock certificates representing the Shares;
fees and charges of the Transfer Agent; fees and disbursements of
counsel for the Company and Selling Shareholder; (iii) all fees and
other charges of the Company's independent public accountants; (iv) the
cost of furnishing to the several Underwriters copies of the
Registration Statement (including appropriate exhibits), Preliminary
Prospectuses, Final
15
Prospectus and any amendments or supplements to any of the foregoing;
(v) NASD filing fees and the cost of qualifying the Shares under the
laws of the jurisdictions as you may reasonably designate; (vi) the
costs and expenses of the Company relating to investor presentations on
any "ROAD show" undertaken in connection with marketing the offering of
the Shares, including, without limitation, travel and lodging expenses
of the Representatives and officers of the Company (LIMITED WITH
RESPECT TO THE REPRESENTATIVES TO THE EXTENT SET FORTH IN SUBPARAGRAPH
5(B) BELOW); and (vii) other expenses directly incurred by the Company
in connection with the performance of its obligations hereunder.
b. If the transactions contemplated hereby are not consummated by
reason of any refusal or inability on the part of the Company or
Selling Shareholder, to perform any agreement on their respective parts
to be performed hereunder or to fulfill any condition of the
Underwriters' obligations hereunder, of if the Company shall terminate
the Agreement under Section 10(a) hereof, the Company will reimburse
the several Underwriters for all REASONABLE out-of-pocket expenses
(including any and all REASONABLE fees and disbursements of
Underwriters' Counsel) up to $75,000 incurred by the Underwriters in
preparing to market or marketing the Shares.
6. CONDITIONS OF UNDERWRITERS' OBLIGATIONS
The obligations of the several Underwriters to purchase and pay for the
Shares as provided herein, shall be subject to the MATERIAL accuracy, as of the
date hereof and the Closing Date and any later date on which Optional Shares are
to be purchased, as the case may be, of the representations and warranties of
the Company and Selling Shareholder herein, to the performance by the Company of
its obligations hereunder and to the following additional conditions:
a. The Registration Statement shall have become effective; if the
filing of the Final Prospectus, or any supplement thereto, is required
pursuant to Rule 424(b) of the Rules and Regulations, the Final
Prospectus shall have been filed in the manner and within the time
period required by Rule 424(b) of the Rules and Regulations; and no
stop order suspending the effectiveness thereof shall have been issued
and no proceeding for that purpose shall have been initiated 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 Final
Prospectus or otherwise) shall have been complied with to the
satisfaction of Underwriters' Counsel.
b. All corporate proceedings and other legal matters in connection with
this Agreement, the form of Registration Statement, all Preliminary
Prospectuses, the Final Prospectus, and the registration,
authorization, issue, sale and delivery of the Shares shall have been
satisfactory to Underwriters' Counsel and such counsel shall have been
furnished with such papers and information as they may reasonably have
requested to enable them to pass upon the matters referred to in this
subsection.
c. You shall have received on the Closing Date and any later date on
which Option Shares are purchased, as the case may be, the following
opinions of opinions, certificates and letters, dated the Closing Date
or such later date, addressed to the Underwriters and with reproduced
copies or signed counterparts thereof for each of the Underwriters:
(i) the opinion of Manatt, Xxxxxx & Xxxxxxxx, LLP,
counsel for the Company to the effect that:
16
(a) Each of the Company and its Subsidiaries IS A
CORPORATION validly existing AND in good standing
under the CORPORATE laws of its jurisdiction of
organization;
(b) Each of the Company and its Subsidiaries have the
CORPORATE power and CORPORATE authority (corporate
and other) to own, lease and operate its properties
and conduct its business as described in the Final
Prospectus and each of the Company and its
Subsidiaries are qualified to do business as a
foreign corporation in good standing in all
jurisdictions, if any, where the ownership or leasing
of properties or the conduct of its business requires
such qualification, except where a failure to qualify
would not have a material adverse effect upon the
condition, financial or otherwise, of the Company and
the Subsidiaries taken as a whole.
(c) The authorized, issued and outstanding capital
stock of the Company is as set forth in the Final
Prospectus under the caption "Capitalization" as of
the date stated therein; and the issued and
outstanding shares of capital stock of the Company
have been LEGALLY issued, are fully-paid and
NON-ASSESSABLE, and were not issued in violation of
any preemptive right or, to such counsel's knowledge,
other rights to purchase such shares;
(d) The Shares are validly authorized, and when
issued, paid for and delivered in accordance with the
provisions of this Agreement, will be validly issued,
fully paid and non-assessable, without any personal
liability attaching to the ownership thereof, and
will not be issued in violation of any preemptive
rights to shareholders;
(e) The Company has filed all documents and has
satisfied all conditions that the staff of The NASDAQ
NMS has advised the Company are required to be filed
or satisfied by the Company in connection with the
listing of the Common Stock ON The NASDAQ NMS;
(f) The specimen stock certificate of the Company
filed as an exhibit to the Registration Statement is
in due and proper form to evidence shares of Common
Stock, has been duly authorized and approved by the
Board of Directors of the Company and complies with
all legal requirements applicable under the Delaware
General Corporation Law; and the description of the
Company's stock option and other stock plans or
arrangements, and the options or other rights granted
and executed thereunder, as set forth in the Final
Prospectus accurately and firmly present the
information required to be shown with respect to such
plans, arrangements, options and rights.
(g) All of the issued shares of capital stock of each
Subsidiary of the Company have been duly and validly
authorized and issued, are fully paid and
nonassessable. The Company owns one hundred percent
(100%) of the issued and outstanding capital stock of
(i) Wastenaw Mortgage Company, a MICHIGAN corporation
and (ii) Pelican National Bank, a national bank;
17
(h) This Agreement has been duly authorized by all
necessary corporate action on the part of the Company
and duly executed and delivered by AN AUTHORIZED
REPRESENTATIVE OF the Company and, assuming due
authorization, execution and delivery by you, is a
valid and binding agreement of the Company
enforceable against the Company in accordance with
its terms, except insofar as the enforceability of
indemnification and contribution provisions may be
limited by applicable law or equitable principles,
and except as enforceability may be limited by
bankruptcy, reorganization, moratorium or similar
laws affecting the enforceability of creditors'
rights generally and rules of law governing
performance, injunctive relief and other equitable
remedies;
(i) The Registration Statement has become effective
under the Act and, to counsel's knowledge, no stop
order suspending the effectiveness of the
Registration Statement has been issued and no
proceedings for that purpose have been instituted and
are pending or contemplated under the Act; any
required filing of the Final Prospectus and any
supplement thereto pursuant to Rule 424(b) of the
Rules and Regulations have been made in the manner
and within the time period required by such Rule
424(b);
(j) The Registration Statement and the Final
Prospectus, and each amendment or supplement thereto
(other than the financial statements, financial data
and supplemental schedules included therein, as to
which such counsel need express no opinion), complies
as to form in all material respects with the
requirements of the Act and the applicable Rules and
Regulations;
(k) The terms and provisions of the capital stock of
the Company conform in all material respects to the
description thereof contained in the Registration
Statement and the Final Prospectus, and the
information in the Final Prospectus under the caption
"Description of Capital Stock."
(L) TO SUCH COUNSEL'S KNOWLEDGE, THE performance of
this Agreement and the consummation of the
transactions herein contemplated will not result in a
breach or violation of any of the terms and
provisions, or constitute a default under, any
indenture, mortgage, deed of trust, loan agreement,
bond, debenture, note agreement or other evidence of
indebtedness, or any lease, contract or other
agreement or instrument to which the Company is a
party or by which its properties are bound and which
breach or violation would have a material adverse
effect upon the condition, financial or otherwise, of
the Company; the Company's Certificate of
Incorporation or By-laws; or, any statute, rule or
regulation or, to such counsel's knowledge , any
order, writ or decree of any court or governmental
agency or body having jurisdiction over the Company
or over any of its properties or operations;
(m) No authorization, approval or consent of any
governmental authority or agency is necessary in
connection with the consummation of the transactions
herein contemplated except such as have been obtained
under the Act or such as may be required under state
or other securities or Blue Sky laws in connection
with the purchase and distribution of the Shares by
the Underwriters;
18
(n) To such counsel's knowledge , there are no legal
or governmental proceedings pending or threatened of
a character that are required to be disclosed in the
Registration Statement, by the Act or the applicable
Rules and Regulations;
(o) To such counsel's knowledge , the Company is not
presently in breach of, or in default under any
indenture, mortgage, deed of trust, loan agreement,
bond, debenture, note agreement or other evidence of
indebtedness or any other agreement or instrument
which would have a material adverse effect on the
Company's financial condition OR to which the Company
is a party or by which any of its properties is
bound;
(p) To such counsel's knowledge , except as described
in the Prospectus, no person, corporation, trust,
partnership, association or other entity has the
right to include and/or register any securities of
the Company in the Registration Statement, require
the Company to file any registration statement or, if
filed, to include any security in such registration
statement;
(q) The descriptions of whole loan sales effected by
the Company, as contained in the Registration
Statement and the Final Prospectus, are true and
complete in all material respects and no event or
series of events has occurred that would result in
any of the securities issued in securitizations using
such loans being downgraded or placed on a watch list
with negative implications by any rating agency or
similar organization, or that would impair the
Company's or its Subsidiaries' ability to consummate
future whole loan sales or to securitize such loans
itself upon economic terms consistent with past whole
loan sales and securitizations of such loans or
otherwise cause the Company and its Subsidiaries to
suffer any material adverse change with respect to
any past or future whole loan sale or securitization
(other than any such event or series of events
described in the Final Prospectus).
(r) TO SUCH COUNSEL'S KNOWLEDGE, THE DESCRIPTION OF
THE SECONDARY MARKET ACTIVITIES effected by the
Company, as SET FORTH in the Registration Statement
and the Final Prospectus, is true and complete in all
material respects and to SUCH COUNSEL'S knowledge, no
event or series of events has occurred that would
result in any of the securities issued in connection
with any of such SECONDARY MARKET ACTIVITIES being
downgraded or placed on a watch list with negative
implications by any rating agency or similar
organization, or that would impair the Company's or
its Subsidiaries' ability to consummate future
SECONDARY MARKET ACTIVITIES upon economic terms
consistent with past SECONDARY MARKET ACTIVITIES or
otherwise cause the Company and its Subsidiaries to
suffer any material adverse effect with respect to
any past or future SECONDARY MARKET ACTIVITIES (other
than any such event or series of events described in
the Final Prospectus).
(s) No Default or Event of Default (as defined in the
Credit Facility) has occurred and, to such counsel's
knowledge, there is no event which, with the giving
of notice or the passage of time or both, would give
rise to such an event.
19
(t) The Company is not, after receiving the proceeds
from the sale of the Company Shares, an "investment
company" within the meaning of the 1940 Act.
(u) The statements in the Prospectus under THE
CAPTIONS ENTITLED "BUSINESS," "REGULATION,"
"MANAGEMENT," "DESCRIPTION OF CAPITAL STOCK,"
"RESTRICTIONS ON ACQUISITION OF THE COMPANY," AND
"SELLING STOCKHOLDER" have been reviewed by such
counsel, and insofar as they refer to statements of
law, descriptions of statutes, licenses, rules or
regulations or legal conclusions, are correct in all
material respects;
(v) Based upon the description of the Company's
business in the Final Prospectus, each of the Company
and its Subsidiaries hold all MATERIAL licenses,
certificates, permits and approvals from all state,
Federal and other regulatory authorities that are
required for the Company to lawfully own, lease and
operate its properties and conduct its business as
described in the Final Prospectus, and TO SUCH
COUNSEL'S KNOWLEDGE, each of the Company and its
Subsidiaries are conducting its business in
compliance with all of the MATERIAL laws, rules and
regulations of each jurisdiction in which it conducts
its business.
(w) To such counsel's knowledge, there are no
agreements, contracts or other documents required by
the Act to be described in the Registration Statement
and the Final Prospectus and filed as exhibits to the
Registration Statement other than those described in
the Registration Statement (or required to be filed
under the Exchange Act if upon such filing they would
be incorporated, in whole or in part, by reference
therein) and TO SUCH COUNSEL'S KNOWLEDGE the exhibits
which have been filed are correct copies of the
documents of which they purport to be copies.
(x) Except as described in the Final Prospectus, to
such counsel's knowledge, the Company does not (i)
maintain, sponsor or contribute to any ERISA Plans,
(ii) maintain or contribute, now or at any time
previously, to a defined benefit plan, as defined in
Section 3(35) of ERISA, and (iii) has never
completely or partially withdrawn from a
"MULTIEMPLOYER PLAN."
IN RENDERING SUCH OPINIONS, such counsel may rely (i) as to matters
involving the application of laws other than the laws of the United States and
jurisdictions in which they are admitted, to the extent such counsel deems
proper and to the extent specified in such opinion, if at all, upon an opinion
or opinions (in form and substance satisfactory to Underwriters' Counsel) of
other counsel acceptable to Underwriters' Counsel, familiar with the applicable
laws; (ii) as to matters of fact, to the extent they deem proper, on
certificates and written statements of responsible officers of the Company, and
certificates or other written statements of officers of departments of various
jurisdictions having custody of documents respecting the corporate existence or
good standing of the Company, provided that copies of any such statements or
certificates shall be delivered to Underwriters' Counsel if requested. The
opinion of such counsel for the Company shall state that the opinion of any such
other counsel is in form satisfactory to such counsel and that the
Representatives and they are justified in relying thereon. Such opinion shall
also state that the Underwriters' Counsel is entitled to rely thereon.
IN ADDITION, SUCH COUNSEL SHALL PROVIDE A LETTER ADDRESSED TO THE
UNDERWRITERS STATING THAT ALTHOUGH SUCH COUNSEL HAS NOT VERIFIED THE ACCURACY OR
COMPLETENESS OF THE STATEMENTS CONTAINED IN THE REGISTRATION STATEMENT OR THE
FINAL PROSPECTUS, NOTHING HAS COME TO THE ATTENTION OF SUCH COUNSEL THAT
20
CAUSED SUCH COUNSEL TO BELIEVE THAT, (A) AT THE TIME THE REGISTRATION STATEMENT
BECAME EFFECTIVE, THE REGISTRATION STATEMENT (EXCEPT AS TO FINANCIAL STATEMENTS,
FINANCIAL DATA AND SUPPORTING SCHEDULES CONTAINED THEREIN, WHICH NEED NOT BE
ADDRESSED BY SUCH COUNSEL) CONTAINED ANY UNTRUE STATEMENT OF A MATERIAL FACT OR
OMITTED TO STATE A MATERIAL FACT REQUIRED TO BE STATED THEREIN OR NECESSARY TO
MAKE THE STATEMENTS THEREIN NOT MISLEADING, OR (B) AT THE CLOSING DATE OR ANY
LATER DATE ON WHICH THE OPTIONAL SHARES ARE TO BE PURCHASED, AS THE CASE MAY BE,
THE REGISTRATION STATEMENT OR THE FINAL PROSPECTUS (EXCEPT AS AFORESAID)
CONTAINED ANY UNTRUE STATEMENT OF A MATERIAL FACT OR OMITTED TO STATE A MATERIAL
FACT REQUIRED TO BE STATED THEREIN OR NECESSARY TO MAKE THE STATEMENTS THEREIN,
IN LIGHT OF THE CIRCUMSTANCES UNDER WHICH THEY WERE MADE, NOT MISLEADING.
(ii) The counsel for the Selling Shareholder shall have
furnished to you their written opinion with respect to the Selling
Shareholder for whom they are acting as counsel, dated the Closing
Date, in form substance satisfactory to you, to the effect that:
(a) This Agreement has been duly executed and
delivered by such Selling Shareholder.
(b) A Power of Attorney and Custody Agreement have
been duly authorized, executed and delivered by or on
behalf of the Selling Shareholder.
(c) The performance of this Agreement, the Power of
Attorney and the Custody Agreement and the
consummation of the transactions herein contemplated
will not result in a breach or violation of any of
the terms and provisions, or constitute a default
under, any indenture mortgage, deed of trust, loan
agreement, bond, debenture, note agreement or other
evidence of indebtedness, or any lease, contract or
other agreement or instrument known to such counsel
to which THE Selling Shareholder is a party or by
which its properties are bound or to such counsel's
knowledge, any order, writ or decree of any court or
governmental agency or body having jurisdiction over
Selling Shareholder or over any of his properties;
(d) The Underwriters are acquiring the Optional
Shares free of any adverse claim (except for any
restrictions on transfer that may be imposed by law
pursuant to federal or state securities laws and
except for claims created by or through the
Underwriters). The Selling Shareholder has the full
right, power and authority to sell, assign, transfer
and deliver the Optional Shares.
In rendering these opinions, such counsel may rely upon a
certificate of the Selling Shareholder as to matters of fact. The
opinions rendered by such counsel may contain normal assumptions,
qualifications and limitations with respect to the matters set forth
therein.
(iii) You shall have received from Underwriters' Counsel an
opinion or opinions, dated the Closing Date, in form and
substances satisfactory to you, with respect to the
sufficiency of all such corporate proceedings and other legal
matters relating to this Agreement and the transactions
contemplated hereby as you may reasonably require, and the
Company shall have furnished to such counsel such documents as
it may have requested for the purpose of enabling it to pass
upon such matters.
21
(iv) At the time this Agreement is executed, the Underwriters
shall have received a letter, dated such date, addressed to
the Underwriters in form and substance satisfactory in all
respects to the Underwriters and the Underwriters' Counsel,
from XXXXX XXXXXX & COMPANY, LLP;
(a) confirming that they are independent certified
public accountants with respect to the Company within
the meaning of the Act and the applicable Rules and
Regulations;
(b) stating that it is their opinion that the
financial statements and supporting schedules of the
Company included in the Registration Statement comply
as to form in all material respects with the
applicable accounting requirements of the Act and the
Rules and Regulations thereunder and that the
Representatives may rely upon the opinion of Xxxxx
Xxxxxx & Company, LLP with respect to such financial
statements and supporting schedules included in the
Registration Statement;
(c) stating that, on the basis of a limited review
which included a reading of the latest available
unaudited interim financial statements of the
Company, a reading of the latest available minutes of
the stockholders and board of directors and the
various committees of the boards of directors of the
Company, consultations with officers and other
employees of the Company responsible for financial
and accounting matters , nothing has come to their
attention which would lead them to believe that (i)
the pro forma financial information contained in the
Registration Statement and Prospectus does not comply
as to form in all material respects with the
applicable accounting requirements of the Act and the
Rules and Regulations or is not fairly presented in
conformity with generally accepted accounting
principles applied on a basis consistent with that of
the audited financial statements of the Company, (ii)
the unaudited financial statements and supporting
schedules of the Company included in the Registration
Statement do not comply as to form in all material
respects with the applicable accounting requirements
of the Act and the Rules and Regulations or are not
fairly presented in conformity with generally
accepted accounting principles applied on a basis
substantially consistent with that of the audited
financial statements of the Company included in the
Registration Statement, or (iii) at a specified date
not more than five (5) days prior to the effective
date of the Registration Statement, OR THE MOST
RECENT MONTH END, there has been any change in the
capital stock of the Company, any change in the
long-term debt of the Company or any decrease in the
stockholders' equity of the Company or any decrease
in the net current assets or net assets of the
Company as compared with amounts shown in the March
31, 1999 balance sheet included in the Registration
Statement other than as set forth in or contemplated
by the Registration Statement, OR THE MOST RECENT
MONTH ENDED, or, if there was any change or decrease,
setting forth the amount of such change or decrease,
and (iv) during the period from March 31, 1999 to a
specified date not more than five (5) days prior to
the effective date of the Registration Statement,
there was any decrease in net revenues or net
earnings of the Company or DECREASE in net earnings
per common share of the Company, in each case as
compared with the corresponding period beginning
March 31, 1998, other than as set forth in or
contemplated by the Registration Statement, or, if
there was any such decrease, setting forth the amount
of such decrease;
22
(d) setting forth, at a date not later than five (5)
days prior to the date of the Registration Statement,
OR THE MOST RECENT MONTH ENDED, the amount of
liabilities of the Company (including a break-down of
non-interest bearing and interest bearing deposits,
warehouse line of credit, notes payable and
repurchase agreement);
(e) stating that they have compared specific dollar
amounts, numbers of shares, percentages of revenues
and earnings, statements and other financial
information pertaining to the Company set forth in
the Prospectus in each case to the extent that such
amounts, numbers, percentages, statements and
information may be derived from the general
accounting records, including work sheets, of the
Company and excluding any questions requiring an
interpretation by legal counsel, with the results
obtained from the application of specified readings,
inquiries and other appropriate procedures (which
procedures do not constitute an examination in
accordance with generally accepted auditing
standards) set forth in the letter and found them to
be in agreement; and
(f) statements as to such other matters incident to
the transaction contemplated hereby as the
Representative may request.
(v) At the Time of Delivery, if any, the Underwriters shall
have received from Xxxxx Xxxxxx & Company, LLP a letter, dated
as of the Time of Delivery, as the case may be, to the effect
that they reaffirm the statements made in the letter furnished
pursuant to subsection (IV) of this Section hereof except that
the specified date referred to shall be a date not more than
five days prior to the respective Times of Delivery, if any,
and, if the Company has elected to rely on Rule 430A of the
Rules and Regulations, to the further effect that they have
carried out procedures as specified in clause (IV) of
subsection (i) of this Section with respect to certain
amounts, percentages and financial information as specified by
the Representatives and deemed to be a part of the
Registration Statement pursuant to Rule 430A(b) and have found
such amounts, percentages and financial information to be in
agreement with the records specified in such clause (IV).
(vi) You shall have received on the Closing Date and on any
later date on which Optional Shares are purchased, as the case
may be, a certificate of the Company, dated the Closing Date
or such later date, signed by the President and Chief
Financial Officer of the Company, to the effect that, and you
shall be satisfied that:
(a) The representations and warranties of the Company
in this Agreement are true and correct, as if made on
and as of the Closing Date or any later date on which
Optional Shares are to be purchased; and the Company
has complied with all the agreements and satisfied
all the conditions on its part to be performed or
satisfied at or prior to the Closing Date or any
later date on which Optional Shares are to be
purchased;
(b) To the best of their knowledge, no stop order
suspending the effectiveness of the Registration
Statement has been issued, and no proceedings for
that purpose have been instituted or are pending or
threatened under the Act;
23
(c) When the Registration Statement became effective
and at all times subsequent thereto up to the
delivery of such certificate, the Registration
Statement and the Final Prospectus and any amendments
or supplements thereto contained all statements and
information required to be included therein or
necessary to make the statements therein in light of
the circumstances under which they were made, not
misleading and neither the Registration Statement nor
the Final Prospectus nor any amendment or supplement
thereto included any untrue statement of a material
fact or omitted to state any material fact required
to be stated therein or necessary to make the
statement therein not misleading and, since the
effective date of the Registration Statement, there
has occurred no event required to be set forth in an
amended or supplemented Prospectus that has not been
so set forth;
(d) Subsequent to the respective dates as of which
information is given in the Registration Statement
and the Final Prospectus, and except as contemplated
in the Final Prospectus, the Company has not incurred
any direct or contingent liabilities or obligations
material to the Company not in the ordinary course of
business, or entered into any transactions material
to the Company not in the ordinary course of
business, and there has not been any change in the
capital stock or outstanding indebtedness of the
Company material to, or any material adverse change
in, the business, properties, assets, rights,
operations, condition (financial or otherwise) or
prospects of the Company and its Subsidiaries taken
as a whole; and
(e) Subsequent to the respective dates as of which
information is given in the Registration Statement
and the Final Prospectus, the Company has not
sustained any material loss of or damages to its
properties, whether or not insured.
(vii) You shall have received on the date on which Optional
Shares are purchased, a certificate, dated such date, signed
by or on behalf of Selling Shareholder, to the effect that the
representations and warranties of such Selling Shareholder in
this Agreement are materially correct on and as of the date of
this Agreement and on and as of such date, as if made on and
as of such date, and that such Selling Shareholder complied
with all of the agreements and satisfied all the conditions on
its part to be performed or satisfied at or prior to such
date.
(viii) The Company shall have furnished to you such further
certificates and documents as you shall reasonably request
(including certificates of officers of the Company) as to the
accuracy of the representations and warranties of the Company
herein, as to the performance by the Company of their
respective obligations hereunder and as to the other
conditions concurrent and precedent to the obligations of the
Underwriters hereunder.
All such opinions, certificates, letters and documents will be in
compliance with the provisions hereof only if they are reasonably satisfactory
to Underwriters' Counsel. The Company will furnish you with such number of
conformed copies of such opinions, certificates, letters and documents as you
shall reasonably request.
d. The shares have been approved for trading upon notice of issuance on
The NASDAQ NMS.
e. The Lockup Letter shall have been delivered to the Underwriters and
the Company shall have noted the restrictions contained in such Lockup
Letters on the books and records of the Company relating to stock
transfers and on any certificates representing shares of Common Stock
held by such person.
24
7. INDEMNIFICATION AND CONTRIBUTION.
a. The Company agrees to indemnify and hold harmless each Underwriter
against any losses, claims, damages or liabilities, joint or several,
to which such Underwriter may become subject, under the Act or
otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon: (i) any
untrue statement or alleged untrue statement made by the Company in
Section 1(a) of this Agreement; (ii) any untrue statement or alleged
untrue statement of any material fact contained in (A) the Registration
Statement or any amendment thereto, any Preliminary Prospectus, Final
Prospectus or any amendment or supplement thereto, or (B) any
application or other document, or any amendment or supplement thereto,
executed by the Company or based upon written information furnished by
or on behalf of the Company filed in any jurisdiction in order to
qualify the Shares under the securities or blue sky laws thereof or
filed with the Commission or any securities association or securities
exchange (each an "APPLICATION"); or (iii) the omission or alleged
omission to state in the Registration Statement or any amendment
thereto, any Preliminary Prospectus, Final Prospectus or any amendment
or supplement thereto, or any Application, a material fact required to
be stated therein or necessary to make the statements therein not
misleading, and will reimburse each Underwriter for any legal or other
expenses reasonably incurred by such Underwriter in connection with
investigating, defending against or appearing as a third-party witness
in connection with any such loss, claim, damage, liability or action;
provided, however, that the Company shall not be liable in any such
case to the extent that any such loss, claim, damage, liability or
action arises out of or is based upon an untrue statement or alleged
untrue statement or omission or alleged omission made in the
Registration Statement or any Amendment thereto, any Preliminary
Prospectus, Final Prospectus or any amendment or supplement thereto or
any Application, in reliance upon and in conformity with written
information furnished to the Company by any Underwriter expressly for
use therein. The obligations of the Company to indemnify the
Underwriters (and any controlling person of each Underwriter) pursuant
to this Agreement is subject to the condition that, insofar as such
indemnity agreement shall not inure to the benefit of any Underwriter
from whom the person asserting such losses, liabilities, claims,
damages or expenses purchased the Shares in the Offering, if (i) such
Underwriter failed to deliver a copy of the Final Prospectus to such
person at or prior to the time delivery is required by the Act, unless
such failure was due to the failure by the Company to provide copies of
the Final Prospectus to such Underwriter; and (ii) the delivery of such
Final Prospectus to such person would have constituted a complete
defense to the losses, claims, damages, liabilities or expenses
asserted by such person. The Company will not, without the prior
written consent of each Underwriter, settle or compromise or consent to
the entry of any judgment in any pending or threatened claim, action,
suit or proceeding (or related cause of action or portion thereof) in
respect of which indemnification may be sought hereunder (whether or
not such Underwriter is a party to such claim, action, suit or
proceeding), unless such settlement, compromise or consent includes an
unconditional release of such Underwriter from all liability that
arises out of such claim, action, suit or proceeding (or related cause
of action or portion thereof).
b. The Selling Shareholder agrees to indemnify and hold harmless the
Company and each Underwriter against any losses, claims, damages or
liabilities, joint or several, to which the Company or such Underwriter
may become subject, under the Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise
out of or are based upon: (i) any untrue statement or alleged untrue
statement made by such Selling Shareholder in Section 1(b) of this
Agreement; or (ii) any untrue statement or alleged untrue statement of
any material fact contained in the Registration Statement or any
amendment thereto, any Preliminary Prospectus the Final Prospectus or
any amendment or supplement thereto, or any Application, or arise out
of or are based upon the omission or alleged omission to state therein
a material fact required to be stated therein or necessary to make the
25
statements therein not misleading; PROVIDED SUCH MISSING OR UNTRUE
INFORMATION WAS INCLUDED IN RELIANCE UPON OR CONFORMITY WITH WRITTEN
INFORMATION FURNISHED TO THE COMPANY BY THE SELLING SHAREHOLDER
EXPRESSLY FOR USE THEREIN. The Selling Shareholder agrees to reimburse
each Underwriter for any legal or other expenses reasonably incurred by
such Underwriter in connection with investigating, defending against or
appearing as a third-party witness in connection with any such loss,
claim, damage, liability or action; provided, however, that such
Selling Shareholder shall be liable in any such case only to the extent
that any such loss, claim, damage, liability or action arises out of or
is based upon an untrue statement or alleged untrue statement or
omission or alleged omission made in the Registration Statement or any
amendment thereto, any Preliminary Prospectus the Final Prospectus or
any amendment or supplement thereto or any Application, in reliance
upon and in conformity with written information furnished to the
Company by such Selling Shareholder expressly for use therein. The
obligations of the Selling Shareholder to indemnify the Underwriters
(or any controlling person of such Underwriter) pursuant to this
indemnity agreement is subject to the condition that, insofar as such
losses, claims, damages, liabilities or expenses relate to any such
untrue statement, alleged untrue statement, omission or alleged
omission made in a Preliminary Prospectus that is corrected in the
Final Prospectus, such indemnity agreement shall not inure to the
benefit of any Underwriter from whom the person asserting such losses,
liabilities, claims, damages or expenses purchased the Shares in the
Offering, if (i) such Underwriter failed to deliver a copy of the Final
Prospectus to such person at or prior to the time delivery of such
Final Prospectus is required by the Act, unless such failure was due to
the failure by the Company to provide copies of the Prospectus to such
Underwriter; and (ii) the delivery of such Final Prospectus to such
person would have constituted a complete defense to the losses, claims,
damages, liabilities or expenses asserted by such person. The Selling
Shareholder will not, without the prior written consent of each
Underwriter, settle or compromise or consent to the entry of any
judgment in any pending or threatened claim, action, suit or proceeding
(or related cause of action or portion thereof) in respect of which
indemnification may be sought hereunder (whether or not such
Underwriter is a party to such claim, action, suit or proceeding),
unless such settlement, compromise or consent includes an unconditional
release of such Underwriter from all liability arising out of such
claim, action, suit or proceeding (or related cause of action or
portion thereof). Notwithstanding the foregoing provisions of this
Section 7(b), the Underwriters shall not be entitled to indemnity or
contribution from the Selling Shareholder in excess of the net proceeds
of the offering (before deducting expenses) received by such Selling
Shareholder.
c. Each Underwriter, severally but not jointly, agrees to indemnify and
hold harmless the Company and the Selling Shareholder and their
directors and 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 of the Exchange Act, against any losses, claims,
damages or liabilities to which the Company or the Selling Shareholder
may become subject under the Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise
out of or are based upon (A) any untrue statement or alleged untrue
statement of any material fact contained in the Registration Statement
or any amendment thereto, any Preliminary Prospectus, the Final
Prospectus, or any amendment or supplement thereto, or any Application,
or which arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, in each
case to the extent, but only to the extent, that such untrue statement
or alleged untrue statement or omission or alleged omission was made in
reliance upon and in conformity with written information furnished to
the Company by such Underwriter expressly for use therein OR (B) THE
NEGLIGENCE OR WILLFUL MISCONDUCT BY SUCH UNDERWRITER, and will
reimburse the Company and the Selling Shareholder and their directors
and 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 of the Exchange Act, for any legal
26
or other expenses reasonably incurred by the Company or such Selling
Shareholder and their directors and 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 of the Exchange Act, in connection
with investigating or defending any such loss, claim, damage, liability
or action.
d. Promptly after receipt by an indemnified party under subsection (a),
(b) or (c) above of notice of the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made
against the indemnifying party under such subsection, notify the
indemnifying party in writing of the commencement thereof; but the
omission so to notify the indemnifying party shall not relieve it from
any liability which it may have to any indemnified party otherwise than
under such subsection. In case any such action shall be brought against
any indemnified party and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to
participate therein and to the extent that it shall wish, jointly with
any other indemnifying party similarly notified, to assume the defense
thereof, with counsel satisfactory to such indemnified party (who shall
not, except with the consent of the indemnified party, be counsel to
the indemnifying party); provided, however, that if the defendants in
any such action include both the indemnified party and the indemnifying
party and the indemnified party shall have reasonably concluded based
upon written advice of counsel that there may be one or more legal
defenses available to it or other indemnified parties that are
different from or additional to those available to the indemnifying
party, the indemnifying party shall not have the right to assume the
defense of such action on behalf of such indemnified party and such
indemnified party shall have the right to select separate counsel to
defend such action on behalf of such indemnified party, provided,
further, however, that the Company shall be liable for the fees and
expenses of only one separate firm of attorneys for all indemnified
parties at any time in connection with any action, suit or proceeding
or in a series of separate but substantially similar or related
actions, suits or proceedings arising out of the same general
allegations and circumstances. After such notice from the indemnifying
party to such indemnified party of its election so to assume the
defense thereof and approval by such indemnified party of counsel
appointed to defend such action, the indemnifying party will not be
liable to such indemnified party under this Section 7 for any legal or
other expenses, other than reasonable costs of investigation,
subsequently incurred by such indemnified party in connection with the
defense thereof, unless (i) the indemnified party shall have employed
separate counsel in accordance with the proviso to the next preceding
sentence or (ii) the indemnifying party has authorized the employment
of counsel for the indemnified party at the expense of the indemnifying
party. Nothing in this Section 7(d) shall preclude an indemnified party
from participating at its own expense in the defense of any such action
so assumed by the indemnifying party.
e. If the indemnification provided for in this Section 7 is unavailable
to or insufficient to hold harmless an indemnified party under
subsection (a), (b), (c) or (d) above in respect of any losses, claims,
damages or liabilities (or actions in respect thereof) referred to
therein, then each indemnifying party shall contribute to the amount
paid or payable by such indemnified party as a result of such losses,
claims, damages or liabilities (or actions in respect thereof) in such
proportion as is appropriate to reflect the relative benefits received
by the Company and the Selling Shareholder on the one hand and the
Underwriters on the other from the offering of the Shares. If, however,
the allocation provided by the immediately preceding sentence is not
permitted by applicable law, then each indemnifying party shall
contribute to such amount paid or payable by such indemnified party in
such proportion as is appropriate to reflect not only such relative
benefits but also the relative fault of the Company and the Selling
Shareholder on the one hand and the Underwriters on the other in
connection with the statements or omissions that resulted in such
losses, claims, damages or liabilities (or actions in respect thereof),
as well as any other relevant equitable considerations. The relative
benefits received by the Company and
27
the Selling Shareholder 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 and the Selling Shareholder bear to the total underwriting
discounts and commissions received by the Underwriters. The relative
fault 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 or the Selling Shareholder on the
one hand or the Underwriters on the other and the parties' relative
intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission. The Company, the Selling
Shareholder and the Underwriters agree that it would not be just and
equitable if contributions pursuant to this subsection (e) were
determined by pro rata allocation (even if the Underwriters were
treated as one entity for such purpose) or by any other method of
allocation which does not take account of the equitable considerations
referred to above in this subsection (e). The amount paid or payable by
an indemnified party as a result of the losses, claims, damages or
liabilities (or actions in respect thereof) referred to above in this
subsection (e) shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding
the provisions of this subsection (e), (i) no Underwriter shall be
required to contribute any amount in excess of the amount by which the
total price at which the Shares underwritten by it and distributed to
the public were offered to the public exceeds the amount of any damages
which such Underwriter has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged
omission, (ii) the Selling Shareholder shall not be required to
contribute any amount in excess of the amount by which the net proceeds
received by such Selling Shareholder from the sale of Shares exceeds
the damages which such Selling Shareholder has otherwise been required
to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission, and (iii) 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 in
this subsection (e) to contribute are several in proportion to their
respective underwriting obligations and not joint.
f. The obligations of the Company and the Selling Shareholder under
this Section 7 shall be in addition to any liability which the Company
or such Selling Shareholder may otherwise have and shall extend, upon
the same terms and conditions, to each person, if any, who controls any
Underwriter within the meaning of the Act; and the obligations of the
Underwriters under this Section 7 shall be in addition to any liability
which the respective Underwriters may otherwise have and shall extend,
upon the same terms and conditions, to each officer and director of the
Company and any Selling Shareholder and to each person, if any, who
controls the Company or the Selling Shareholder within the meaning of
the Act.
8. INDEMNITY, REPRESENTATIONS AND WARRANTIES TO SURVIVE DELIVERY. The indemnity
and contribution provisions contained in this Section 7 and the representations,
warranties and other statements of the Company and the Selling Shareholder
contained in this Agreement shall remain operative and in full force and effect
regardless of (i) any termination of this Agreement, (ii) any investigation made
by or on behalf of any Underwriter or any person controlling any Underwriter,
the Selling Shareholder or any person controlling the Selling Shareholder, or
the Company, its officers or directors or any person controlling the Company and
(iii) acceptance of and payment for any of the Shares.
28
9. DEFAULT BY UNDERWRITERS. If any Underwriter or Underwriters shall fail to
take up and pay for the number of Firm Shares agreed by such Underwriter of
Underwriters to be purchased hereunder upon tender of such Firm Shares in
accordance with the terms hereof and the aggregate number of Firm Shares that
such defaulting Underwriter or Underwriters so agreed but failed to purchase
does not exceed 10% of the Firm Shares, the remaining Underwriters shall be
obligated severally in proportion to their respective commitments hereunder, to
take up and pay for the Firm Shares of such defaulting Underwriter or
Underwriters.
If any Underwriter or Underwriters so defaults and the aggregate number
of Firm Shares that such defaulting Underwriter or Underwriters agreed but
failed to take up and pay for exceeds __% of the Firm Shares, the remaining
Underwriters shall have the right, but shall not be obligated, to take up and
pay for (in such proportions as may be agreed upon among them) the Firm Shares
that the defaulting Underwriter or Underwriters so agreed but failed to
purchase. If such remaining Underwriters do not, at the Closing Date, take up
and pay for the Firm Shares that the defaulting Underwriter or Underwriters so
agreed but failed to purchase, the Closing Date shall be postponed for
twenty-four hours to allow the several Underwriters to substitute within
twenty-four hours (including non-business hours) another underwriter or
underwriters (which may include any nondefaulting Underwriter) satisfactory to
the Company. If no such underwriter or underwriters shall have been substituted
as aforesaid by such postponed Closing Date, the Closing Date may, at the option
of the Company, be postponed for a further twenty-four hours, if necessary, to
allow the Company to find another underwriter or underwriters, satisfactory to
you, to purchase the Firm Shares that the defaulting Underwriter or Underwriters
so agreed but failed to purchase. If it shall be arranged for the remaining
Underwriter or substituted Underwriters to take up the Firm Shares of the
defaulting Underwriter or Underwriters as provided in this Section, (i) the
Company shall have the right to postpone the time of delivery for a period of
not more than seven full business days, in order to effect whatever changes may
thereby be made necessary in the Registration Statement or the Final Prospectus,
or in any other documents or arrangements, and the Company agrees promptly to
file any amendments to the Registration Statements or supplements to the Final
Prospectus that may thereby be made necessary, and (ii) the respective number of
Firm Shares to be purchased by the remaining Underwriters and substituted
underwriters shall be taken as the basis of their underwriting obligation. If
the remaining Underwriters shall not take up and pay for all such Firm Shares so
agreed to be purchased by the defaulting Underwriter or Underwriters or
substitute another underwriter or underwriters as aforesaid and the Company
shall not find or shall not elect to seek another underwriter or underwriters
for such Firm Shares as aforesaid, then this Agreement shall terminate.
In the event of any termination of this Agreement pursuant to the
preceding paragraph of this Section, the Company shall not be liable to any
Underwriter (except as provided in Section 5 and in Section 7 hereof) nor shall
any Underwriter (other than an Underwriter who shall have failed, otherwise than
for some reason permitted under this Agreement, to purchase the number of Firm
Shares agreed by such Underwriter to be purchased hereunder, which Underwriter
shall remain liable to the Company and the other Underwriters for damages, if
any, resulting from such default) be liable to the Company (except to the extent
provided in Section 7 hereof).
The term "Underwriter" in this Agreement shall include any person
substituted for an Underwriter under this Section.
10. EFFECTIVE DATE OF THIS AGREEMENT AND TERMINATION
a. This Agreement shall become effective immediately as to Sections 5,
7, 9, 10 and 11 and, as to all other provisions (i) if at the time of
execution of this Agreement the Registration Statement has not become
effective, at 9:00 A.M., Eastern time, on the first full business day
following the effectiveness of the Registration Statement, or (ii) if
at the time of execution of this Agreement the Registration Statement
has been declared effective, at 9:00 A.M., Eastern time, on the first
business day following
29
the date of execution of this Agreement; but this Agreement shall
nevertheless become effective at such earlier time after the
Registration Statement becomes effective as you may determine on and by
notice to the Company or by release of any of the Shares of sale to the
public. For the purposes of this Section 10, the Shares shall be deemed
to have been so released upon the release for publication of any
newspaper advertisement relating to the Shares or upon the release by
you of telegrams (i) advising the Underwriters that the Shares are
released for public offering, or (ii) offering of Shares for sale to
securities dealers, whichever may occur first. By giving notice as set
forth in Section 11 before the time this Agreement becomes effective,
you, as the Representatives of the several Underwriters, or the
Company, may prevent this Agreement from becoming effective without
liability of any party to any other party, except that the Company
shall remain obligated to pay costs and expenses to the extent provided
in Section 5a and 5b hereof.
b. You shall have the right to terminate this Agreement by giving
notice as hereinafter specified at any time on or prior to the Closing
Date or on or prior to any later date on which the Option Shares are to
be purchased as the case may be (i) if the Company or Selling
Shareholder shall have failed, refused or been unable, on or prior to
the Closing Date, or on or prior to any later date on which the Option
Shares are to be purchased, as the case may be, to perform any
agreement on its part to be performed, or because any other condition
of the Underwriters' obligations hereunder required to be fulfilled by
the Company is not fulfilled, or (ii) if trading on the New York Stock
Exchange shall have been suspended, or minimum or maximum prices for
trading shall have been fixed, or maximum ranges for prices for
securities shall have been required on the New York Stock Exchange, by
the New York Stock Exchange or by order of the Commission or any other
governmental authority having jurisdiction, or if a banking moratorium
shall have been declared by federal or New York or California
authorities, or (iii) if at or prior to the Closing Date, or on or
prior to any later date on which Option Shares are to be purchased, as
the case may be, the Company shall have sustained a loss by strike,
fire, flood, accident or other calamity of such character as to
interfere materially with the conduct of the business and operations of
the Company regardless of whether or not such loss shall have been
insured, or (iv) if at or prior to the Closing Date, or on or prior to
any later date on which Option Shares are to be purchased, as the case
may be, there shall have been an outbreak or escalation of hostilities
in which the United States is involved or other national or
international calamity or any substantial change in political,
financial or economic conditions shall have occurred or shall have
accelerated to such extent, in the judgment of the Representatives, as
to have a material adverse effect on the financial markets of the
United States, or to make it impracticable or inadvisable to proceed
with completion of the sale of and payment for the Shares. Any such
termination shall be without liability OF any party to any other party
except as provided in Sections 5a and 5b hereof and except that in the
event of termination solely pursuant to Section 10(b)(i) hereof, the
Company shall remain obligated to pay costs and expenses pursuant to
SECTIONS 5a and 5B hereof.
If you elect to prevent this Agreement from becoming effective or to
terminate this Agreement as provided in this Section 10, the Company shall be
notified promptly by you by telephone or telegram, confirmed by letter. If the
Company shall elect to prevent this Agreement from becoming effective, you shall
be notified promptly by the Company by telephone or telegram, confirmed by
letter.
11. NOTICES. All notices or communications hereunder, except as herein otherwise
specifically provided, shall be in writing and if sent to you shall be mailed,
delivered or telegraphed and confirmed to Xxxxxxx X. Xxxxx & Co., 000 0xx
Xxxxxx, Xxxxx 000, Xx. Xxxxxxxxxx, XX, 00000, Attention: XXXXXXX X. XXXXX, with
a copy sent to Xxxxx X. Xxxxxxxxx, Esq., Schifino & Xxxxxxxxx, P.A., 000 X.
Xxxxxxxx Xxxxxx, Xxxxx 0000, Xxxxx, XX 00000; if sent to the Company shall be
mailed, delivered or telegraphed and confirmed to PELICAN FINANCIAL, Inc., 315
00
Xxxx Xxxxxxxxxx, Xxx Xxxxx, Xxxxxxxx 00000, Attention: Xxxxxxx X. Xxxxxxx, with
a copy sent to Xxxxxx X. Xxxxxx, Esq., Manatt, Xxxxxx & Xxxxxxxx, LLP, 0000 X
Xxxxxx, X. X., Xxxxxxxxxx, X.X. 00000-0000.
12. PARTIES. This Agreement shall inure to the benefit of and be binding upon
the several Underwriters, the Company and Selling Shareholder and their
respective successors and assigns. Nothing expressed or mentioned in this
Agreement is intended or shall be construed to give any person or corporation,
other than the parties hereto and their respective successors and assigns and
the controlling persons, officers and directors referred to in Section 7 hereof,
any legal or equitable rights, remedy or claim in respect of this Agreement or
any provisions herein contained, this Agreement and all conditions and
provisions hereof being intended to be and being for the sole and exclusive
benefit of the parties hereto and their respective executors, administrators,
successors and assigns and said controlling persons and said officers and
directors, and for the benefit of no other person or corporation. No purchaser
of any of the shares from any Underwriter shall be construed a successor or
assign by reason merely of such purchase.
In all dealings with the Company under this Agreement, you shall act on
behalf of each of the several Underwriters, and the Company shall be entitled to
act and rely upon any statement, request, notice or agreement on behalf of each
of the several Underwriters as if the same shall have been made or given in
writing by you.
13. APPLICABLE LAW. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of Florida.
14. COUNTERPARTS. This Agreement may be signed in several counterparts, each of
which will constitute an original.
15. INFORMATION PROVIDED BY UNDERWRITERS. The information set forth in the last
paragraph on the front cover page (insofar as such information relates to the
Underwriters) and under "Underwriting" in any Preliminary Prospectus and in the
Final Prospectus constitutes the only information furnished by the Underwriters
to the Company for inclusion in any Preliminary Prospectus, the Final Prospectus
or the Registration Statement, and you on behalf of the respective Underwriters,
represent and warrant to the Company that the statements made therein do not
contain an untrue statement of a material fact and do not fail to state any
material fact required to be stated therein in order to make such statements in
light of the circumstances under which they were made not misleading.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.]
31
If the foregoing correctly sets forth the understanding among the
Company, the several Underwriters and the Selling Shareholder please so indicate
in the space provided below for that purpose, whereupon this letter shall
constitute a binding agreement among the Company, the several Underwriters and
the Selling Shareholder.
Very truly yours,
PELICAN FINANCIAL, INC.
By:
----------------------------------
THE SELLING SHAREHOLDER
XXXXXXX X. XXXXXXX
By:
----------------------------------
ATTORNEY-IN-FACT
Accepted as of the date first above written:
Xxxxxxx X. Xxxxx & Co.
on their behalf and on behalf of each of the Several Underwriters named in
Schedule I hereto.
By: Xxxxxxx X. Xxxxx & Co.
By:
-----------------------------
XXXXXXX X. XXXXX, CHAIRMAN
32
SCHEDULE I
MAXIMUM
NUMBER NUMBER OF
OF FIRM SHARES OPTIONAL
TO BE SHARES TO BE
UNDERWRITER PURCHASED PURCHASED
Xxxxxxx X. Xxxxx & Co.
33
SCHEDULE II
NUMBER OF NUMBER OF
FIRM SHARES OPTIONAL SHARES
TO BE SOLD TO BE SOLD
The Company............................. 1,200,000 0
Xxxxxxx X. Xxxxxxx...................... 0 180,000
-------------- ---------
1,200,000 180,000
34
SCHEDULE III
SUBSIDIARIES
STATE OR JURISDICTION OF
NAME INCORPORATION % OWNERSHIP
---- ------------- -----------
Wastenaw Mortgage Company MICHIGAN 100%
Pelican National Bank UNITED STATES 100%
35
