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XXXXX REALTY INVESTORS, INC.
1,500,000 Shares of Common Stock
UNDERWRITING AGREEMENT
_____________, 1998
XXXXX & CO., L.L.C.
FIRST OF MICHIGAN CORPORATION
As Representatives of the Several
Underwriters Named in Schedule 3
c/x Xxxxx & Co., L.L.C.
Xxx Xxxxxxxx
Xxxxxxx, Xxxxxxxx 00000
Ladies and Gentlemen:
Xxxxx Realty Investors, Inc., a Michigan corporation (the "Company"),
hereby confirms its agreement with Xxxxx & Co., L.L.C., First of Michigan
Corporation (the "Representatives") and the several Underwriters named in
Schedule 3 (the "Underwriters") as set forth below.
1. Securities. Subject to the terms and conditions herein
contained, the Company proposes to issue and sell to the Underwriters an
aggregate of 1,5000,000 shares (the "Firm Shares") of its Common Stock (the
"Common Stock"). The Company also proposes to issue and sell to the
Underwriters not more than an aggregate of 225,000 shares of additional
Common Stock if requested by the Underwriters as provided in Section 3 of this
Agreement. Any and all Common Stock to be purchased by the Underwriters
pursuant to such option is referred to in this Agreement as the "Option
Shares," and the Firm Shares and any Option Shares are collectively referred to
in this Agreement as the "Shares."
2. Representations and Warranties of the Company. The Company
represents and warrants to, and agrees with, each of the Underwriters that:
(a) The Company meets the requirements for use of Form S-2
under the Securities Act of 1933, as amended, and the rules and regulations of
the Securities and Exchange Commission (the "Commission") thereunder
(collectively, the "Act"). A registration statement on such Form (File No.
333-________) with respect to the Shares of the Company, including a prospectus
subject to completion, has been prepared and filed by the Company with the
Commission in accordance with the provisions of the Act, and one or more
amendments to such registration statement may have been so filed. As soon as
practicable after the execution of this Agreement, the Company will file with
the Commission either (1) if such registration statement, as it may have been
amended, has been declared by the Commission to be effective under the
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Act, a prospectus in the form most recently included in an amendment to such
registration statement (or, if no such amendment shall have been filed, in such
registration statement), with such changes or insertions as are required by
Rule 430A under the Act or permitted by Rule 424(b) under the Act and as have
been provided to and approved by the Underwriters prior to the execution of
this Agreement, or (2) if such registration statement, as it may have been
amended, has not been declared by the Commission to be effective under the Act,
an amendment to such registration statement, including a form of prospectus, a
copy of which amendment has been furnished to and approved by the Underwriters
prior to the execution of this Agreement. As used in this Agreement, the term
"Registration Statement" means such registration statement, as amended at the
time when it was or is declared effective, and, in the event of any amendment
to such registration statement after the effective date and before the Firm
Closing Date and any Option Closing Date (as defined in Sections 3(a) and 3(b),
respectively), such registration statement as so amended, but only from and
after the effectiveness of such amendment, including (1) all financial
statements, schedules and exhibits thereto, (2) all documents (or portions
thereof) incorporated by reference therein filed under the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), and (3) any information omitted
therefrom pursuant to Rule 430A under the Act and included in the Prospectus
(as hereinafter defined). As used in this Agreement, the term "Preliminary
Prospectus" means each prospectus subject to completion filed with such
registration statement or any amendment thereto (including the prospectus
subject to completion, if any, included in the Registration Statement or any
amendment thereto at the time it was or is declared effective), including all
documents (or portions thereof) incorporated by reference therein filed under
the Exchange Act. As used in this Agreement, the term "Prospectus" means the
prospectus first filed with the Commission pursuant to Rule 424(b) under the
Act or, if no prospectus is required to be filed pursuant to said Rule 424(b),
such term means the prospectus included in the Registration Statement, at the
time the Registration Statement or any amendment thereto became effective, and,
in the event of any supplement or amendment to such prospectus before the Firm
Closing Date and any Option Closing Date, such prospectus as so supplemented or
amended but only from and after the filing with the Commission of such
supplement or the effectiveness of such amendment, in any case including all
documents (or portions thereof) incorporated by reference therein filed under
the Exchange Act.
(b) The Commission has not issued any order preventing or
suspending the use of any Preliminary Prospectus. When any Preliminary
Prospectus was filed with the Commission, it (1) contained all statements
required to be stated therein in accordance with, and complied in all material
respects with the requirements of, the Act, the Exchange Act and the respective
rules and regulations of the Commission thereunder and (2) did not include any
untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. When the
Registration Statement or any amendment thereto was or is declared effective
and at all times subsequent thereto up to and including the Firm Closing Date
and any Option Closing Date, it (1) contained or will contain all statements
required to be stated therein in accordance with, and complied or will comply
in all material respects with the requirements of, the Act, the Exchange Act
and the respective rules and regulations of the Commission thereunder and (2)
did not or will not include any untrue statement of a material fact or omit to
state any material fact required to
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be stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. When the Prospectus
or any amendment or supplement thereto is filed with the Commission pursuant to
Rule 424(b) (or, if the Prospectus or such amendment or supplement is not
required to be so filed, when the Registration Statement or the amendment
thereto containing such amendment or supplement to the Prospectus was or is
declared effective), on the date when the Prospectus is otherwise amended or
supplemented and at all times subsequent thereto up to and including the Firm
Closing Date and any Option Closing Date (as defined in Sections 3(a) and 3(b),
respectively), the Prospectus, as amended or supplemented at any such time, (1)
contained or will contain all statements required to be stated therein in
accordance with, and complied or will comply in all material respects with the
requirements of, the Act, the Exchange Act and the respective rules and
regulations of the Commission thereunder and (2) did not or will not include
any untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. The foregoing
provisions of this paragraph (b) do not apply to statements or omissions made
in any Preliminary Prospectus, the Registration Statement or any amendment
thereto or the Prospectus or any amendment or supplement thereto in reliance
upon, and in conformity with, written information furnished to the Company by
you specifically for use therein.
(c) The Company's only subsidiaries are listed on Schedule 1
to this Agreement. The Company and each of its subsidiaries are validly
existing as corporations in good standing under the laws of their respective
jurisdictions of incorporation and are duly qualified to transact business as
foreign corporations and are in good standing under the laws of all other
jurisdictions where the ownership or leasing of their respective properties or
the nature or conduct of their respective businesses requires such
qualification, except where the failure to be so qualified would not have a
material adverse effect on the Company and its subsidiaries, taken as a whole.
(d) The Company and each of its subsidiaries have full power
(corporate and other) to own or lease their respective properties and conduct
their respective businesses as described in the Registration Statement and the
Prospectus or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus; and the Company has full power (corporate and other) to
enter into this Agreement and to carry out all the terms and provisions of this
Agreement to be carried out by it.
(e) The authorized, issued and outstanding shares of capital
stock of each of the Company's subsidiaries are set forth on Schedule 2 to this
Agreement. Such issued and outstanding shares have been duly authorized and
validly issued, are fully paid and nonassessable and are all owned beneficially
by the Company free and clear of all restrictions on transfer (other than those
imposed by the Act and the securities or Blue Sky laws of various
jurisdictions) and any security interests, liens, encumbrances, equities and
claims.
(f) The Company has an authorized, issued and outstanding
capitalization as set forth in the Prospectus or, if the Prospectus is not in
existence, the most recent Preliminary
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Prospectus, under the caption "Capitalization". All of the issued and
outstanding shares of capital stock of the Company have been duly authorized
and validly issued and are fully paid and nonassessable and free of preemptive
rights and contractual rights to purchase (to the extent the Company or any of
its subsidiaries is a party to such contract). No holder of outstanding shares
of capital stock of the Company is entitled as such to any preemptive or other
rights to subscribe for any of the Shares, and no holder of securities of the
Company has any right which has not been fully exercised or waived to require
the Company to register the offer or sale of any securities owned by such
holder under the Act in the public offering contemplated by this Agreement.
(g) The capital stock of the Company conforms to the
description thereof contained in the Registration Statement and the Prospectus
or, if the Prospectus is not in existence, the most recent Preliminary
Prospectus.
(h) The consolidated financial statements and schedules of the
Company and its consolidated subsidiaries included in the Registration
Statement and the Prospectus (or, if the Prospectus is not in existence, the
most recent Preliminary Prospectus) fairly present the financial condition of
the Company and its consolidated subsidiaries and the results of operations and
cash flows as of the dates and periods therein specified. Such financial
statements and schedules have been prepared in accordance with generally
accepted accounting principles consistently applied throughout the periods
involved (except as otherwise noted therein). The selected financial data set
forth under the caption "Selected Consolidated Financial Data" in the
Prospectus (or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus) fairly present, on the basis stated in the Prospectus
(or such Preliminary Prospectus), the information included therein.
(i) Deloitte & Touche LLP, which have certified certain
financial statements of the Company and its consolidated subsidiaries and
delivered their report with respect to the audited consolidated financial
statements and schedules included in the Registration Statement and the
Prospectus (or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus), are independent public accountants as required by the
Act, the Exchange Act and the related published rules and regulations
thereunder.
(j) The execution and delivery of this Agreement have been
duly authorized by the Company. This Agreement has been duly executed and
delivered by the Company, and assuming due execution by the other parties to
this Agreement, is the legal, valid and binding agreement of the Company,
enforceable by any such party against the Company in accordance with its terms,
except as (i) enforcement thereof may be limited by bankruptcy, insolvency,
reorganization or other similar laws affecting enforcement of creditors' rights
generally, (ii) enforcement thereof is subject to general principles of equity
(regardless of whether enforcement is considered in a proceeding in equity or
at law), and (iii) rights to indemnification may be limited by applicable law.
(k) No legal or governmental proceedings are pending or, to
the best of the Company's knowledge, threatened, to which the Company or any of
its subsidiaries is a party or
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to which the property of the Company or any of its subsidiaries is subject that
are required to be described in the Registration Statement or the Prospectus
and are not described therein (or, if the Prospectus is not in existence, the
most recent Preliminary Prospectus). No contract or other document is required
to be described in the Registration Statement or the Prospectus (or, if the
Prospectus is not in existence, the most recent Preliminary Prospectus) or to
be filed as an exhibit to the Registration Statement that is not described
therein or filed as required.
(l) The execution and delivery of this Agreement, the
issuance, offering and sale of the Shares to the Underwriters by the Company
pursuant to this Agreement, the compliance by the Company with the other
provisions of this Agreement and the consummation of the other transactions
contemplated by this Agreement do not (1) require the consent, approval,
authorization, registration or qualification of or with any governmental
authority, except such as have been obtained, such as may be required under
state securities or blue sky laws and, if the Registration Statement (as
amended) filed with respect to the Shares is not effective under the Act as of
the time of execution of this Agreement, such as may be required (and shall be
obtained as provided in this Agreement) under the Act, or (2) conflict with or
result in a breach or violation of any of the terms and provisions of, or
constitute a default under, any indenture, mortgage, deed of trust, lease or
other agreement or instrument to which the Company or any of its subsidiaries
is a party or by which the Company or any of its subsidiaries or any of their
respective properties are bound, or the Articles of Incorporation, bylaws or
other charter or governing documents of the Company or any of its subsidiaries,
or any statute or any judgment, decree, order, rule or regulation of any court
or other governmental authority or any arbitrator or any other laws applicable
to the Company, any of its subsidiaries or any of their respective properties.
(m) The Company has not, directly or indirectly, (1) taken any
action designed to cause or to result in, or that has constituted or which
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
the Shares or (2) since the filing of the registration statement originally
filed with respect to the Shares (A) sold (except for sales of Common Stock
upon exercise of stock options or warrants), bid for, purchased, or paid anyone
any compensation for soliciting purchases of, the Shares or (B) paid or agreed
to pay to any person any compensation for soliciting another to purchase any
other securities of the Company.
(n) Subsequent to the respective dates as of which information
is given in the Registration Statement and the Prospectus (or, if the
Prospectus is not in existence, the most recent Preliminary Prospectus), (1)
the Company and its subsidiaries have not incurred any material liability or
obligation, direct or contingent, nor entered into any material transaction not
in the ordinary course of business; (2) the Company has not purchased any of
its outstanding capital stock, nor declared, paid or otherwise made any
dividend or distribution of any kind on its capital stock; and (3) there has
not been any change in the capital stock (except for sales of Common Stock upon
exercise of stock options or warrants), short-term debt (other than as incurred
or repaid in the ordinary course of business) or long-term debt of the Company
and its consolidated subsidiaries or any material loss or damage to the
property of the Company or any
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of its subsidiaries, any material adverse change in the condition (financial or
otherwise), business, results of operations, cash flows or prospects of the
Company and its subsidiaries, taken as a whole, except in each case as
described in or contemplated by the Prospectus (or, if the Prospectus is not in
existence, the most recent Preliminary Prospectus).
(o) The Company and each of its subsidiaries have good and
marketable title in fee simple to all items of real property and good and
marketable title to all personal property owned by each of them or described in
the Prospectus as owned by them, in each case free and clear of any security
interests, liens, encumbrances, equities, claims, charges, restrictions and
other defects, except for those security interests, liens or encumbrances that
exist in connection with loans made by ___________ or ______________ and
reflected on the Company's financial statements included in the Prospectus, and
except such as do not, singly or in the aggregate, materially and adversely
affect the condition (financial or otherwise), business, prospects, net worth,
results of operations or cash flows of the Company and its subsidiaries or the
value of such property and do not interfere with the use made or proposed to be
made of such property by the Company or such subsidiary, and any real and
personal property and buildings held under lease by the Company or any such
subsidiary are held under valid, subsisting and enforceable leases, with such
exceptions as are not material and do not interfere with the use made or
proposed to be made of such property and buildings by the Company or such
subsidiary, in each case mentioned in this paragraph except as described in or
contemplated by the Prospectus (or, if the Prospectus is not in existence, the
most recent Preliminary Prospectus). The Company and its subsidiaries own or
lease all properties as are necessary to their respective operations as now
conducted and, except as otherwise stated in the Prospectus (or, if the
Prospectus is not in existence, the most recent Preliminary Prospectus), as
proposed to be conducted as set forth in the Prospectus.
(p) No labor dispute with the employees of the Company or any
of its subsidiaries exists or is threatened or imminent that could result in a
material adverse change in the condition (financial or otherwise), business
prospects, net worth, results of operations or cash flows of the Company and
its subsidiaries, except as described in or contemplated by the Prospectus (or,
if the Prospectus is not in existence, the most recent Preliminary Prospectus).
(q) The Company and its subsidiaries own or possess, or can
acquire on reasonable terms, all material patents, patent applications,
trademarks, service marks, trade names, licenses, copyrights and proprietary or
other confidential information currently employed by them in connection with
their respective businesses, and neither the Company nor any such subsidiary
has received any notice of infringement of or conflict with asserted rights of
any third party with respect to any of the foregoing which, singly or in the
aggregate, if the subject of an unfavorable decision, ruling or finding, is
expected to result in a material adverse change in the condition (financial or
otherwise), business prospects, net worth, results of operations or cash flows
of the Company and its subsidiaries, except as described in or contemplated by
the Prospectus (or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus). The expiration of any trademarks, copyrights or
patents held or used by the Company or any of its subsidiaries would not
materially adversely affect the condition (financial or otherwise), business
prospects, net
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worth, results of operations or cash flows of the Company and its subsidiaries,
except as described in or contemplated by the Prospectus (or, if the Prospectus
is not in existence, the most recent Preliminary Prospectus).
(r) The Company and each of its subsidiaries are insured by
insurers of recognized financial responsibility against such losses and risks
and in such amounts as are prudent and customary in the businesses in which
they are engaged. Neither the Company nor any such subsidiary has been refused
any insurance coverage sought or applied for, and neither the Company nor any
such subsidiary has any reason to believe that it will not be able to renew its
existing insurance coverage as and when such coverage expires or to obtain
similar coverage from similar insurers as may be necessary to continue its
business at a cost that would not materially and adversely affect the condition
(financial or otherwise), business prospects, net worth, results of operations
or cash flows of the Company and its subsidiaries, except as described in or
contemplated by the Prospectus (or, if the Prospectus is not in existence, the
most recent Preliminary Prospectus).
(s) Except as provided in loan agreements with the Company's
lenders, no subsidiary of the Company is currently prohibited, directly or
indirectly, from paying any dividends to the Company, from making any other
distribution on such subsidiary's capital stock, from repaying to the Company
any loans or advances to such subsidiary from the Company or from transferring
any of such subsidiary's property or assets to the Company or any other
subsidiary of the Company, except as described in or contemplated by the
Prospectus (or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus).
(t) The Company and its subsidiaries possess all certificates,
authorizations and permits issued by the appropriate federal, state or foreign
regulatory authorities which are material to the conduct of their respective
businesses, and neither the Company nor any such subsidiary has received any
notice of proceedings relating to the revocation or modification of any such
certificate, authorization or permit which, singly or in the aggregate, if the
subject of an unfavorable decision, ruling or finding, would result in a
material adverse change in the condition (financial or otherwise), business
prospects, net worth, results of operations or cash flows of the Company and
its subsidiaries, except as described in or contemplated by the Prospectus (or,
if the Prospectus is not in existence, the most recent Preliminary Prospectus).
(u) The Company will conduct its operations in a manner that
will not subject it to registration as an investment company under the
Investment Company Act of 1940, as amended, and this transaction will not cause
the Company to become an investment company subject to registration under such
Act.
(v) The Company has filed all foreign, federal, state and
local tax returns that are required to be filed or has requested extensions
thereof (except in any case in which the failure so to file would not have a
material adverse effect on the Company and its subsidiaries) and has paid all
taxes required to be paid by it and any other assessment, fine or penalty
levied against it, to the extent that any of the foregoing is due and payable,
except for any such
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assessment, fine or penalty that is currently being contested in good faith or
as described in or contemplated by the Prospectus (or, if the Prospectus is not
in existence, the most recent Preliminary Prospectus).
(w) Neither the Company nor any of its subsidiaries is in
material violation of any federal, state or foreign law or regulation relating
to occupational safety and health or to the storage, handling or transportation
of hazardous or toxic materials, and the Company and its subsidiaries have
received all permits, licenses or other approvals required of them under
applicable federal, state and foreign occupational safety and health and
environmental laws and regulations to conduct their respective businesses, and
the Company and each such subsidiary is in compliance with all terms and
conditions of any such permit, license or approval, except any such violation
of law or regulation, failure to receive required permits, licenses or other
approvals or failure to comply with the terms and conditions of such permits,
licenses or approvals which would not, singly or in the aggregate, result in a
material adverse change in the condition (financial or otherwise), business
prospects, net worth, results of operations or cash flows of the Company and
its subsidiaries, except as described in or contemplated by the Prospectus (or,
if the Prospectus is not in existence, the most recent Preliminary Prospectus).
(x) Each certificate signed by any officer of the Company and
delivered to the Underwriters or counsel for the Underwriters shall be deemed
to be a representation and warranty by the Company to each Underwriter as to
the matters covered thereby.
(y) Except for the shares of capital stock of each of the
subsidiaries owned by the Company and such subsidiaries, neither the Company
nor any such subsidiary owns any shares of stock or any other equity securities
of any corporation or has any equity interest in any firm, partnership,
association or other entity, except as described in or contemplated by the
Prospectus (or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus).
(z) There is no holder of securities of the Company, who, by
reason of the filing of the Registration Statement, has the right to request
the Company to register under the Act, or to include in the Registration
Statement, securities held by such holder, except to the extent such holder has
waived such rights in writing.
(aa) The Company and each of its subsidiaries maintain a system
of internal accounting controls sufficient to provide reasonable assurance that
(1) transactions are executed in accordance with management's general or
specific authorizations; (2) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principles and to maintain asset accountability; (3) access to
assets is permitted only in accordance with management's general or specific
authorization; and (4) the recorded accountability for assets is compared with
the existing assets at reasonable intervals and appropriate action is taken
with respect to any differences.
(bb) Except as disclosed in the Registration Statement, no
default exists, and no event has occurred which, with notice or lapse of time
or both, would constitute a default (i) in
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the due performance and observance of any term, covenant or condition of any
bond, debenture, indenture, note, evidence of indebtedness, mortgage, deed of
trust, lease or other agreement or instrument to which the Company or any of
its subsidiaries is a party or by which the Company or any of its subsidiaries
or any of their respective properties is bound or may be affected in any
material adverse respect with regard to property, business or operations of the
Company and its subsidiaries, and (ii) which has or would have a material
adverse effect on the business, operations or property of the Company or its
subsidiaries, taken as a whole. Neither the Company nor any of its
subsidiaries is in violation of its Articles of Incorporation or bylaws.
(cc) None of the Company, its subsidiaries or any employee of
the Company or its subsidiaries has made any payment of funds of the Company or
its subsidiaries prohibited by law and no funds of the Company or its
subsidiaries have been set aside to be used for any payment prohibited by law.
(dd) Except as described in the Prospectus, the Company has
obtained title insurance policies on all of the Properties and each such title
insurance policy is in full force and effect.
(ee) The mortgages and deeds of trust encumbering the
properties and assets described in the Prospectus are not convertible and the
Company does not hold a participating interest therein and such mortgages and
deeds of trust are not cross-defaulted or cross-collateralized to any property
which is not owned by the Company.
(ff) The Company has been qualified as a real estate investment
trust ("REIT") under the Internal Revenue Code of 1986, as amended (the
"Code"), since the year ended December 31, 1994, has elected to be taxed as a
REIT under the Code for the taxable year ended December 31, 1997, and expects
to continue to be organized and to operate in a manner so as to qualify as a
REIT in the taxable year ending December 31, 1998 and succeeding taxable years.
(gg) The Company will be treated as having met the requirements
for qualification and taxation as a REIT for taxable years ending December 31,
1995, 1996 and 1997 and, assuming compliance with the actions described in the
"Federal Income Tax Considerations" section of the Prospectus, its proposed
method of operation described in the Prospectus will enable it to continue to
meet the requirements for qualification and taxation as a REIT under the Code.
3. Purchase, Sale and Delivery of the Shares
(a) On the basis of the representations, warranties,
agreements and covenants contained in this Agreement and subject to the terms
and conditions set forth in this Agreement, the Company agrees to sell to each
of the Underwriters, and each of the Underwriters, individually and not
jointly, agrees to purchase from the Company, at a purchase price of $_____ per
Share, the respective amount of Firm Shares set forth opposite the name of such
Underwriter in Schedule 3 to this Agreement. One or more certificates in
definitive form for the Firm Shares
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that the several Underwriters have agreed to purchase under this Agreement, and
registered in such name or names as you request upon notice to the Company at
least 48 hours prior to the Firm Closing Date, shall be delivered by or on
behalf of the Company to you on the Firm Closing Date for the respective
accounts of the several Underwriters, against payment by or on behalf of the
Underwriters of the purchase price therefor by certified or official bank
checks drawn upon or by a New York Clearing House bank and payable in next-day
funds to the order of the Company or at the option of the Underwriters, by wire
transfer to the account of the Company in same-day funds. Such delivery of,
and payment for, the Firm Shares shall be made at the offices of Xxxxxxxx
Xxxxxx Xxxxxxxx and Xxxx, 0000 Xxxxx Xxxxxxxx Xxxxxxxx, Xxxxxxx, Xxxxxxxx
00000, at 10:00 A.M., Detroit time, on _____________, 1998, or at such other
place, time or date as you and the Company may agree upon or as you may
determine pursuant to Section 9 of this Agreement, such time and date of
delivery against payment being referred to in this Agreement as the "Firm
Closing Date". The Company will make such certificate or certificates for the
Firm Shares available to you for inspection at the offices in Detroit, Michigan
of the Company's transfer agent or registrar or of Xxxxx & Co., L.L.C., at
least 24 hours prior to the Firm Closing Date.
(b) For the sole purpose of covering any over-allotments in
connection with the distribution and sale of the Firm Shares as contemplated by
the Prospectus, the Company hereby grants to the Underwriters an option to
purchase, individually and not jointly, the Option Shares. The purchase price
to be paid for any Option Shares shall be the same as the price for the Firm
Shares set forth above in paragraph (a) of this Section 3. The option granted
hereby may be exercised as to all or any part of the Option Shares from time to
time within 30 days after the date of the Prospectus (or, if such 30th day
shall be a Saturday or a Sunday or a holiday, on the next business day
thereafter when the New York Stock Exchange is open for trading). The
Underwriters shall not be under any obligation to purchase any of the Option
Shares prior to the exercise of such option. The Underwriters may from time to
time exercise the option granted hereby by giving notice in writing or by
telephone (confirmed in writing) to the Company setting forth the aggregate
number of shares of Option Shares as to which the Underwriters are then
exercising the option and the date and time for delivery of and payment for
such Option Shares. Any such date of delivery shall be determined by the
Underwriters but shall not be earlier than two business days nor later than
seven business days after such exercise of the option and, in any event, shall
not be earlier than the Firm Closing Date. The time and date set forth in such
notice, or such other time, date or both as the Underwriters and the Company
may agree upon or as the Underwriters may determine pursuant to Section 9 of
this Agreement, are called the "Option Closing Date" in this Agreement with
respect to such Option Shares. Upon exercise of the option as provided in this
Agreement, the Company shall become obligated to sell to each of the
Underwriters, and, on the basis of the representations and warranties contained
in this Agreement and subject to the terms and conditions set forth in this
Agreement, each of the Underwriters, individually and not jointly, shall become
obligated to purchase from the Company, the same percentage of the total number
of Option Shares as to which the Underwriters are then exercising the option as
such Underwriter is obligated to purchase of the aggregate number of Firm
Shares (subject to such adjustments to provide for purchases of integral
amounts of Shares as you may determine). If the option is exercised as to
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all or any portion of the Option Shares, one or more certificates in definitive
form for such Option Shares, and payment therefor, shall be delivered on the
related Option Closing Date in the manner, and upon the terms and conditions,
set forth in paragraph (a) of this Section 3, except that reference therein to
the Firm Shares and the Firm Closing Date shall be deemed, for purposes of this
paragraph (b), to refer to such Option Shares and Option Closing Date,
respectively.
(c) You have advised the Company that each Underwriter has
authorized you to accept delivery of its Firm Shares (and Option Shares, if the
option is exercised), to make payment and to give receipt therefor.
4. Offering by the Underwriters. Upon your authorization of the
release of the Firm Shares, the Underwriters propose to offer their respective
portions of the Firm Shares for sale to the public upon the terms set forth in
the Prospectus.
5. Covenants of the Company. The Company covenants and agrees with
each of the Underwriters that:
(a) The Company will use its best efforts to cause the
Registration Statement, if not effective at the time of execution of this
Agreement, and any amendments thereto, to become effective as promptly as
possible. If required, the Company will file the Prospectus and any amendment
or supplement thereto with the Commission in the manner and within the time
period required by Rule 424(b) under the Act. During any time when a
prospectus relating to the Shares is required to be delivered under the Act (or
until the Firm Closing Date and any Option Closing Date, if later), the Company
(1) will comply with all requirements imposed upon it by the Act, the Exchange
Act and the respective rules and regulations of the Commission thereunder to
the extent necessary to permit the continuance of sales of or dealings in the
Shares in accordance with the provisions of this Agreement and of the
Prospectus, as then amended or supplemented, and (2) will not file with the
Commission the Prospectus or the amendment referred to in the third sentence of
Section 2(a) of this Agreement, any amendment or supplement to such Prospectus
or any amendment to the Registration Statement of which the Underwriters shall
not previously have been advised and furnished with a copy a reasonable period
of time prior to the proposed filing or as to which filing you shall not have
given your consent. The Company will prepare and file with the Commission, in
accordance with the Act and the rules and regulations of the Commission,
promptly upon request by the Underwriters or counsel for the Underwriters, any
amendments to the Registration Statement or amendments or supplements to the
Prospectus that may be necessary or advisable in connection with the
distribution of the Shares by the Underwriters, and will use its best efforts
to cause any such amendment to the Registration Statement to be declared
effective by the Commission as promptly as possible. The Company will advise
you, promptly after receiving notice thereof, of the time when the Registration
Statement or any amendment thereto has been filed or declared effective or the
Prospectus or any amendment or supplement thereto has been filed and will
provide evidence satisfactory to you of each such filing or effectiveness.
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(b) The Company will advise the Underwriters, promptly after
receiving notice or obtaining knowledge thereof, of (1) the issuance by the
Commission of any stop order suspending the effectiveness of the Registration
Statement or any post-effective amendment thereto or any order directed at any
document incorporated by reference in the Registration Statement or the
Prospectus or any amendment or supplement thereto or any order preventing or
suspending the use of any Preliminary Prospectus or the Prospectus or any
amendment or supplement thereto, (2) the suspension of the qualification of the
Shares for offering or sale in any jurisdiction, (3) the institution,
threatening or contemplation of any proceeding for any such purpose or (4) any
request made by the Commission for amending the Registration Statement, for
amending or supplementing any Preliminary Prospectus or the Prospectus or for
additional information. The Company will use its best efforts to prevent the
issuance of any such stop order and, if any such stop order is issued, to
obtain the withdrawal thereof as promptly as possible.
(c) The Company will arrange for the registration or
qualification of the Shares for offering and sale under the securities or blue
sky laws of such jurisdictions as you may designate and will continue such
qualifications in effect for as long as may be necessary to complete the
distribution of the Shares, provided, however, that in connection with such
qualification the Company shall not be required to qualify as a foreign
corporation or to execute a general consent to service of process in any
jurisdiction.
(d) If, at any time prior to the later of (1) the final date
when a prospectus relating to the Shares is required to be delivered under the
Act or (2) the Firm Closing Date and any Option Closing Date, any event occurs
as a result of which the Prospectus, as then amended or supplemented, would
include any untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading, or if for any other
reason it is necessary at any time to amend or supplement the Prospectus to
comply with the Act, the Exchange Act, the respective rules or regulations of
the Commission thereunder or any other law, the Company will promptly notify
the Underwriters thereof and, subject to Section 5(a) of this Agreement, will
prepare and file with the Commission, at the Company's expense, an amendment to
the Registration Statement or an amendment or supplement to the Prospectus that
corrects such statement or omission or effects such compliance.
(e) The Company will, without charge, provide (1) to each of
the Underwriters and to counsel for the Underwriters a signed copy of the
registration statement originally filed with respect to the Shares and each
amendment thereto (in each case including exhibits thereto), and a conformed
copy of such registration statement and each amendment thereto (in each case
without exhibits thereto) and (2) so long as a prospectus relating to the
Shares is required to be delivered under the Act, as many copies of each
Preliminary Prospectus or the Prospectus or any amendment or supplement thereto
as the Underwriters, counsel for the Underwriters or any dealer may reasonably
request.
(f) The Company, as soon as practicable and in any event not
later than 16 months after the effective date of the Registration Statement,
will make generally available to its
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security holders and to the Underwriters a consolidated earnings statement of
the Company and its subsidiaries that satisfies the provisions of Section 11(a)
of the Act and Rule 158 thereunder.
(g) The Company will apply the net proceeds from the sale of
the Shares sold by the Company as set forth under "Use of Proceeds" in the
Prospectus.
(h) The Company will not, directly or indirectly, and will
cause its directors and executive officers, as shown on the attached Schedule
4, and its affiliates which are shareholders of the Company, to agree not to,
directly or indirectly, without your prior written consent, offer, sell, offer
to sell, contract to sell, grant any option to purchase or otherwise sell or
dispose of (or announce any offer, sale, offer of sale, contract of sale, grant
of any option to purchase or other sale or other disposition of) any Common
Stock or any securities convertible into, or exchangeable or exercisable for,
Common Stock for a period of 180 days after the date of this Agreement except
for (1) issuances pursuant to the Company's employee stock purchase plan or the
exercise of warrants outstanding on the date of this Agreement or pursuant to
the exercise of employee stock options outstanding on the date of this
Agreement (including, without limitation, the use by the holder of any such
warrants or options of Common Stock (whether outstanding or withheld by the
Company from the total amount issued) to pay the exercise price of such
warrants or options), or (2) the grant of employee stock options pursuant to
the Company's stock option plans in effect on the date of this Agreement,
provided that any employee stock options so granted after the date of this
Agreement are not exercisable prior to 180 days after the date of this
Agreement, or (3) issuances and sales of the Shares to the Underwriters
pursuant to this Agreement.
(i) The Company will not, directly or indirectly, (1) take any
action designed to cause or to result in, or that has constituted or which
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
the Shares or (2) (A) sell, bid for, purchase, attempt to induce any person to
purchase, or pay anyone any compensation for soliciting purchases of, the
Shares or (B) pay or agree to pay to any person any compensation for soliciting
another to purchase any other securities of the Company.
6. Expenses. The Company will pay all costs, expenses, fees and
taxes incident to the performance of its obligations under this Agreement,
whether or not the transactions contemplated by this Agreement are consummated
or this Agreement is terminated pursuant to Section 11 of this Agreement,
including all costs, expenses fees and taxes incident to (1) the preparing,
printing or other production and filing of documents with respect to the
transactions, including any costs of printing the registration statement
originally filed with respect to the Shares and any amendment thereto
(including, without limitation, the Registration Statement), any Preliminary
Prospectus and the Prospectus and any amendment or supplement thereto, this
Agreement, the Agreement Among Underwriters, the Selected Dealer Agreement, the
Underwriters' Questionnaire and Power of Attorney, any blue sky memoranda and
all other agreements, memoranda, correspondence and other documents printed and
delivered in connection with the offering of the Shares, (2) all arrangements
relating to the delivery to the Underwriters
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of copies of the foregoing documents, (3) the fees and disbursements of the
counsel, the accountants and any other experts or advisors retained by the
Company, (4) preparation, issuance and delivery to the Underwriters of any
certificates evidencing the Shares, including transfer agent's and registrar's
fees, (5) the registration or qualification of the Shares under state
securities and blue sky laws, including filing fees and the reasonable legal
fees and disbursements of counsel for the Underwriters relating thereto or to
the "Blue Sky" survey, (6) the filing fees of the Commission and the National
Association of Securities Dealers, Inc. relating to the Shares and any listing
fees relating to the Shares, and (7) advertising relating to the offering of
the Shares (other than as shall have been specifically approved by the
Underwriters to be paid for by the Underwriters). If the sale of the Shares
provided for in this Agreement is not consummated because any condition to the
obligations of the Underwriters set forth in Section 7 of this Agreement is not
satisfied, because this Agreement is terminated pursuant to Section 11 of this
Agreement, because of any failure, refusal or inability on the part of the
Company to perform all obligations and satisfy all conditions on its or their
part to be performed or satisfied under this Agreement (other than by reason of
a default by any of the Underwriters) or for any other reason (other than
because of the Underwriters' refusal (except for bona fide reasons related to
the Company, its officers, directors, employees or agents or market conditions)
or inability to perform), the Company will reimburse the Underwriters
individually upon demand for all out-of-pocket expenses (including counsel fees
and disbursements of counsel) that shall have been incurred by them in
connection with the proposed purchase and sale of the Shares. The
reimbursement described in the preceding sentence will not exceed $80,000 in
the case of the documented fees and expenses of Underwriters' counsel and will
not exceed $10,000 in the case of the actual out-of-pocket expenses incurred
by the Underwriters. The Company shall not in any event be liable to any of
the Underwriters for the loss of anticipated profits from the transactions
covered by this Agreement.
7. Conditions of the Underwriters' Obligations. The several
obligations of each of the Underwriters to purchase and pay for the Firm Shares
shall be subject, in the Underwriters' sole discretion, to the accuracy of the
representations and warranties of the Company contained in this Agreement as of
the date of this Agreement and as of the Firm Closing Date, as if made on and
as of the Firm Closing Date, to the accuracy of the statements of the Company's
officers made pursuant to the provisions of this Agreement, to the performance
by the Company of its covenants and agreements under this Agreement and to the
following additional conditions:
(a) If the Registration Statement or any amendment to the
Registration Statement filed prior to the Firm Closing Date has not been
declared effective as of the time of execution of this Agreement, the
Registration Statement or such amendment shall have been declared effective not
later than 11:00 A.M., New York City time, on the date on which an amendment to
the registration statement originally filed with respect to the Shares or to
the Registration Statement, as the case may be, containing information
regarding the offering price of the Shares has been filed with the Commission,
or such later time and date as shall have been consented to by you. If
required, the Prospectus and any amendment or supplement thereto shall have
been filed with the Commission in the manner and within the time period
required by Rule 424(b) under the Act. No stop order suspending the
effectiveness of the Registration Statement
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or any post-effective amendment to the Registration Statement and no order
directed at any document incorporated by reference in the Registration
Statement or the Prospectus or any amendment or supplement thereto shall have
been issued and no proceedings for that purpose shall have been instituted or
threatened or, to the knowledge of the Company or the Underwriters, shall be
contemplated by the Commission. The Company shall have complied with any
request of the Commission for additional information (to be included in the
Registration Statement or the Prospectus or otherwise).
(b) You shall have received on the Firm Closing Date an
opinion addressed to the Underwriters (satisfactory to you and counsel for the
Underwriters), dated the Firm Closing Date, of Xxxx Xxxxxx & Xxxxxx, counsel
for the Company, to the effect that:
(1) the Company and each of its subsidiaries listed in
Schedule 1 to this Agreement (the "Subsidiaries") are validly existing as
corporations in good standing under the laws of their respective jurisdictions
of incorporation and are duly qualified to transact business as foreign
corporations and are in good standing under the laws of all other jurisdictions
where the ownership or leasing of their respective properties or the conduct of
their respective businesses requires such qualification, except where the
failure to be so qualified would not have a material adverse effect on the
Company and its Subsidiaries, taken as a whole;
(2) the Company and each of the Subsidiaries have
corporate power to own or lease their respective properties and conduct their
respective businesses as described in the Registration Statement and the
Prospectus, and the Company has corporate power to enter into this Agreement
and to carry out all the terms and provisions of this Agreement to be carried
out by it;
(3) the issued and outstanding shares of capital stock
of each of the Subsidiaries have been duly authorized and validly issued, are
fully paid and nonassessable and are owned beneficially by the Company free and
clear of any adverse claim, as defined in the applicable Uniform Commercial
Code, or, to the best knowledge of such counsel, any other security interests,
liens, encumbrances, equities or claims;
(4) the authorized, issued and outstanding capital
stock of the Company is as set forth in the Prospectus under the caption
"Capitalization"; all of the issued and outstanding shares of capital stock of
the Company have been duly authorized and validly issued and are fully paid and
nonassessable, have been issued in compliance with all applicable federal and
state securities laws and were not issued in violation of any preemptive rights
or other rights to subscribe for or purchase securities; the certificates for
such outstanding capital stock are valid and in proper legal form; no holders
of the outstanding shares of capital stock of the Company are entitled as such
to any preemptive or other rights to subscribe for any of the Shares; and no
holders of securities of the Company are entitled to have such securities
registered under the Registration Statement;
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(5) the statements set forth under the headings
"Business and Properties" and "Legal Matters" in the Prospectus, insofar as
such statements constitute a summary of the legal matters, documents or
proceedings referred to under such headings, provide a fair summary of such
legal matters, documents and proceedings discussed under such headings;
(6) the execution and delivery of this Agreement have
been duly authorized by all necessary corporate action of the Company and this
Agreement has been duly executed and delivered by the Company;
(7) after due inquiry and to the best knowledge of such
counsel, no legal or governmental proceedings are pending to which the Company
or any of the Subsidiaries is a party or to which the property of the Company
or any of the Subsidiaries is subject that are required to be described in the
Registration Statement or the Prospectus and that are not described therein,
and, to the best knowledge of such counsel, no such proceedings have been
threatened against the Company or any of the Subsidiaries or with respect to
any of their respective properties; and no contract or other document is
required to be described in the Registration Statement or the Prospectus or to
be filed as an exhibit to the Registration Statement that is not described
therein or filed as required;
(8) the issuance, offering and sale of the Shares to
the Underwriters by the Company pursuant to this Agreement, the execution and
delivery of this Agreement, the compliance by the Company with the other
provisions of this Agreement and the consummation of the other transactions
contemplated by this Agreement do not (A) require the consent, approval,
authorization, registration or qualification of or with any governmental
authority, except such as have been obtained and such as may be required under
the Act and under state securities or blue sky laws, or (B) conflict with or
result in a breach or violation of any of the terms and provisions of, or
constitute a default under, any indenture, mortgage, deed of trust, lease or
other agreement or instrument, known to such counsel, to which the Company or
any of the Subsidiaries is a party or by which the Company or any of the
Subsidiaries or any of their respective properties are bound, or the charter
documents or bylaws of the Company or any of the Subsidiaries, or any statute
or any judgment, decree, order, rule, regulation or other law of any court or
other governmental authority or any arbitrator known to such counsel and
applicable to the Company or any of the Subsidiaries;
(9) the Registration Statement is effective under the
Act; any required filing of the Prospectus pursuant to Rule 424(b) has been
made in the manner and within the time period required by Rule 424(b); and no
stop order suspending the effectiveness of the Registration Statement or any
post-effective amendment to the Registration Statement and no order directed at
any document incorporated by reference in the Registration Statement or the
Prospectus or any amendment or supplement thereto has been issued, and no
proceedings for that purpose have been instituted or threatened or, to the best
knowledge of such counsel, are contemplated by the Commission;
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(10) the registration statement originally filed with
respect to the Shares and each amendment thereto (including, without
limitation, the Registration Statement) and the Prospectus and any supplement
or amendment thereto (in each case, including the documents incorporated by
reference therein but not including the financial statements and other
financial information contained therein, as to which such counsel need express
no opinion) comply as to form in all material respects with the applicable
requirements of the Act, the Exchange Act and the respective rules and
regulations of the Commission thereunder;
(11) the Company and the Subsidiaries possess all
certificates, authorizations and permits issued by the appropriate federal,
state or foreign regulatory authorities necessary to conduct their respective
businesses;
(12) this transaction will not cause the Company to
become an investment company subject to registration under the Investment
Company Act of 1940; and
(13) the Company has been qualified as a real estate
investment trust ("REIT") under the Internal Revenue Code of 1986, as amended
(the "Code"), since the year ended December 31, 1994, has elected to be taxed
as a REIT under the Code for the taxable year ended December 31, 1997, assuming
compliance with the actions described in the "Federal Income Tax
Considerations" section of the Prospectus, its proposed method of operation
described in the Prospectus will enable it to continue to meet the requirements
for qualification and taxation as a REIT under the Code.
Such counsel shall also state that, (y) in the course of
preparation of the Registration Statement and any amendment to the Registration
Statement and the Prospectus and any amendment or supplement thereto, such
counsel had conferences with officials of the Company and its independent
auditors, and with representatives of the Underwriters and their counsel at
which the content of the Registration Statement and any amendment to the
Registration Statement and the Prospectus and any amendment or supplement
thereto and related matters were discussed, and also had discussions with such
officials of the Company with a view toward a clear understanding on their part
of the requirements of the Act with reference to the preparation of
registration statements and prospectuses, although such counsel did not verify
independently the accuracy or completeness of the statements contained in the
Registration Statement and any amendment to the Registration Statement and the
Prospectus and any amendment or supplement thereto, and (z) based on such
counsel's examination of the Registration Statement and any amendment to the
Registration Statement and the Prospectus and any amendment or supplement
thereto and on its participation in the above-mentioned conferences, nothing
has come to its attention that gives it reason to believe that the Registration
Statement or any amendment to the Registration Statement, or the Prospectus or
any amendment or supplement thereto, at the time the Registration Statement
became effective, contained any untrue statement of a material fact or omitted
to state any material fact required to be stated therein or necessary to make
the statements therein not misleading or that the Prospectus or any amendment
or supplement thereto, as of the date of such opinion, contained any untrue
statement of a material fact or omitted or omits to state a material fact
necessary in order to make the statements therein, in the light of the
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circumstances under which they were made, not misleading (except that such
counsel need not express any belief as to financial statements and notes, any
related schedules and other financial information contained in the Registration
Statement or Prospectus).
In rendering any such opinion, such counsel may rely, as to
matters of fact, to the extent such counsel deems reasonable, on certificates
of responsible officers of the Company and public officials and, as to matters
involving the application of laws of any jurisdiction other than the State of
Michigan or the United States, to the extent satisfactory in form and scope to
counsel for the Underwriters, upon the opinions of local counsel reasonably
satisfactory to counsel for the Underwriters, and copies of such opinions shall
be delivered to the Underwriters and counsel for the Underwriters.
References to the Registration Statement and the Prospectus in
this paragraph (b) shall include any amendment or supplement thereto at the
date of such opinion.
(c) You shall have received on the Firm Closing Date an
opinion addressed to the Underwriters, dated the Firm Closing Date, of Xxxxxxxx
Xxxxxx Xxxxxxxx and Xxxx, counsel for the Underwriters, with respect to the
issuance and sale of the Firm Shares, the Registration Statement and the
Prospectus, and such other related matters as the Underwriters may reasonably
require, and the Company shall have furnished to such counsel such documents as
they may reasonably request for the purpose of enabling them to pass upon such
matters. In rendering such opinion, such counsel may rely as to all matters
involving the application of laws of any jurisdiction other than the State of
Michigan or the United States upon the opinion of Xxxx Xxxxxx & Xxxxxx referred
to in paragraph (b) above.
(d) You shall have received letters, on and as of the date of
this Agreement and on and as of the Firm Closing Date, from Deloitte & Touche
LLP, certified public accountants for the Company, in form and substance
satisfactory to the Underwriters, to the effect that:
(1) they are independent public accountants with
respect to the Company and its consolidated subsidiaries within the
meaning of the Act, the Exchange Act and the applicable rules and
regulations thereunder;
(2) in their opinion, the consolidated financial
statements and schedules of the Company and its consolidated
subsidiaries examined by them and included or incorporated by reference
in the Registration Statement and the Prospectus comply as to form in
all material respects with the applicable accounting requirements of the
Act, the Exchange Act, the related published rules and regulations
thereunder and Staff Accounting Bulletins with respect to registration
statements on Form S-2 and the Exchange Act documents and filings
incorporated by reference therein;
(3) on the basis of a reading of the December 31, 1997
audited consolidated financial statements and schedules of the Company
and its consolidated subsidiaries included or incorporated by reference
in the Registration Statement and the
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Prospectus, a reading of the latest interim unaudited consolidated
financial statements of the Company and its consolidated subsidiaries, a
reading of the minutes of the meetings of the shareholders, the board of
directors and any committees thereof of the Company and each of its
consolidated subsidiaries, inquiries of certain officials of the Company
and its consolidated subsidiaries who have responsibility for financial
and accounting matters, such limited review and auditing procedures and
inquiries as may be in accordance with standards for such reviews
promulgated by the American Institute of Certified Public Accountants
and other specific procedures and inquiries, nothing came to their
attention that caused them to believe that:
(A) the audited or unaudited consolidated
financial statements and schedules of the Company and its
consolidated subsidiaries included or incorporated by reference
in the Registration Statement and the Prospectus do not comply as
to form in all material respects with the applicable accounting
requirements of the Act, the Exchange Act and the related
published rules and regulations thereunder and Staff Accounting
Bulletins with respect to registration statements on Form S-2 and
the Exchange Act documents and filings incorporated by reference
therein or such audited or unaudited consolidated financial
statements are not fairly presented in conformity with generally
accepted accounting principles applied on a basis substantially
consistent with that of the audited consolidated financial
statements included or incorporated by reference in the
Registration Statement and the Prospectus or such unaudited
schedules, when considered in relation to the unaudited financial
statements included or incorporated by reference in the
Prospectus, do not present fairly in all material respects the
information shown therein;
(B) at the date of the latest balance sheet read
by them and at a subsequent specific date not more than five
business days prior to the date of such letter, there were any
changes in the capital stock or long-term debt of the Company and
its consolidated subsidiaries or any decreases in net current
assets or shareholders' equity of the Company and its
consolidated subsidiaries, in each case compared with amounts
shown on the December 31, 1997 audited consolidated balance sheet
included or incorporated by reference in the Registration
Statement and the Prospectus, except for changes which the
Prospectus discloses have occurred or may occur or which are
described in the letter;
(C) at the date of the latest consolidated
balance sheet read by them and at a subsequent specific date not
more than five business days prior to the date of such letter
there were any decreases, as compared with amounts shown in the
audited consolidated balance sheet as of December 31, 1997,
included or incorporated by reference in the Prospectus, in
consolidated total assets, working capital, long-term debt or
shareholders' equity of the Company and its
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consolidated subsidiaries, except for decreases which the
Prospectus discloses have occurred or may occur or which are
described in such letter;
(D) for the period from December 31, 1997 to the
date of the latest consolidated income statement read by them,
and for the period from December 31, 1997 to a subsequent
specified date not more than five business days prior to the date
of such letter, there were any decreases, as compared with the
corresponding period of the preceding year in consolidated
revenues, gross profit, operating income, earnings before income
taxes or the total or per share amounts of income before
extraordinary items or of net income of the Company and its
consolidated subsidiaries, except for decreases which the
Prospectus discloses have occurred or may occur or which are
described in such letter; and
(4) on the basis of their examinations referred to in
their report contained or incorporated by reference in the Prospectus,
the limited procedures referred to in (3) above and the carrying out of
certain other specified procedures, not constituting an audit, they have
compared certain specified amounts, percentages and financial
information included in the Registration Statement and the Prospectus,
or in the Company's Annual and Quarterly Reports on Forms 10-K and 10-Q,
respectively, for the fiscal year ended December 31, 1997 and the fiscal
quarter ended March 31, 1998 incorporated by reference in the
Registration Statement and Prospectus with the underlying accounting
records of the Company and its consolidated subsidiaries and with
information derived from such records and have found them to be in
agreement, excluding any questions of legal interpretation.
(e) If the letters referred to in paragraph (d) above set
forth any such changes, decreases or increases, it shall be a further condition
to the obligations of the Underwriters that (1) such letters shall be
accompanied by a written explanation of the Company as to the significance
thereof, unless the Underwriters deem such explanation unnecessary, and (2)
such changes, decreases or increases do not, in the sole judgment of the
Underwriters, make it impractical or inadvisable to proceed with the purchase
and delivery of the Shares as contemplated by the Registration Statement.
References to the Registration Statement and the Prospectus in paragraph (d)
and this paragraph (e) with respect to the letters referred to above shall
include any amendment or supplement thereto at the date of such letter.
(f) You shall have received on the Firm Closing Date a
certificate, dated the Firm Closing Date, of the Chief Executive Officer and
the Chief Financial Officer of the Company to the effect that:
(1) the representations and warranties of the Company
in this Agreement are true and correct as if made on and as of the Firm
Closing Date; the Registration Statement, as amended as of the Firm
Closing Date, does not include any untrue statement of a material fact
or omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading, and the
Xxxxxxxxxx,
00
00
as amended or supplemented as of the Firm Closing Date, does not include
any untrue statement of a material fact or omit to state any material
fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading; and the
Company has performed all covenants and agreements and satisfied all
conditions on its part to be performed or satisfied at or prior to the
Firm Closing Date;
(2) no stop order suspending the effectiveness of the
Registration Statement or any post-effective amendment thereto and no
order directed at any document incorporated by reference in the
Registration Statement or the Prospectus or any amendment or supplement
thereto has been issued, and no proceedings for that purpose have been
instituted or threatened or, to the best of the Company's knowledge, are
contemplated by the Commission; and
(3) subsequent to the respective dates as of which
information is given in the Registration Statement and the Prospectus,
(i) neither the Company nor any of its subsidiaries has sustained any
material loss or interference with their respective businesses or
properties from fire, flood, hurricane, accident or other calamity,
whether or not covered by insurance, or from any labor dispute or any
legal or governmental proceeding, and (ii) there has not been any
material adverse change, or any development involving a prospective
material adverse change, in the condition (financial or otherwise),
management, business, net worth, cash flows or results of operations of
the Company or any of its subsidiaries, except in each case as described
in or contemplated by the Prospectus, and (iii) there has not been any
change in the capital stock or a material increase in the long-term debt
of the Company and its subsidiaries, except in each case as described in
or contemplated by the Prospectus, and (iv) the Company has not incurred
any liability or obligation, direct or contingent, which is material to
the Company and its subsidiaries taken as a whole, except in each case
as described in or contemplated by the Prospectus.
(g) On or before the Firm Closing Date, the Underwriters and
counsel for the Underwriters shall have received such further certificates,
documents or other information as they may have reasonably requested from the
Company.
All opinions, certificates, letters and documents delivered
pursuant to this Agreement will comply with the provisions of this Agreement
only if they are reasonably satisfactory in all material respects to the
Underwriters and counsel for the Underwriters. The Company shall furnish to
the Underwriters such conformed copies of such opinions, certificates, letters
and documents in such quantities as the Underwriters and counsel for the
Underwriters shall reasonably request.
The several obligations of each of the Underwriters to purchase
and pay for any Option Shares shall be subject, in their discretion, to each of
the foregoing conditions to purchase the Firm Shares, except that all
references to the Firm Shares and the Firm Closing Date shall be deemed to
refer to such Option Shares and the related Option Closing Date, respectively.
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8. Indemnification and Contribution.
(a) The Company agrees to indemnify and hold harmless each
Underwriter, their respective directors, officers, partners, agents and
employees and each other person, if any, who controls any Underwriter within
the meaning of Section 15 of the Act or Section 20 of the Exchange Act
(collectively, "Indemnitees") against any losses, claims, damages or
liabilities, joint or several, to which such Indemnitee may become subject
under the Act, the Exchange Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of, relate to,
or are caused by or based upon:
(1) any untrue statement or alleged untrue statement
made by the Company in this Agreement,
(2) any untrue statement or alleged untrue statement of
any material fact contained in (A) the Registration Statement or any
amendment thereto or any Preliminary Prospectus or the 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"),
(3) any omission or alleged omission to state in the
Registration Statement or any amendment thereto, any Preliminary
Prospectus or the 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, in light of the circumstances
under which they were made, not misleading, or
(4) any untrue statement or alleged untrue statement of
any material fact contained in any audio or visual materials used in
connection with the marketing of the Shares, including, without
limitation, slides, videos, films, and tape recordings, except to the
extent such materials were prepared by the Underwriters,
and will reimburse, as incurred, each Indemnitee for any legal or other
expenses reasonably incurred by such Indemnitee 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 will not be liable in any such case to the extent
that any such loss, claim, damage or liability arises out of, is related to, or
is caused by or based upon, any untrue statement or alleged untrue statement or
omission or alleged omission made in such Registration Statement or any
amendment thereto, any Preliminary Prospectus, the 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; and provided, further, that the Company will not be liable to
any Indemnitee with respect to any such untrue statement or omission made in
any Preliminary Prospectus that is corrected in the
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Prospectus (or any amendment or supplement thereto) if the person asserting any
such loss, claim, damage or liability purchased Shares from such Underwriter
but was not sent or given a copy of the Prospectus (as amended or
supplemented), other than the documents incorporated by reference therein, at
or prior to the written confirmation of the sale of such Shares to such person
in any case where such delivery of the Prospectus (as amended or supplemented)
is required by the Act and where delivery of such Prospectus (as amended or
supplemented) would have cured the defect giving rise to such loss, claim,
damage or liability, unless such failure to deliver the Prospectus (as amended
or supplemented) was a result of noncompliance by the Company with Section 5(d)
or 5(e) of this Agreement. This indemnity agreement will be in addition to any
liability which the Company may otherwise have. The Company will not, without
the prior written consent of the Underwriters, settle or compromise or consent
to the entry of any judgment in any pending or threatened claim, action, suit
or proceeding in respect of which indemnification may be sought hereunder
(whether or not any such Indemnitee is a party to such claim, action, suit or
proceeding), unless (1) such settlement, compromise or consent includes an
unconditional release of all of the Indemnitees from all liability arising out
of such claim, action, suit or proceeding and (2) the entire settlement amount
and all costs of settlement and all related costs are borne by the Company.
(b) The Company hereby expressly and irrevocably waives any
and all rights and objections which it may have against any Indemnitee in
respect of any liabilities arising out of, or relating to, this Agreement or
the offering contemplated by this Agreement, except to the extent such
liabilities are determined, by a final order of a court of competent
jurisdiction, to be the direct and primary result of the Underwriters' gross
negligence or willful misconduct. Each Underwriter, individually and not
jointly, will indemnify and hold harmless the Company, each of its directors,
each of its officers who signed the Registration Statement and each person, if
any, who controls the Company within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act against any losses, claims, damages or
liabilities to which the Company, any such director or officer of the Company,
or any such controlling person of the Company may become subject under the Act,
the Exchange Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) are determined, by a final order of
a court of competent jurisdiction, to be the direct and primary result of (1)
any untrue statement or alleged untrue statement of any material fact contained
in the Registration Statement or any amendment thereto, any Preliminary
Prospectus or the Prospectus or any amendment or supplement thereto, or any
Application or (2) the omission or the alleged omission to state therein a
material fact required to be stated in the Registration Statement or any
amendment thereto, any Preliminary Prospectus or the Prospectus or any
amendment or supplement thereto, or any Application 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 is determined by such court to have been made in reliance
upon, and in conformity with, written information furnished to the Company by
such Underwriter expressly for use therein; and, subject to the limitation set
forth immediately preceding this clause, will reimburse, as incurred, any legal
or other expenses reasonably incurred by the Company or any such director,
officer or controlling person in connection with investigating or defending
against any such loss, claim, damage,
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liability or action. This indemnity agreement will be in addition to any
liability which such Underwriter may otherwise have.
(c) Promptly after receipt by an indemnified party under this
Section 8 of notice of the commencement of any action (including any
governmental investigation), such indemnified party will, if a claim in respect
thereof is to be made against the indemnifying party under this Section 8,
notify the indemnifying party of the commencement of such action; but the
omission so to notify the indemnifying party will not relieve it from any
liability which it may have to any indemnified party otherwise than under this
Section 8 and will not relieve it from any liability under this Section 8
except to the extent the indemnifying party is actually prejudiced by the
failure to give such notice. In case any such action is brought against any
indemnified party, and it notifies the indemnifying party of the commencement
thereof, the indemnifying party will be entitled to participate therein and, to
the extent that it may wish, jointly with any other indemnifying party
similarly notified, to assume the defense thereof, with counsel satisfactory to
such indemnified party; provided, however, that if the parties to any such
action (including any impleaded parties) include both the indemnified party and
the indemnifying party or any officers, directors or controlling persons of
such indemnifying party and the indemnified party shall have reasonably
concluded that there may be one or more legal defenses available to it and/or
other indemnified parties which are different from or additional to those
available to the indemnifying party, the indemnifying party shall not have the
right to direct the defense of such action on behalf of such indemnified party
or parties and such indemnified party or parties shall have the right to select
separate counsel to defend such action on behalf of such indemnified party or
parties. After 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 8 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 (1) the indemnified party shall have employed separate counsel in
accordance with the proviso to the next preceding sentence (it being
understood, however, that in connection with such action the indemnifying party
shall not be liable for the expenses of more than one separate counsel (in
addition to local counsel) in any one action or separate but substantially
similar actions in the same jurisdiction arising out of the same general
allegations or circumstances, which counsel shall be designated by you in the
case of indemnification under paragraph (a) of this Section 8, representing the
indemnified parties under such paragraph (a) who are parties to such action or
actions) or (2) the indemnifying party does not promptly retain counsel
reasonably satisfactory to the indemnified party or (3) the indemnifying party
has authorized the employment of counsel for the indemnified party at the
expense of the indemnifying party. After such notice from the indemnifying
party to such indemnified party, the indemnifying party will not be liable for
the costs and expenses of any settlement of such action effected by such
indemnified party without the written consent of the indemnifying party.
(d) If the indemnity agreement provided for in the preceding
paragraphs of this Section 8 is unavailable or insufficient, for any reason, to
fully indemnify an indemnified party in respect of any losses, claims, damages
or liabilities (or actions in respect thereof), each
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indemnifying party, in order to provide for just and equitable contribution,
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 (1) the relative
benefits received by the indemnifying party or parties on the one hand and the
indemnified party on the other from the offering of the Shares or (2) if the
allocation provided by the foregoing clause (1) is not permitted by applicable
law, not only such relative benefits but also the relative fault of the
indemnifying party or parties on the one hand and the indemnified party on the
other in connection with the statements or omissions or alleged 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 on the one hand
and the Underwriters on the other shall be deemed to be in the same proportion
as the total proceeds from the offering (before deducting expenses) received by
the Company bear to the total underwriting discounts and commissions received
by the Underwriters, in each case as set forth on the cover page of the
Prospectus. The relative fault of the parties 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 Underwriters, the
parties' relative intents, knowledge, access to information and opportunity to
correct or prevent such statement or omission, and any other equitable
considerations appropriate in the circumstances. The Company and the
Underwriters agree that it would not be equitable if the amount of such
contribution were determined by pro rata or per capita allocation (even if the
Underwriters were treated as one entity for such purpose) or by any other
method of allocation that does not take into account the equitable
considerations referred to above in this paragraph (d). Notwithstanding any
other provision of this paragraph (d), no Underwriter shall be obligated to
make contributions under this paragraph (d) that in the aggregate exceed the
total public offering price of the securities purchased by such Underwriter
under this Agreement, less the aggregate amount of any damages that such
Underwriter has otherwise been required to pay in respect of such untrue or
alleged untrue statement or omission or alleged omission, and no person guilty
of fraudulent misrepresentation (within the meaning of Section 11(f) of the
Act) shall be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation. The Underwriters' obligations to contribute
under this paragraph (d) are individual in proportion to their respective
underwriting obligations and not joint. For purposes of this paragraph (d),
each person, if any, who controls an Underwriter within the meaning of Section
15 of the Act or Section 20 of the Exchange Act shall have the same rights to
contribution as such Underwriter, and each director of the Company, each
officer of the Company who signed the Registration Statement and each person,
if any, who controls the Company within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act, shall have the same rights to contribution as
the Company.
9. Default of Underwriters. If any one or more of the Underwriters
shall fail or refuse to purchase the Firm Shares which it or they have agreed
to purchase under this Agreement and the aggregate number of shares of Firm
Shares which such defaulting Underwriter or Underwriters agreed but failed or
refused to purchase is not more than one-tenth of the total number of shares of
Firm Shares, each non-defaulting Underwriter shall be obligated severally,
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in the proportion which the number of shares of Firm Shares set forth opposite
its name in Schedule 3 bears to the total number of shares of Firm Shares which
all non-defaulting Underwriters have agreed to purchase, or in such other
proportion as you may specify, to purchase the Firm Shares which such
defaulting Underwriter or Underwriters agreed but failed or refused to
purchase; provided, however, that in no event shall the number of Firm Shares
which any Underwriter has agreed to purchase pursuant to Section 3 be increased
pursuant to this Section 9 by an amount in excess of 10% of such number of Firm
Shares without the written consent of such Underwriter. If any one or more of
the Underwriters shall fail or refuse to purchase Firm Shares or Option Shares
under this Agreement and the number of shares of Firm Shares with respect to
which such default occurs is more than 10% of the total amount of Firm Shares,
and if arrangements satisfactory to you are not made within 48 hours after such
default for the purchase by other persons (who may include the non-defaulting
Underwriters) of the Shares with respect to which such default occurs, this
Agreement will terminate without liability on the part of any non-defaulting
Underwriters or the Company other than as provided in Section 10 of this
Agreement. In any such case which does not result in the termination of this
Agreement, you shall have the right to postpone the Firm Closing Date or the
Option Closing Date, as the case may be, established as provided in Section 3
of this Agreement for not more than seven business days in order that any
necessary changes may be made in the Registration Statement, the Prospectus,
the other documents and the arrangements for the purchase and delivery of the
Firm Shares or Option Shares, as the case may be. As used in this Agreement,
the term "Underwriter" includes any person substituted for an Underwriter under
this Section 9. Nothing herein shall relieve any defaulting Underwriter from
liability for its default.
10. Survival. The respective representations, warranties,
agreements, covenants, indemnities, contribution agreements and other
statements of the Company and the several Underwriters set forth in this
Agreement or made by or on behalf of them, respectively, pursuant to this
Agreement shall remain in full force and effect, regardless of (1) any
investigation made by or on behalf of the Company, any of its officers or
directors, any Underwriter or any controlling person referred to in Section 8
of this Agreement and (2) delivery of and payment for the Shares. The
respective agreements, covenants, indemnities and other statements set forth in
Sections 6 and 8 of this Agreement shall remain in full force and effect,
regardless of any termination or cancellation of this Agreement.
11. Termination.
(a) This Agreement may be terminated with respect to the Firm
Shares or any Option Shares in your sole discretion by notice to the Company
given prior to the Firm Closing Date or the related Option Closing Date,
respectively, if the Company shall have failed, refused or been unable to
perform all obligations on its part to be performed under this Agreement on or
before the Firm Closing Date or the Option Closing Date, as applicable, or if
any of the conditions in Section 7 shall not have been fulfilled when and as
required by this Agreement to be fulfilled, or if, at or prior to the Firm
Closing Date or such Option Closing Date, respectively:
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(1) the Company or any of its subsidiaries shall have,
in your sole judgment, sustained any material loss or interference with
their respective businesses or properties from fire, flood, hurricane,
accident or other calamity, whether or not covered by insurance, or from
any labor dispute or any legal or governmental proceeding or there shall
have been any material adverse change, or any development involving a
prospective material adverse change (including without limitation a
change in management or control of the Company), in the condition
(financial or otherwise), management, business, net worth, cash flows or
results of operations of the Company or any of its subsidiaries, except
in each case as described in or contemplated by the Prospectus
(exclusive of any amendment or supplement thereto);
(2) trading in the Common Stock shall have been
suspended by the Commission or the New York Stock Exchange or trading in
securities generally on the New York Stock Exchange shall have been
suspended or minimum or maximum prices shall have been established on
such exchange or market system;
(3) a banking moratorium shall have been declared by
Michigan, New York or United States authorities;
(4) there shall have been (A) an outbreak or escalation
of hostilities between the United States and any foreign power, (B) an
outbreak or escalation of any other insurrection or armed conflict
involving the United States or (C) any other calamity or crisis or
material adverse change in the general economic, political or financial
conditions having an effect on the U.S. financial markets that, in your
sole judgment, makes it impractical or inadvisable to proceed with the
public offering or the delivery of the Shares as contemplated by the
Registration Statement, as amended as of the date of this Agreement;
(5) there shall have been enacted, published, decreed
or promulgated any federal, state or local statute, regulation, rule or
order of any court or other governmental authority which in your opinion
materially and adversely affects or will materially and adversely affect
the business or operations of the Company; or
(6) any actions shall have been taken by any federal,
state or local government or agency in respect of its monetary or fiscal
affairs which in your opinion has a material adverse effect on the
securities markets in the United States.
(b) Termination of this Agreement pursuant to this Section 11
shall be without liability of any party to any other party except as provided
in Section 6 and Section 8 of this Agreement.
12. Information Supplied by Underwriters. The statements set forth
in the last paragraph on the front cover page and under the heading
"Underwriting" in any Preliminary Prospectus or the Prospectus (to the extent
such statements relate to the Underwriters) constitute
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the only information furnished by any Underwriter to the Company for the
purposes of Section 8 of this Agreement. The Underwriters confirm that such
statements (to such extent) are correct.
13. Notices. All communications under this Agreement shall be in
writing and, if sent to you or the Underwriters, shall be delivered or sent by
mail, telex or facsimile transmission and confirmed in writing to Xxxxx & Co.,
L.L.C., Xxx Xxxxxxxx, Xxxxxxx, Xxxxxxxx 00000, Attention: C. Xxxx Xxxxxxxx;
and to First of Michigan Corporation, 000 Xxxxx Xxxxx, Xxxxx 0000, Xxxxxxx,
Xxxxxxxx 00000, Attention: J. Xxxxxxx Xxxxx; with a copy to Xxxxxxxx Xxxxxx
Xxxxxxxx and Xxxx, 0000 Xxxxx Xxxxxxxx Xxxxxxxx, Xxxxxxx, Xxxxxxxx 00000,
Attention: Xxxxxx X. Xxxx; and if sent to the Company, shall be delivered or
sent by mail, telex or facsimile transmission and confirmed in writing to the
Company at 00000 Xxxxxxxxx Xxxx, Xxxxx 000, Xxxxxxxxxx, Xxxxxxxx 00000-0000,
Attention: Xxxxxxx X. Xxxxxx; with a copy to Xxxx Xxxxxx & Xxxxxx, 000 X.
Xxxxxxxx Xxxxxx, Xxxxx 000, Xxxxxxxxxx Xxxxx, Xxxxxxxx 00000, Attention:
Xxxxxxx X. Gold.
14. Successors. This Agreement shall inure to the benefit of and
shall be binding upon the Underwriters and the Company, and their respective
successors, assigns and legal representatives, and nothing expressed or
mentioned in this Agreement is intended or shall be construed to give any other
person any legal or equitable right, remedy or claim under or in respect of
this Agreement, or any provisions contained in this Agreement, this Agreement
and all conditions and provisions of this Agreement being intended to be and
being for the sole and exclusive benefit of such persons and for the benefit of
no other person except that (i) the indemnities of the Company contained in
Section 8 of this Agreement shall also be for the benefit of the Indemnitees,
including, without limitation, any person or persons who control any
Underwriter within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act and (ii) the indemnities of the Underwriters contained in Section
8 of this Agreement shall also be for the benefit of the directors of the
Company, the officers of the Company who have signed the Registration Statement
and any person or persons who control the Company within the meaning of Section
15 of the Act or Section 20 of the Exchange Act. No purchaser of Shares from
any Underwriter shall be deemed a successor because of such purchase.
15. Applicable Law. The validity and interpretation of this
Agreement, and the terms and conditions set forth in this Agreement, shall be
governed by and construed in accordance with the laws of the State of Michigan,
without giving effect to any provisions relating to conflicts of laws.
16. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
17. Entire Agreement. This Agreement is the parties' entire
agreement concerning its subject matter, and supersedes all prior undertakings
and agreements.
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If the foregoing correctly sets forth our understanding, please indicate
your acceptance of this Agreement in the space provided below for that purpose,
whereupon this letter shall constitute an agreement binding the Company and
each of the Underwriters.
Very truly yours,
XXXXX REALTY INVESTORS, INC.
By:
______________________________
Xxxxxxx X. Xxxxxx
President and Chief Executive
Officer
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
XXXXX & CO., L.L.C.
FIRST OF MICHIGAN CORPORATION
As Representatives of the Several
Underwriters Named in Schedule 3
By: XXXXX & CO., L.L.C.
By: ______________________________
Name: ____________________________
Title: ___________________________
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SCHEDULE 1
SUBSIDIARIES
Jurisdiction of
Name Incorporation
---- ----------------
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SCHEDULE 2
SUBSIDIARY OWNERSHIP
# Shares # Shares Percent
Name Authorized Outstanding Ownership
---- ---------- ----------- ---------
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SCHEDULE 3
Number of
Firm Shares
Underwriter to be Purchased
----------- ---------------
Xxxxx & Co, L.L.C.
First of Michigan Corporation
Total:
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