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EXHIBIT 1
Draft: 12/30/98
2,000,000 SHARES
TOWER FINANCIAL CORPORATION
COMMON STOCK
UNDERWRITING AGREEMENT
__________, 1999
Xxxxx Capital Markets,
a division of First Chicago Capital Markets, Inc.
XxXxxxxx Investments Inc.
x/x Xxxxx Xxxxxxx Xxxxxxx
Xxx Xxxxxxxx
Xxxxxxx, Xxxxxxxx 00000
Ladies and Gentlemen:
Tower Financial Corporation, an Indiana corporation (the "Company"),
proposes to issue and sell 2,000,000 shares (the "Firm Shares") of its
authorized but unissued Common Stock (the "Common Stock") to the Underwriters
named in Schedule I attached hereto (the "Underwriters"). In addition, the
Company proposes to grant to the Underwriters an option to purchase up to an
additional 300,000 shares (the "Optional Shares") to cover over-allotments. The
Firm Shares and the Optional Shares are called, collectively, the "Shares."
1. SALE AND PURCHASE OF THE SHARES.
(a) On the basis of the representations, warranties and
agreements of the Company contained in, and subject to the terms and
conditions of, this Agreement, the Company agrees to issue and sell to
the Underwriters, and the Underwriters agree to purchase, the Firm
Shares at a purchase price of $_____ per Share.
(b) On the basis of the representations, warranties and
agreements of the Company contained in, and subject to the terms and
conditions of, this Agreement, the policies of the National Association
of Securities Dealers, Inc. (the "NASD"), and pursuant to directions
from the Company, the Underwriters will offer to sell to each of the
persons listed on Exhibit A (who may purchase alone or with family
members to the extent permitted by the Free-Riding and Withholding
Interpretation (the "Interpretation") under the Conduct Rules of the
NASD) the number of Shares set forth opposite their respective names on
Exhibit
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A. The parties agree that the securities purchased and sold under this
subparagraph shall constitute "issuer directed securities" sold to the
issuer's employees or directors or other persons under the
Interpretation.
(c) On the basis of the representations, warranties and
agreements of the Company contained in, and subject to the terms and
conditions of, this Agreement, the Company grants to the Underwriters
an option to purchase all or any part of the Optional Shares at a price
per Share of $_____. The over-allotment option may be exercised only to
cover over-allotments in the sale of the Firm Shares by the
Underwriters and may be exercised in whole or in part at any time or
times on or before 12:00 noon, Detroit time, on the day before the Firm
Shares Closing Date (as defined in Section 2 below), and only once at
any time after that date and within 30 days after the Effective Date
(as defined in Section 4 below), in each case upon written or
transmitted facsimile notice, or verbal notice confirmed by transmitted
facsimile, written or telegraphic notice, by the Underwriters to the
Company no later than 12:00 noon, Detroit time, on the day before the
Firm Shares Closing Date or at least three but not more than five full
business days before the Optional Shares Closing Date (as defined in
Section 2 below), as the case may be, setting forth the number of
Optional Shares to be purchased and the time and date (if other than
the Firm Shares Closing Date) of such purchase.
2. DELIVERY AND PAYMENT. Delivery by the Company of the Firm Shares to
the Underwriters and payment of the purchase price by certified or official bank
check payable in Detroit Clearing House (next day) funds to the Company, shall
take place at the offices of Xxxxxxxx Xxxxxx Xxxxxxxx and Xxxx, 0000 Xxxxx
Xxxxxxxx Xxxxxxxx, Xxxxxxx, Xxxxxxxx 00000, at 10:00 a.m., Detroit time, on such
date, not later than the third (or, if the Firm Shares are priced, as
contemplated by Rule 15c6-1(c) under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), after 4:30 p.m., Washington, D.C. time, the
fourth) full business day following the first date that any of the Shares are
released by the Underwriters for sale to the public, as the Underwriters shall
designate by at least 48 hours prior notice to the Company (the "Firm Shares
Closing Date"); provided, however, that if the Prospectus (as defined in Section
4 below) is at any time prior to the Firm Shares Closing Date recirculated to
the public, the Firm Shares Closing Date shall occur upon the later of the third
or fourth, as the case the may be, full business day following the first date
that any of the Shares are released by the Underwriters for sale to the public
or the date that is 48 hours after the date that the Prospectus has been so
recirculated.
To the extent the option with respect to the Optional Shares is
exercised, delivery by the Company of the Optional Shares, and payment of the
purchase price by certified or official bank check payable in Detroit Clearing
House (next day) funds to the Company, shall take place at the offices of
Xxxxxxxx Xxxxxx Xxxxxxxx and Xxxx specified above at the time and on the date
(which may be the Firm Shares Closing Date) specified in the notice referred to
in Section 1(c) (such time and date of delivery and payment are called the
"Optional Shares Closing
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Date"). The Firm Shares Closing Date and the Optional Shares Closing Date are
called, individually, a "Closing Date" and, collectively, the "Closing Dates."
Certificates representing the Firm Shares shall be registered in
such names and shall be in such denominations as the Underwriters shall request
at least two full business days before the Firm Shares Closing Date or, in the
case of the Optional Shares, on the day of notice of exercise of the option as
described in Section 1(c), and shall be made available to the Underwriters for
checking and packaging, at such place as is designated by the Underwriters, at
least one full business day before the Closing Date.
3. PUBLIC OFFERING. The Company understands that the Underwriters
propose to make a public offering of the Shares, as set forth in and pursuant to
the Prospectus, as soon after the Effective Date as the Underwriters deem
advisable. The Company hereby confirms that the Underwriters and dealers have
been authorized to distribute each preliminary prospectus (other than the
preliminary prospectus included in the initial filing of the Registration
Statement) and are authorized to distribute the Prospectus (as from time to time
amended or supplemented).
4. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company represents and warrants to the Underwriters and agrees
with the Underwriters as follows:
(a) The Company has carefully prepared in conformity with the
requirements of the Securities Act of 1933, as amended (the "Securities
Act") and the rules and regulations adopted by the Securities and
Exchange Commission (the "Commission") thereunder (the "Rules"), a
registration statement on Form SB-2 (No. 333-67235), including a
preliminary prospectus, and has filed with the Commission the
registration statement and such amendments thereof as may have been
required to the date of this Agreement. Copies of such registration
statement (including all amendments thereof) and of the related
preliminary prospectus have heretofore been delivered by the Company to
you. The term "preliminary prospectus" means any preliminary prospectus
included as a part of the Registration Statement prior to the
effectiveness thereof or filed with the Commission pursuant to Rule
424(a) of the Rules. The registration statement as amended (including
any supplemental registration statement under Rule 462(b) or any
amendment under Rule 462(c) of the Rules) at the time and on the date
it becomes effective (the "Effective Date"), including the prospectus,
financial statements, schedules, exhibits, and all other documents
incorporated by reference therein or filed as a part thereof, is called
the "Registration Statement"; provided, however, that "Registration
Statement" shall also include all Rule 430A Information (as defined
below) deemed to be included in such Registration Statement at the time
such Registration Statement becomes effective as provided by Rule 430A
of the Rules. The term "Prospectus" means the Prospectus as filed with
the Commission pursuant to Rule 424(b) of the Rules or, if no filing
pursuant to Rule 424(b) of the Rules is required, means the form of
final prospectus
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included in the Registration Statement at the time such Registration
Statement becomes effective. The term "Rule 430A Information" means
information with respect to the Shares and the offering thereof
permitted to be omitted from the Registration Statement when it becomes
effective pursuant to Rule 430A of the Rules. Reference made herein to
any preliminary prospectus or to the Prospectus shall be deemed to
refer to and include any document attached as an exhibit thereto or
incorporated by reference therein, as of the date of such preliminary
prospectus or the Prospectus, as the case may be. The Company will not
file any amendment of the Registration Statement or supplement to the
Prospectus to which the Underwriters shall reasonably object in writing
after being furnished with a copy thereof.
(b) Each preliminary prospectus, at the time of filing
thereof, contained all material statements which were required to be
stated therein in accordance with the Securities Act and the Rules, and
conformed in all material respects with the requirements of the
Securities Act and the Rules, and did not include any untrue statement
of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading. The
Commission has not issued any order suspending or preventing the use of
any preliminary prospectus. When the Registration Statement shall
become effective, when the Prospectus is first filed pursuant to Rule
424(b) of the Rules, when any post-effective amendment of the
Registration Statement shall become effective, when any supplement to
or pre-effective amendment of the Prospectus is filed with the
Commission and at each Closing Date, the Registration Statement and the
Prospectus (and any amendment thereof or supplement thereto) will
comply in all material respects with the applicable provisions of the
Securities Act and the Rules, and neither the Registration Statement
nor the Prospectus, nor any amendment thereof or supplement thereto,
will contain any untrue statement of a material fact or will omit to
state any material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances
under which they were made, not misleading; provided, however, that the
Company makes no representation or warranty as to the information
contained in the Registration Statement or the Prospectus or any
amendment thereof or supplement thereto in reliance upon and in
conformity with information furnished in writing to the Company by
Xxxxx Capital Markets, specifically for use in connection with the
preparation thereof.
(c) All contracts and other documents required to be filed as
exhibits to the Registration Statement have been filed with the
Commission as exhibits to the Registration Statement.
(d) PricewaterhouseCoopers, LLP, whose report is filed with
the Commission as part of the Registration Statement, are, and during
the periods
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covered by their report were, independent public accountants as
required by the Securities Act and the Rules.
(e) The Company has been duly organized and is validly
existing as a corporation in good standing under the laws of the State
of Indiana. The Company's subsidiary, Tower Bank & Trust Company, an
Indiana banking corporation (the "Bank"), has been duly organized and
is validly existing as a banking corporation in good standing under the
Indiana Financial Institutions Act (the "Banking Code") and is
currently limited to the transaction of only such business as is
incidental and necessarily preliminary to its organization. Neither the
Company nor the Bank has any properties or conducts any business
outside of the State of Indiana which would require either of them to
be qualified as a foreign corporation or bank, as the case may be, in
any jurisdiction outside of Indiana. The Bank has no directly or
indirectly held subsidiary, and the Bank is the sole subsidiary held
directly or indirectly by the Company. The Company has all power,
authority, authorizations, approvals, consents, orders, licenses,
certificates and permits needed to enter into, deliver and perform this
Agreement and to issue and sell the Shares, except for such
authorizations, approvals, consents, orders, licenses, certificates,
permits, registrations or qualifications as may be required under state
securities or Blue Sky laws in connection with the purchase and
distribution of the Shares by the Underwriters.
(f) The application for permission to organize the Bank (the
"DFI Application") was approved by the Department of Financial
Institutions of the State of Indiana (the "DFI") on ________, 1998,
pursuant to Order No._________, subject to certain conditions specified
in the Order and supplemental correspondence from the DFI dated the
same date. The Order and supplemental correspondence from the DFI are
collectively referred to in this Agreement as the "DFI Order." All
conditions contained in the DFI Order have been satisfied, except those
conditions relating to paid-in capital of the Bank, maintenance of
capital ratios and valuation reserves, completion of the DFI's
preopening investigation and the issuance by the DFI of a certificate
to commence business. The Bank's application to the Federal Deposit
Insurance Corporation (the "FDIC") to become an insured depository
institution (the "FDIC Application") under the provisions of the
Federal Deposit Insurance Act, as amended, was approved by order of the
FDIC dated ________, 1998 (the "FDIC Order"), subject to certain
conditions specified in the FDIC Order. All conditions contained in the
FDIC Order required to be satisfied before the date of this Agreement
have been satisfied. The Bank's application to the Board of Governors
of the Federal Reserve System (the "FRB") to become a member of the
Federal Reserve System (the "FRB Application") was approved by order of
the FRB dated ________, 1998 (the "FRB Order"), subject to certain
conditions specified in the FRB Order. All conditions contained in the
FRB Order required to be satisfied before the date of this Agreement
have been satisfied. The Company's application to the FRB to become a
bank holding company and
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acquire all issued capital stock of the Bank (the "Holding Company
Application") under the Bank Holding Company Act of 1956, as amended,
was approved by order of the FRB, dated _________, 1999 (the "Holding
Company Approval"), subject to certain conditions specified in the
Holding Company Approval. All conditions in the Holding Company
Approval required to be satisfied before the date of this Agreement
have been satisfied. Each of the DFI Application, FDIC Application, FRB
Application and Holding Company Application, as amended at their
respective times of approval, contained all required information and
such information was complete and accurate in all material respects.
Other than the remaining conditions to be fulfilled under the DFI
Order, FDIC Order, FRB Order and Holding Company Approval specified
above, no authorization, approval, consent, order, license, certificate
or permit of and from any federal, state, or local governmental or
regulatory official, body, or tribunal, is required for the Company or
the Bank to commence and conduct their respective businesses and own
their respective properties as described in the Prospectus, except such
authorizations, approvals, consents, orders, licenses, certificates, or
permits as are not material to the commencement or conduct of their
respective businesses or to the ownership of their respective
properties.
(g) The financial statements of the Company and any related
notes thereto, included in the Registration Statement and the
Prospectus, present fairly the financial position of the Company as of
the date of such financial statements and for the period covered
thereby. Such statements and any related notes have been prepared in
accordance with generally accepted accounting principles applied on a
consistent basis and certified by the independent accountants named in
subsection 4(d) above. No other financial statements are required to be
included in the Prospectus or the Registration Statement.
(h) The Company owns adequate and enforceable rights to use
any patents, patent applications, trademarks, trademark applications,
service marks, copyrights, copyright applications and other similar
rights (collectively, "Intangibles") necessary for the conduct of the
material aspects of its business as described in the Prospectus.
The Company has not infringed, is not infringing, and has not received
any notice of infringement of, any Intangible of any other person.
(i) The Company has a valid and enforceable leasehold interest
in the real property located at 000 Xxxx Xxxxx Xxxxxx, Xxxxx ____, Xxxx
Xxxxx, Xxxxxxx. Such leasehold interest is free and clear of all liens,
encumbrances, claims, security interests and defects.
(j) There are no litigation or governmental or other
proceedings or investigations pending before any court or before or by
any public body or board or threatened against the Company or the Bank,
and to the best of the Company's knowledge, there is no reasonable
basis for any such litigation, proceedings or
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investigations, which in any such case would have a material adverse
effect on commencement or conduct of the respective businesses of the
Company or the Bank or the ownership of their respective properties.
(k) The Company and Bank have filed all federal, state, and
local tax returns required to be filed by them and paid all taxes shown
due on such returns as well as all other material taxes, assessments
and governmental charges which have become due; no material deficiency
with respect to any such return has been assessed or proposed.
(l) Subsequent to the respective dates as of which information
is given in the Registration Statement and the Prospectus, there has
not been any material adverse change in the condition (financial or
other), business, properties or prospects of the Company.
(m) No default exists, and no event has occurred which with
notice or lapse of time, or both, would constitute a default, in the
due performance and observance of any material term, covenant or
condition, by the Company, the Bank or, to the best of the Company's
knowledge, any other party, of any lease, indenture, mortgage, note or
any other agreement or instrument to which the Company or the Bank is a
party or by which either of them or either of their businesses may be
bound or affected, except such defaults or events as are not material
to the commencement or conduct of their respective businesses or
ownership of their respective properties.
(n) Neither the Company nor the Bank is in violation of any
term or provision of the articles of incorporation or bylaws of the
Company or the Bank. Neither the Company nor the Bank is in violation
in any material respect of any franchise, license, permit, judgment,
decree, order, statute, rule or regulation.
(o) Neither the execution, delivery and performance of this
Agreement by the Company nor the consummation by the Company of the
transactions contemplated hereby (including, without limitation, the
issuance and sale by the Company of the Shares) will (i) give rise to a
right to terminate or accelerate the due date of any payment due under,
or conflict with or result in the breach of any term or provision of,
or constitute a default (or an event which with notice or lapse of
time, or both, would constitute a default) under, or require any
consent under, or result in the execution or imposition of any lien,
charge or encumbrance upon any properties or assets of the Company or
the Bank pursuant to the terms of, (a) any lease, indenture, mortgage,
note or other agreement or instrument to which the Company or the Bank
is a party or by which either of them or either of their businesses is
bound or affected, or (b) any franchise, license, permit, judgment,
decree, order, statute, rule or regulation or (ii) violate any
provision of the articles of incorporation or bylaws of the Company or
the Bank, except, in any
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such case referred to in this paragraph (o), those which are immaterial
in amount or effect.
(p) The Company has authorized capital stock as set forth in
the Prospectus. One share of Common Stock is, and no shares of
preferred stock are, issued and outstanding. The issuance, sale and
delivery of the Shares have been duly authorized by all necessary
corporate action by the Company and, when issued, sold and delivered
against payment therefor pursuant to this Agreement, will be duly and
validly issued, fully paid and nonassessable and none of them will have
been issued in violation of any preemptive or other right. Upon
issuance, sale, and delivery thereof against payment therefor, all of
the capital stock of the Bank will be duly authorized and validly
issued, fully paid and nonassessable and will be owned by the Company,
free and clear of all liens, encumbrances and security interests
(subject to the provisions of the Banking Code). There is no
outstanding option, warrant or other right calling for the issuance of,
and no binding commitment to issue, any share of stock of the Company
or the Bank or any security convertible into or exchangeable for stock
of the Company or the Bank, except pursuant to this Agreement and
except for stock options described in the Registration Statement (the
"Stock Options") under the Company's 1998 Stock Option and Incentive
Plan (the "Stock Option Plan"). The Common Stock, the Shares and the
Stock Options conform to all statements in relation thereto contained
in the Registration Statement and the Prospectus.
(q) Subsequent to the respective dates as of which information
is given in the Registration Statement and the Prospectus, neither the
Company nor the Bank has (1) issued any securities or incurred any
material liability or obligation, direct or contingent, (2) entered
into any material transaction, or (3) declared or paid any dividend or
made any distribution on any of their stock, except liabilities,
obligations, and transactions reasonably expected based on the
disclosures in the Prospectus.
(r) This Agreement has been duly and validly authorized,
executed and delivered by the Company and is the legal, valid and
binding agreement and obligation of the Company, subject, as to
enforcement, to applicable bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and other laws of general applicability
relating to or affecting creditors' rights and to general equity
principles.
(s) The Commission has not issued any order preventing or
suspending the use of any preliminary prospectus.
(t) Neither the Company, nor the Bank, nor, to the Company's
knowledge any director, officer, agent, employee or other person
associated with the Company or the Bank, acting on behalf of the
Company or the Bank, has used any corporate funds for any unlawful
contribution, gift, entertainment or other
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unlawful expense relating to political activity; made any direct or
indirect unlawful payment to any foreign or domestic government
official or employee from corporate funds; violated or is in violation
of any provision of the Foreign Corrupt Practices Act of 1977; or made
any bribe, rebate, payoff, influence payment, kickback or other
unlawful payment.
(u) Neither the Company nor the Bank nor any affiliate of
either of them has taken, and they will not take, directly or
indirectly, any action designed to cause or result in, or which has
constituted or which might reasonably be expected to constitute, the
stabilization or manipulation of the price of the shares of the Common
Stock in order to facilitate the sale or resale of any of the Shares.
(v) No transaction has occurred between or among the Company
or the Bank and any of their officers, directors, organizers or the
Company's shareholder or any affiliate or affiliates of any such
officer, director, organizer, or shareholder, that is required to be
described in and is not described in the Prospectus.
(w) The Company is not and will not after the offering be an
"investment company," or a company "controlled" by an "investment
company," within the meaning of the Investment Company Act of 1940, as
amended.
(x) The Company has obtained from all of its executive
officers and directors their written agreement that (i) for a period of
180 days from the date of the Effective Date, they will not offer to
sell, sell, transfer, contract to sell, or grant any option for the
sale of or otherwise dispose of, directly or indirectly, any shares of
Common Stock of the Company (or any securities convertible into or
exercisable for such shares of Common Stock), except for (1) the
exercise of Stock Options under the Stock Option Plan, (2) gifts of
Common Stock (or other securities) to a donee or donees who agree in
writing to be bound by this clause and (3) the redemption by the
Company of the share of Common Stock outstanding on the date hereof,
and (ii) for a period of three months from the date of the Effective
Date, they will not sell, transfer, assign, pledge, or hypothecate any
shares of Common Stock acquired under Paragraph l(b), above.
5. CONDITIONS OF THE UNDERWRITERS' OBLIGATIONS. The obligation
of the Underwriters to purchase the Shares shall be subject to the accuracy of
the representations and warranties of the Company in this Agreement as of the
date of this Agreement and as of the Firm Shares Closing Date or Optional Shares
Closing Date, as the case may be, to the accuracy of the statements of Company
officers made pursuant to the provisions of this Agreement, to the performance
by the Company of its obligations under this Agreement, and to the following
additional terms and conditions:
(a) The Registration Statement shall have become effective not
later than 5:00 P.M., Detroit time, on the date of this Agreement or on
such later date and time as shall be consented to in writing by the
Underwriters; if the filing of
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the Prospectus, or any supplement thereto, is required pursuant to Rule
424(b) of the Rules, the Prospectus shall have been filed in the manner
and within the time period required by Rule 424(b) of the Rules; at
each Closing Date, if any, no stop order shall have been issued or
proceedings therefor initiated or threatened by the Commission; and any
request of the Commission for inclusion of additional information in
the Registration Statement, or otherwise, shall have been complied with
to the reasonable satisfaction of the Underwriters.
(b) At each Closing Date, the Underwriters shall have
received the favorable opinion of Xxxxx & Xxxxxxx, counsel for the
Company, dated the Firm Shares Closing Date or the Optional Shares
Closing Date, as the case may be, addressed to the Underwriters and in
form and scope reasonably satisfactory to counsel for the Underwriters
to the effect that:
(i) The Company is existing as a corporation under
the laws of the State of Indiana. The Bank is existing as a
banking corporation under the Banking Code. Neither the
Company nor the Bank is required to be qualified to do
business in any jurisdiction outside Indiana where the failure
so to qualify would have a material adverse effect on the
business of the Company or the Bank.
(ii) Each of the Company and the Bank has full
corporate power, and all material authorizations, approvals,
orders, licenses, certificates and permits of and from all
governmental bank regulatory officials and bodies, necessary
to own its properties and to commence and conduct its business
as described in the Registration Statement and Prospectus,
including, without limitation, the DFI Order, FDIC Order, FRB
Order and the Holding Company Approval, subject to the
fulfillment of the conditions with respect to the DFI Order,
FDIC Order, FRB Order and the Holding Company Approval all as
described in Section 4(f) above, except for such
authorizations, approvals, orders, licenses, certificates and
permits as are not material to the ownership of its properties
or the commencement or conduct of its business.
(iii) The authorized capital stock of the Company is
as described in the Prospectus. Immediately prior to the Firm
Shares Closing Date, the Company had only one share of Common
Stock issued and outstanding. The Common Stock is not subject
to preemptive rights. The Shares have been duly and validly
authorized and, when the Shares have been issued and delivered
by the Company to the Underwriters against payment therefor in
accordance with the terms of this Agreement, (A) the Shares
will be fully paid and nonassessable and will not be subject
to preemptive rights, and (B) the Company will have conveyed
to the Underwriters good and valid title to the Shares. The
Shares, the other authorized capital stock of the Company, and
the Stock Options, in each
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case, conform as to legal matters in all material respects to
the descriptions thereof contained in the Registration
Statement and the Prospectus.
(iv) To the best of such counsel's knowledge, the
Company has no directly or indirectly held subsidiary other
than the Bank.
(v) The certificates evidencing the Shares (A) are in
the form approved by the Board of Directors of the Company,
(B) comply with the Restated Articles of Incorporation and
by-laws of the Company, and (C) comply as to form, and in all
other material respects, with applicable legal requirements.
(vi) This Agreement has been duly and validly
authorized, executed and delivered by the Company.
(vii) To the best of such counsel's knowledge, there
are no (A) contracts or other documents that are required to
be filed as exhibits to the Registration Statement other than
those filed as exhibits thereto, (B) legal or governmental
proceedings pending or threatened against the Company or the
Bank, and (C) statutes or regulations applicable to the
Company or the Bank, or certificates, permits, consents,
approvals, orders, licenses or authorizations from regulatory
officials or bodies that are required to be obtained or
maintained by the Company or the Bank, in any case that are of
a character required to be disclosed in the Registration
Statement and Prospectus that have not been so disclosed.
(viii) The statements in the Registration Statement
and the Prospectus, insofar as they are descriptions of
corporate documents, stock option plans, contracts,
agreements, laws, regulations or regulatory requirements, or
insofar as they constitute statements of law or legal
conclusions, are correct in all material respects.
(ix) To the best of such counsel's knowledge, neither
the execution, delivery and performance by the Company of this
Agreement nor the consummation by the Company of the
transactions herein contemplated will (A) give rise to a right
to terminate, or accelerate the due date of any payment due
under, or conflict with, or result in a breach of any of the
terms or provisions of, or constitute a default (or an event
which, with notice or lapse of time, or both, would constitute
a default) under, or require any consent under, or result in
the execution or imposition of any lien, charge or encumbrance
upon any properties or assets of the Company or the Bank
pursuant to the terms of, any lease, indenture, mortgage, note
or other agreement or instrument to which the Company or the
Bank is a party or by which either of them or either of
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their properties or assets is bound, or (B) result in any
violation of the provisions of the articles of incorporation
or by-laws of the Company or the Bank or of any statute,
order, rule or regulation applicable to the Company or the
Bank of any court or any federal, state, local or other
regulatory authority or governmental body, the effect of
which, in any such case referred to in this paragraph (ix),
would be expected to be materially adverse to the Company or
the Bank.
(x) To the best of such counsel's knowledge, no
consent, approval, authorization or order of any court or
governmental agency or body, domestic or foreign, is required
to be obtained by the Company in connection with the execution
and delivery by the Company of this Agreement or with the sale
of the Shares to the Underwriters as contemplated by this
Agreement, except those that have been obtained or those that
may be required under state "blue sky" laws.
(xi) To the best of such counsel's knowledge, neither
the Company nor the Bank is (A) in breach of, or in default
(and no event has occurred which, with notice or lapse of
time, or both, would constitute a default) under, any lease,
indenture, mortgage, note or other agreement or instrument to
which the Company or the Bank, as the case may be, is a party
or (B) in violation of any term or provision of either of
their articles of incorporation or by-laws or of any
franchise, license, grant, permit, judgment, decree or order
applicable to them.
(xii) The Registration Statement and the Prospectus
(other than the financial statements and other financial
information included therein, as to which no opinion or belief
need be expressed), as of the effective date of the
Registration Statement, appeared on their face to be
appropriately responsive in all material respects to the
applicable requirements of the Securities Act and the Rules.
(xiii) The Registration Statement has become
effective under the Securities Act and, to the best of such
counsel's knowledge, no proceedings for a stop order are
pending or threatened under the Securities Act.
In rendering the foregoing opinion, such counsel may rely upon
certificates of public officials (as to matters of fact and law) and
officers of the Company (as to matters of fact), and include
qualifications in its opinion as are reasonably acceptable to the
Underwriters. Copies of all such certificates shall be furnished to
counsel to the Underwriters on the Closing Date.
In addition, such counsel shall state that they have
participated in conferences with officers of the Company and a
representative of the Underwriters at
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which the contents of the Registration Statement and Prospectus and
related matters were discussed and although such counsel did not
independently verify the accuracy or completeness of the statements
made in the Registration Statement and Prospectus and does not assume
any responsibility for the accuracy or completeness of the statements
in the Registration Statement and Prospectus, on the basis of the
foregoing, nothing has come to the attention of such counsel that would
lead them to believe that the Registration Statement or Prospectus, as
amended or supplemented, if amended or supplemented, contains any
untrue statement of a material fact or omits a material fact required
to be stated therein or necessary to make the statements therein not
misleading; except that such statement may exclude financial
statements, financial data, and statistical information included in the
Registration Statement and Prospectus.
(c) On or prior to each Closing Date, the Underwriters shall
have been furnished such documents, certificates and opinions as they
may reasonably require for the purpose of enabling them to review the
matters referred to in subsection (b) of this Section 5, and in order
to evidence the accuracy, completeness or satisfaction of the
representations, warranties or conditions herein contained.
(d) Prior to each Closing Date, (i) there shall have been no
material adverse change in the condition or prospects, financial or
otherwise, of the Company or the Bank; (ii) there shall have been no
material transaction, not in the ordinary course of business, entered
into by the Company or the Bank except as set forth in the Registration
Statement and Prospectus, other than transactions referred to or
contemplated therein or to which the Underwriters have given their
written consent; (iii) neither the Company nor the Bank shall be in
default (nor shall an event have occurred which, with notice or lapse
of time, or both, would constitute a default) under any provision of
any material agreement, understanding or instrument relating to any
outstanding indebtedness that is material in amount; (iv) no action,
suit or proceeding, at law or in equity, shall be pending or threatened
against the Company or the Bank before or by any court or Federal,
state or other commission, board or other administrative agency having
jurisdiction over the Company or the Bank, as the case may be, which is
expected to have a material adverse effect on the Company or the Bank;
and (v) no stop order shall have been issued under the Securities Act
with respect to the Registration Statement and no proceedings therefor
shall have been initiated or be threatened by the Commission.
(e) At each Closing Date, the Underwriters shall have received
a certificate signed by the President and another officer of the
Company dated the Firm Shares Closing Date or Optional Shares
Closing Date, as the case may be, to the effect that the conditions set
forth in subsection (d) above have been satisfied and as to the
accuracy, as of the Firm Shares Closing Date or the Optional Shares
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Closing Date, as the case may be, of the representations and warranties
of the Company set forth in Section 4 hereof.
(f) At or prior to each Closing Date, the Underwriters shall
have received a "blue sky" memorandum of Xxxxxxxx Xxxxxx Xxxxxxxx and
Xxxx, counsel for the Underwriters, addressed to the Underwriters and
in form and scope reasonably satisfactory to the Underwriters,
concerning compliance with the blue sky or securities laws of the
states listed in Exhibit B attached to this Agreement.
(g) All proceedings taken in connection with the sale of the
Shares as herein contemplated shall be reasonably satisfactory in form
and substance to the Underwriters and to counsel for the Underwriters,
and the Underwriters shall have received from counsel for the
Underwriters a favorable opinion, dated as of each Closing Date, with
respect to such of the matters set forth under subsections (b) (i),
(iii), (vi), and (xiii) of this Section 5, and with respect to such
other related matters as the Underwriters may reasonably require, if
the failure to receive a favorable opinion with respect to such other
related matters would cause the Underwriters to deem it inadvisable to
proceed with the sale of the Shares.
(h) There shall have been duly tendered to the Underwriters
certificates representing all the Shares agreed to be sold by the
Company on the Firm Shares Closing Date or the Optional Shares Closing
Date, as the case may be.
(i) No order suspending the sale of the Shares prior to each
Closing Date, in any jurisdiction listed in Exhibit B, shall have been
issued on the Firm Shares Closing Date or the Optional Shares Closing
Date, as the case may be, and no proceedings for that purpose shall
have been instituted or, to the Underwriters' knowledge or that of the
Company, shall be contemplated.
(j) The NASD, upon review of the terms of the public offering
of the Shares, shall not have objected to the Underwriters'
participation in the same.
If any condition to the Underwriters' obligations hereunder to
be fulfilled prior to or at the Firm Shares Closing Date or the Optional Shares
Closing Date, as the case may be, is not so fulfilled, the Underwriters may
terminate this Agreement pursuant to Section 9(b) hereof or, if the Underwriters
so elect, waive any such conditions which have not been fulfilled or extend the
time of their fulfillment.
6. COVENANTS.
The Company covenants and agrees that it will:
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(a) Use its best efforts to cause the Registration Statement
to become effective and will notify the Underwriters immediately, and
confirm the notice in writing, (i) when the Registration Statement and
any post-effective amendment thereto becomes effective, (ii) of the
issuance by the Commission of any stop order or of the initiation, or
the threatening, of any proceedings for that purpose and (iii) of the
receipt of any comments from the Commission. The Company will make
every reasonable effort to prevent the issuance of a stop order, and,
if the Commission shall enter a stop order at any time, the Company
will make every reasonable effort to obtain the lifting of such order
at the earliest possible moment.
(b) During the time when a prospectus is required to be
delivered under the Securities Act, comply so far as it is able with
all requirements imposed upon it by the Securities Act, as now and
hereafter amended, and by the Rules, as from time to time in force, so
far as necessary to permit the continuance of sales of or dealings in
the Shares. If at any time when a prospectus relating to the Shares is
required to be delivered under the Securities Act any event shall have
occurred as a result of which, in the reasonable opinion of counsel for
the Company or counsel for the Underwriters, the Registration Statement
or Prospectus as then amended or supplemented includes an untrue
statement of a material fact or omits to state any material fact
required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made,
not misleading, or if it is necessary at any time to amend or
supplement the Registration Statement or Prospectus to comply with the
Securities Act, the Company will notify the Underwriters promptly and
prepare and file with the Commission an appropriate amendment or
supplement in form satisfactory to the Underwriters. The cost of
preparing, filing and delivering copies of such amendment or supplement
shall be paid by the Company.
(c) Deliver to the Underwriters such number of copies of each
preliminary prospectus as may reasonably be requested by the
Underwriters and, as soon as the Registration Statement, or any
amendment or supplement thereto, becomes effective, deliver to the
Underwriters three signed copies of the Registration Statement,
including exhibits, and all post-effective amendments thereto and
deliver to the Underwriters such number of copies of the Prospectus,
the Registration Statement and supplements and amendments thereto, if
any, without exhibits, as the Underwriters may reasonably request.
(d) Endeavor in good faith, in cooperation with the
Underwriters and their counsel, at or prior to the time the
Registration Statement becomes effective, to qualify the Shares for
offering and sale under the securities laws relating to the offering or
sale of the Shares of the states listed in Exhibit B. In each
jurisdiction where such qualification shall be effected, the Company
will, unless the Underwriters agree that such action is not at the time
necessary or advisable, file and make such statements or reports at
such times as are or may reasonably be
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required by the laws of such jurisdiction, provided that in connection
therewith, the Company shall not be required to qualify as a foreign
corporation or to file a general consent to service of process in any
jurisdiction. The Company will advise the Underwriters promptly of the
suspension of the qualification of the Shares for offering, sale or
trading in any jurisdiction, or any initiation or threat of any
proceeding for such purpose, and in the event of the issuance of any
order suspending such qualification, the Company, with the cooperation
of the Underwriters, will use all reasonable efforts to obtain the
withdrawal thereof.
(e) Furnish its security holders as soon as practicable an
earnings statement (which need not be certified by independent
certified public accountants unless required by the Securities Act or
the Rules) covering a period of at least twelve months beginning after
the effective date of the Registration Statement, which shall satisfy
the provisions of Section 11(a) of the Securities Act and the Rules
thereunder.
(f) For a period of three years from the Effective Date,
furnish to its shareholders annual audited consolidated financial
statements with respect to the Company including balance sheets and
income statements and make available to its shareholders upon request
quarterly unaudited consolidated financial statements with respect to
the Company including balance sheets and income statements.
(g) For a period of three years from the Effective Date,
furnish to the Underwriters the following:
(i) at the time they have been sent to shareholders
of the Company or filed with the Commission three copies of
each annual, quarterly, interim, or current financial and
other report or communication sent by the Company to its
shareholders or filed with the Commission;
(ii) as soon as practicable, three copies of every
press release and every material news item and article in
respect of the Company or the affairs of the Company which was
released by the Company;
(iii) all other information reasonably requested by
the Underwriters with respect to the Company to comply with
Rule 15c2-11 of the Rules; and
(iv) such additional documents and information with
respect to the Company and its affairs as the Underwriters may
from time to time reasonably request.
(h) Acquire all of the Bank's outstanding capital stock, free
and clear of all liens, encumbrances, or other claims or restrictions
whatsoever, for not less
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than $15,000,000 from the proceeds of the offering and, in all other
material respects, apply the net proceeds from the offering in the
manner set forth under "Use of Proceeds" in the Prospectus.
(i) Not file any amendment or supplement to the Registration
Statement or Prospectus after the effective date of the Registration
Statement to which the Underwriters shall reasonably object in writing
after being furnished a copy thereof.
(j) Comply with all registration, filing and reporting
requirements of the Securities Act or the Exchange Act, which may from
time to time be applicable to the Company.
(k) Give advance written notice to the DFI of the Bank's
projected opening date, and in all other respects use reasonable
efforts to comply with the requirements of, and satisfy the conditions
of, the DFI Order, FDIC Order, FRB Order and the Holding Company
Approval, which are required to be complied with prior to the Bank
commencing the business of banking; provided, however, that it shall
not be a breach of this Section 6(k) for the Company or the Bank to
fail to maintain any specified level of capital, surplus, capital
ratio, valuation reserve or financial or operating performance after
the Bank has commenced the business of banking or to fail to satisfy
any such requirement or condition if such failure is waived or
performance of such requirement or condition is accepted as sufficient
by the DFI, the FDIC, and/or the FRB, as applicable.
(l) Pay, or reimburse if paid by the Underwriters, whether or
not the transactions contemplated hereby are consummated or this
Agreement is terminated, all costs and expenses incident to the
performance of the obligations of the Company under this Agreement,
including those relating to (1) the preparation, printing, filing and
delivery of the Registration Statement, including all exhibits thereto,
each preliminary prospectus, the Prospectus, all amendments of and
supplements to the Registration Statement and the Prospectus, and the
photocopying of the Underwriting Agreement and related agreements
including, without limitation, the Dealer Agreement; (2) the issuance
of the Shares and the preparation and delivery of certificates for the
Shares to the Underwriters; (3) the registration or qualification of
the Shares for offer and sale under the securities or "blue sky" laws
of the various jurisdictions referred to in Exhibit B, including the
fees and disbursements of counsel in connection with such registration
and qualification and the preparation and printing of preliminary,
supplemental, and final blue sky memoranda; (4) the furnishing
(including costs of shipping and mailing) to the Underwriters of copies
of each preliminary prospectus, the Prospectus and all amendments of or
supplements to the Prospectus, and of the several documents required by
this Section to be so furnished; (5) the filing requirements and fees
of the NASD in connection with its review of the terms of the public
offering and the underwriting; (6) the furnishing (including costs of
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shipping and mailing) of copies of all reports and information required
by Section 6(g); (7) all transfer taxes, if any, with respect to the
sale and delivery of the Shares by the Company to the Underwriters; (8)
the inclusion of the Shares on the OTC Bulletin Board; and (9) the
Underwriters' out-of-pocket expenses, including without limitation,
road show expenses and legal fees of counsel to the Underwriters (such
out-of-pocket expenses and legal fees payable by the Company shall not
exceed $50,000). Upon a successful completion of the offering, the
Underwriters will credit the out-of-pocket and legal fee reimbursement
described in Section 6(l)(9) against the underwriting discount.
(m) Not, without the prior written consent of the
Underwriters, sell, contract to sell or grant any option for the sale
of or otherwise dispose of, directly or indirectly, or register with
the Commission, any shares of Common Stock of the Company (or any
securities convertible into or exercisable for such shares of Common
Stock) within 180 days after the date of the Prospectus, except as
provided in this Agreement and except for grants and exercises of Stock
Options under the Stock Option Plan as described in the Prospectus.
(n) For not less than 3 fiscal years after the Effective Date,
unless the Underwriters shall otherwise consent in writing, (i) timely
file with the Commission all reports required by Section 15(d) of the
Exchange Act and not seek suspension of the duty to file such reports,
and (ii) not less frequently than annually prepare a proxy statement
and annual report which conform substantially to the requirements of
Commission Regulation 14A and distribute such proxy statement and
annual report to record and beneficial owners substantially in the
manner which would be required by Commission Regulation 14A if
applicable.
(o) Use its best efforts to cause itself and the Bank to
commence their businesses as described in the Prospectus not later than
__________, 1999.
7. INDEMNIFICATION.
(a) The Company agrees to indemnify and hold harmless the
Underwriters and each person, if any, who controls the Underwriters
within the meaning of Section 15 of the Securities Act or Section 20 of
the Exchange Act against any and all losses, claims, damages and
liabilities, joint or several (including any reasonable investigation,
legal and other expenses incurred in connection with, and any amount
paid in settlement (subject to the exception contained in the last
sentence of Section 7(c)) of, any action, suit or proceeding or any
claim asserted), to which they may become subject under the Securities
Act, the Exchange Act or other Federal or state statutory law or
regulation, at common law or otherwise, insofar as such losses, claims,
damages or liabilities arise out of or are based upon any untrue
statement or alleged untrue statement of a material fact contained in
any preliminary prospectus, the Registration Statement or the
Prospectus or any amendment thereof or supplement thereto, or arise out
of or are
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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; provided, however, that such indemnity shall
not inure to the benefit of the Underwriters (or any person controlling
the Underwriters) on account of any losses, claims, damages or
liabilities arising from the sale of the Shares in the public offering
to any person by the Underwriters if such untrue statement or omission
or alleged untrue statement or omission was made in such preliminary
prospectus, the Registration Statement or the Prospectus, or such
amendment or supplement, in reliance upon and in conformity with
information furnished in writing to the Company by or on behalf of the
Underwriters through Xxxxx Capital Markets specifically for use
therein; and provided, further, that such indemnity shall not inure to
the benefit of any Underwriter (or any person controlling any
Underwriter) to the extent that any such loss, claim, damage or
liability of such Underwriter results from the fact that a copy of the
Prospectus as then amended or supplemented was not sent or given to any
person at or prior to the written confirmation of the sale of Shares to
such person in any case where such delivery is required by the
Securities Act if the Company previously had furnished copies thereof
to such Underwriter and the loss, claim, damage or liability of such
Underwriter results from an untrue statement or omission or alleged
untrue statement or omission of a material fact contained in the
preliminary prospectus which was corrected in the Prospectus as so
amended or supplemented. The Company shall not be liable hereunder to
the Underwriters (or any controlling person thereof) to the extent that
any loss, claim, damage or other liability incurred by the Underwriters
arises from the Underwriters' fraudulent act or omission.
(b) The Underwriters agree to indemnify and hold harmless the
Company, each person, if any, who controls the Company within the
meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act, each director of the Company and each officer of the
Company who signs the Registration Statement, to the same extent as the
foregoing indemnity from the Company to the Underwriters, but only
insofar as such losses, claims, damages or liabilities arise out of or
are based upon any untrue statement or omission or alleged untrue
statement or omission which was made in any preliminary prospectus, the
Registration Statement or the Prospectus, or any amendment thereof or
supplement thereto, in reliance upon and in conformity with information
furnished in writing to the Company by the Underwriters through Xxxxx
Capital Markets specifically for use therein. The Underwriters shall
not be liable hereunder to the Company (including any controlling
person, director or officer thereof) to the extent that any loss,
claim, damage or other liability incurred by the Company arises from a
fraudulent act or omission by the Company.
(c) Any party that proposes to assert the right to be
indemnified under this Section will, promptly after receipt of notice
of commencement of any action, suit or proceeding against such party in
respect of which a claim is to be made
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against an indemnifying party or parties under this Section, notify
each such indemnifying party of the commencement of such action, suit
or proceeding, enclosing a copy of all papers served, but the omission
so to notify such indemnifying party of any such action, suit or
proceeding shall not relieve it from any liability that it may have to
any indemnified party otherwise than under this Section. In case any
such action, suit or proceeding 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 in, and, to the extent that it shall wish, jointly with any
other indemnifying party similarly notified, to assume the defense
thereof, with counsel reasonably satisfactory to such indemnified
party, and after notice from the indemnifying party to such indemnified
party of its election so to assume the defense thereof and the approval
by the indemnified party of such counsel, the indemnifying party shall
not be liable to such indemnified party for any legal or other
expenses, except as provided below and except for the reasonable costs
of investigation subsequently incurred by such indemnified party in
connection with the defense thereof. The indemnified party shall have
the right to employ its counsel in any such action, but the fees and
expenses of such counsel shall be at the expense of such indemnified
party unless (1) the employment of counsel by such indemnified party
has been authorized in writing by the indemnifying parties, (2) the
indemnified party shall have reasonably concluded that, because of the
existence of different or additional defenses available to the
indemnified party or of other reasons, there may be a conflict of
interest between the indemnifying parties and the indemnified party in
the conduct of the defense of such action (in which case the
indemnifying parties shall not have the right to direct the defense of
such action on behalf of the indemnified party) or (3) the indemnifying
parties shall not have employed counsel to assume the defense of such
action within a reasonable time after notice of the commencement
thereof, in each of which cases the fees and expenses of counsel shall
be at the expense of the indemnifying parties. An indemnifying party
shall not be liable for any settlement of any action, suit, proceeding
or claims effected without its written consent.
8. CONTRIBUTION. In order to provide for just and equitable
contribution in circumstances in which the indemnification provided for in
Section 7(a) or 7(b) is due in accordance with its terms but for any reason is
held to be unavailable, the Company and the Underwriters shall contribute to the
aggregate losses, claims, damages and liabilities (including any investigation,
legal and other expenses reasonably incurred in connection with, and any amount
paid in settlement (subject to the exception contained below in this Section 8)
of, any action, suit or proceeding or any claims asserted, but after deducting
any contribution received from other persons) to which the Company and the
Underwriters may be subject, in such proportion as is appropriate to reflect the
relative benefits received by the Company, on the one hand, and the
Underwriters, on the other hand, from the offering of the Shares, as well as the
relative fault of the Company, on the one hand, and the Underwriters, on the
other hand, in connection with the statements or omissions that resulted in such
losses, claims, damages or liabilities, as well as any other relevant equitable
considerations. The relative benefits received
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by the Company, on the one hand, and the Underwriters, on the other hand, shall
be deemed to be in the same proportion as the total net proceeds from the
offering received by the Company 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, on the one hand,
or the Underwriters, on the other hand, and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission, including, with respect to any Underwriter, the extent to
which such losses, claims, damages or liabilities result from the fact that a
copy of the Prospectus as then amended or supplemented was not sent or given to
any person at or prior to the written confirmation of the sale of Shares to such
person in any case where such delivery was required by the Securities Act, if
the Company previously had furnished copies thereof to such Underwriter and the
loss, claim, damage or liability resulted from an untrue statement or omission
or alleged untrue statement or omission of a material fact contained in the
preliminary prospectus which was corrected in the Prospectus as so amended or
supplemented. The amount paid or payable by an indemnified party as a result of
the losses, claims, damages or liabilities referred to above in this Section 8
shall be deemed to include any legal or other expenses reasonably incurred by
such indemnified party in connection with investigating, preparing for or
defending against any such action or claim. Notwithstanding the provisions of
this Section 8, no Underwriter shall be required to contribute any amount in
excess of the amount 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 that such Underwriter otherwise has been required to pay
by reason of such untrue or alleged untrue statement or omission or alleged
omission and no person found guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations in this Section 8 to contribute
are several in proportion to their respective underwriting obligations and not
joint. For purposes of this Section, each person, if any, who controls the
Underwriters within the meaning of the Securities Act or the Exchange Act shall
have the same rights to contribution as the Underwriters, and each person, if
any, who controls the Company within the meaning of the Securities Act or the
Exchange Act, each officer and each director of the Company shall have the same
rights to contribution as the Company. Any party entitled to contribution will,
promptly after receipt of notice of commencement of any action, suit or
proceeding against such party in respect of which a claim for contribution may
be made against another party or parties under this Section, notify such party
or parties from whom contribution may be sought, but the omission so to notify
such party or parties from whom contribution may be sought shall not relieve the
party or parties from whom contribution may be sought from any other obligation
it or they may have hereunder or otherwise than under this Section. No party
shall be liable for contribution with respect to any action, suit, proceeding or
claim settled without its written consent.
9. TERMINATION. This Agreement may be terminated by the
Underwriters by notifying the Company at any time:
(a) at or before any Closing Date if, in the judgment of the
Underwriters, payment for and delivery of the Shares is rendered
impracticable or
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inadvisable because (1) additional material governmental restrictions,
not known to be in force and effect when this Agreement is signed,
shall have been imposed upon trading in securities generally or minimum
or maximum prices shall have been generally established on the New York
Stock Exchange, on the American Stock Exchange or on the
over-the-counter market, or trading in securities generally shall have
been suspended on either such Exchange or on the over-the-counter
market or a general banking moratorium shall have been established by
federal, New York, Michigan or Indiana authorities, (2) a war or other
calamity shall have occurred or shall have accelerated to such an
extent as to affect adversely the marketability of the Shares, (3) the
Company or the Bank shall have sustained a material loss by fire,
flood, accident, hurricane, earthquake, theft, sabotage or other
calamity or malicious act, which, whether or not said loss shall have
been insured, will in the Underwriters' opinion, make it inadvisable to
proceed with the offering of the Shares, (4) the DFI Order, FDIC Order,
FRB Order or Holding Company Approval shall have been withdrawn or
materially altered, or notice shall have been received to the effect
that any of such approvals will not be received, or, if received, will
be subject to conditions that the Company would not be able to fulfill
in a reasonable time in the Underwriters' reasonable opinion, (5) in
the Underwriters' reasonable opinion it is not probable that the
Company and Bank will be able to commence business before _________,
1999, for any reason, or (6) there shall have been such material change
in the condition, business operations or prospects of the Company or
the market for the Shares or similar securities as in the Underwriters'
judgment would make it inadvisable to proceed with the offering of the
Shares; or
(b) at or before any Closing Date, if any of the conditions
specified in Section 5 or any other agreements, representations or
warranties of the Company in this Agreement shall not have been
fulfilled when and as required by this Agreement.
If this Agreement is terminated pursuant to any of its provisions, except as
otherwise provided in this Agreement, the Company shall not be under any
liability to the Underwriters (other than for obligations assumed in Section
6(l) hereof), and the Underwriters shall not be under any liability to the
Company; provided, however, that if this Agreement is terminated by the
Underwriters because of any failure, refusal or inability on the part of the
Company to comply with the terms or to fulfill any of the conditions of this
Agreement, or for any reasons provided in subparagraphs (a) and (b) above, the
Company will reimburse the Underwriters for all accountable out-of-pocket
expenses (including, without limitation, road show expenses and fees and
disbursements of counsel to the Underwriters) up to a maximum of $50,000
(including the $20,000 advance below) incurred by them in connection with the
proposed purchase and sale of the Shares or in contemplation of performing their
obligations hereunder. The Underwriters acknowledge receipt of a $20,000 advance
from the Company. If this Agreement is terminated for any reason, the
Underwriters shall be entitled to retain such advance as reimbursement for its
accountable out-of-pocket expenses; provided, however, in the event that the
accountable out-of-pocket expenses to be reimbursed under this paragraph are
less than $20,000, the Underwriters
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shall pay such difference to the Company. If this Agreement is not terminated,
the $20,000 shall be credited at closing against the underwriting discount.
10. REPRESENTATIONS AND AGREEMENTS TO SURVIVE DELIVERY. All
representations, warranties and agreements contained in this Agreement shall be
deemed to be representations, warranties and agreements at the Closing Dates,
and the respective representations, warranties and agreements of the Company and
the Underwriters, including, without limitation, the payment and reimbursement
agreements contained in Section 6(l) hereof, the indemnity and contribution
agreements contained in Sections 7 and 8 hereof and the agreements contained in
this Section 10, shall remain operative and in full force and effect regardless
of any investigation made by or on behalf of the Underwriters or any controlling
person of any Underwriter, or by or on behalf of the Company or any officer or
director or controlling person of the Company, and shall survive delivery of the
Shares to and payment for the Shares by the Underwriters pursuant to this
Agreement. In addition, the payment and reimbursement agreements contained in
Section 6(l) hereof, the indemnity and contribution agreements contained in
Sections 7 and 8 hereof and the agreements contained in this Section 10 shall
survive termination of this Agreement.
11. MISCELLANEOUS. This Agreement has been and is made for the benefit
of the Underwriters, the Company and their respective successors and assigns,
and, to the extent expressed herein, for the benefit of persons controlling the
Underwriters or the Company, and directors and certain officers of the Company,
and their respective successors and assigns, and no other person, partnership,
association or corporation shall acquire or have any right under or by virtue of
this Agreement. The term "successors and assigns" shall not include any
purchaser of Shares from the Underwriters merely because of such purchase.
All notices and communications hereunder shall be in writing and
mailed or delivered or by telephone or telegraph, if subsequently confirmed in
writing, to the Underwriters, care of Xxxxx Capital Markets, at Xxx Xxxxxxxx,
Xxxxxxx, Xxxxxxxx 00000 (facsimile No. (000) 000-0000) (with a copy to Xxxxxx X.
Xxxx, Xxxxxxxx Xxxxxx Xxxxxxxx and Xxxx, 0000 Xxxxx Xxxxxxxx Xxxxxxxx, Xxxxxxx,
Xxxxxxxx 00000 (facsimile No. (000) 000-0000)); and to the Company at 000 Xxxx
Xxxxx Xxxxxx, Xxxxx ___, Xxxx Xxxxx, Xxxxxxx 00000, Attention: Xxxxxx X.
Xxxxxxxx, President and Chief Executive Officer (with a copy to Xxxxxx X.
Xxxxxxx, Xxxxx & Xxxxxxx, 000 Xxxxx Xxxxxxxx Xxxxxx, Xxxxx 0000, Xxxxxxxxxxxx,
Xxxxxxx 00000 (facsimile No. (000) 000-0000).
The laws of the State of Michigan shall govern this Agreement, its
construction, and the determination of any rights, duties or remedies of the
parties arising out of or relating to this Agreement.
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Please confirm that the foregoing correctly sets forth the agreement
between us.
Very truly yours,
TOWER FINANCIAL CORPORATION
By:
----------------------------------
Xxxxxx X. Xxxxxxxx
Its: Chief Executive Officer
Accepted as of the date hereof:
XXXXX CAPITAL MARKETS,
a division of First Chicago Capital Markets, Inc.
By:
---------------------------
Xxxx X. Xxxxxxxx
Managing Director
XXXXXXXX INVESTMENTS INC.
By:
---------------------------
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SCHEDULE I
TOTAL NUMBER OF NUMBER OF OPTION SHARES TO
SHARES TO BE BE PURCHASED IF MAXIMUM
UNDERWRITERS PURCHASED OPTION IS EXERCISED
---------------- ----------------------------
Xxxxx Capital Markets.......................... 1,100,000 165,000
XxXxxxxx Investments Inc....................... 900,000 135,000
--------- -------
Total 2,000,000 300,000
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EXHIBIT A
Number Relationship
of of Person to
Name Shares to the Company
---- -------- -----------------
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EXHIBIT B
States
Florida
Illinois
Indiana
Iowa
Kentucky
Michigan
Minnesota
Missouri
New York
Ohio
Pennsylvania
Wisconsin
