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EXHIBIT 1
1,000,000 SHARES
MICHIGAN HERITAGE BANCORP, INC.
COMMON STOCK
UNDERWRITING AGREEMENT
February 24, 1997
Xxxxx & Co. L.L.C.
Xxx Xxxxxxxx
Xxxxxxx, Xxxxxxxx 00000
Dear Sirs:
Michigan Heritage Bancorp, Inc., a Michigan corporation (the
"COMPANY"), proposes to issue and sell 1,000,000 shares (the "FIRM SHARES") of
its authorized but unissued Common Stock (the "COMMON STOCK") to Xxxxx & Co.
L.L.C., a Delaware limited liability company ("XXXXX & CO." or "UNDERWRITER").
In addition, the Company proposes to grant to the Underwriter an option to
purchase up to an additional 150,000 shares (the "OPTIONAL SHARES") to cover
over-allotments. The Firm Shares and the Optional Shares are called,
collectively, the "SHARES."
1. SALE AND PURCHASE OF THE SHARES.
(a) On the basis of the representations, warranties and
agreements of the Company contained in, and subject to the terms
and conditions of, this Agreement, the Company agrees to issue and
sell to the Underwriter, and the Underwriter agrees to purchase
the Firm Shares at a purchase price of $9.30 per Share, except as
set forth in Section 1(b) below.
(b) On the basis of the representations, warranties and
agreements of the Company contained in, and subject to the terms
and conditions of, this Agreement, and pursuant to directions from
the Company, the Underwriter will offer to sell to each of the
persons named in a list provided by the Company to the Underwriter
(who may purchase alone or with family members to the extent
permitted by the Free-Riding and Withholding Interpretation (the
"INTERPRETATION") under the Rules of Fair Practice of the National
Association of Securities Dealers, Inc. (the "NASD")) the number
of Shares set forth opposite their respective names. To the
extent such persons (alone or with such family
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members) offer to buy such Shares, the Underwriter agrees to purchase
up to 300,000 of such Shares at a purchase price of $10.00 per Share.
The purchase price for such Shares over 300,000 shall be as set forth in
Section 1(b) above. The parties agree that the securities purchased and
sold under this subparagraph to the Company's employees and directors
shall constitute "issuer directed securities" under the Interpretation.
The provisions of this Section 1(b) shall not affect the Underwriter's
right, with respect to persons who are not employees or directors of the
Company, to withdraw, cancel or modify orders or to reject orders in
whole or in part.
(c) On the basis of the representations, warranties and
agreements of the Company contained in, and subject to the terms
and conditions of, this Agreement, the Company grants to the
Underwriter an option to purchase all or any part of the Optional
Shares at a price per Share of $9.30. The over-allotment option
may be exercised only to cover over-allotments in the sale of the
Firm Shares by the Underwriter and may be exercised in whole or in
part at any time or times on or before 12:00 noon, Detroit time,
on the day before the Firm Shares Closing Date (as defined in
Section 2 below), and only once at any time after that date and
within 30 days after the Effective Date (as defined in Section 4
below), in each case upon written or transmitted facsimile notice,
or verbal notice confirmed by transmitted facsimile, written or
telegraphic notice, by Xxxxx & Co. to the Company no later than
12:00 noon, Detroit time, on the day before the Firm Shares
Closing Date or at least three but not more than five full
business days before the Optional Shares Closing Date (as defined
in Section 2 below), as the case may be, setting forth the number
of Optional Shares to be purchased and the time and date (if other
than the Firm Shares Closing Date) of such purchase.
2. DELIVERY AND PAYMENT. Delivery by the Company of the Firm Shares to
Xxxxx & Co. and payment of the purchase price by certified or official bank
check payable in Detroit Clearing House (next day) funds to the Company, shall
take place at the offices of Xxxxx & Co., Xxx Xxxxxxxx, Xxxxxxx, Xxxxxxxx
00000, at 10:00 a.m., Detroit time, at such time and date, not later than the
third (or, if the Firm Shares are priced, as contemplated by Rule 15c6-1(c)
under the Securities Exchange Act of 1934, as amended (the "EXCHANGE ACT"),
after 4:30 p.m., Washington, D.C. time, the fourth) full business day following
the first date that any of the Shares are released by the Underwriter for sale
to the public, as Xxxxx & Co. shall designate by at least 48 hours prior notice
to the Company (the "FIRM SHARES CLOSING DATE"); provided, however, that if the
Prospectus (as defined in Section 4 below) is at any time prior to the Firm
Shares Closing Date recirculated to the public, the Firm Shares Closing Date
shall occur upon the later of the third or fourth, as the case the may be, full
business day following the first date that any of the Shares are released by
the Underwriter for sale to the public or the date that is 48 hours after the
date that the Prospectus has been so recirculated.
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To the extent the option with respect to the Optional Shares is
exercised, delivery by the Company of the Optional Shares, and payment of the
purchase price by certified or official bank check payable in Detroit Clearing
House (next day) funds to the Company, shall take place at the offices of Xxxxx
& Co. specified above at the time and on the date (which may be the Firm Shares
Closing Date) specified in the notice referred to in Section l(c) (such time
and date of delivery and payment are called the "OPTIONAL SHARES CLOSING
DATE"). The Firm Shares Closing Date and the Optional Shares Closing Date are
called, individually, a "CLOSING DATE" and, collectively, the "CLOSING DATES."
Certificates representing the Firm Shares shall be registered in such
names and shall be in such denominations as Xxxxx & Co. shall request at least
two full business days before the Firm Shares Closing Date or, in the case of
the Optional Shares, on the day of notice of exercise of the option as
described in Section l(c), and shall be made available to Xxxxx & Co. for
checking and packaging, at such place as is designated by Xxxxx & Co., at least
one full business day before the Closing Date.
3. PUBLIC OFFERING. The Company understands that the Underwriter
proposes to make a public offering of the Shares, as set forth in and pursuant
to the Prospectus, as soon after the Effective Date as Xxxxx & Co. deems
advisable. The Company hereby confirms that the Underwriter and dealers have
been authorized to distribute each preliminary prospectus and are authorized to
distribute the Prospectus (as from time to time amended or supplemented).
4. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company represents and warrants to the Underwriter and agrees
with the Underwriter as follows:
(a) The Company has carefully prepared in conformity with the
requirements of the Securities Act of 1933, as amended (the
"SECURITIES ACT") and the rules and regulations adopted by the
Securities and Exchange Commission (the "COMMISSION") thereunder
(the "RULES"), a registration statement on Form SB-2 (No.
333-17317), including a preliminary prospectus, and has filed with
the Commission the registration statement and such amendments
thereof as may have been required to the date of this Agreement.
Copies of such registration statement (including all amendments
thereof) and of the related preliminary prospectus have heretofore
been delivered by the Company to you. The term "PRELIMINARY
PROSPECTUS" means any preliminary prospectus (as defined in Rule
430 of the Rules) included at any time as a part of the
registration statement. The registration statement as amended
(including any supplemental registration statement under Rule
462(b) or any amendment under Rule 462(c) of the Rules) at the
time and on the date it becomes effective (the "EFFECTIVE DATE"),
including the prospectus, financial statements, schedules, exhibits, and
all other documents
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incorporated by reference therein or filed as a part thereof, is
called the "REGISTRATION STATEMENT;" provided, however, that
"REGISTRATION STATEMENT" shall also include all Rule 430A
Information (as defined below) deemed to be included in such
Registration Statement at the time such Registration Statement
becomes effective as provided by Rule 430A of the Rules. The term
"PROSPECTUS" means the Prospectus as filed with the Commission
pursuant to Rule 424(b) of the Rules or, if no filing pursuant to
Rule 424(b) of the Rules is required, means the form of final
prospectus included in the Registration Statement at the time such
Registration Statement becomes effective. The term "RULE 430A
INFORMATION" means information with respect to the Shares and the
offering thereof permitted to be omitted from the Registration
Statement when it becomes effective pursuant to Rule 430A of the
Rules. Reference made herein to any preliminary prospectus or to
the Prospectus shall be deemed to refer to and include any
document attached as an exhibit thereto or incorporated by
reference therein, as of the date of such preliminary prospectus
or the Prospectus, as the case may be. The Company will not file
any amendment of the Registration Statement or supplement to the
Prospectus to which Xxxxx & Co. shall reasonably object in writing
after being furnished with a copy thereof.
(b) Each preliminary prospectus, at the time of filing
thereof, contained all material statements which were required to
be stated therein in accordance with the Securities Act and the
Rules, and conformed in all material respects with the
requirements of the Securities Act and the Rules, and did not
include any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under
which they were made, not misleading. The Commission has not
issued any order suspending or preventing the use of any
preliminary prospectus. When the Registration Statement shall
become effective, when the Prospectus is first filed pursuant to
Rule 424(b) of the Rules, when any post-effective amendment of the
Registration Statement shall become effective, when any supplement
to or pre-effective amendment of the Prospectus is filed with the
Commission and at each Closing Date, the Registration Statement
and the Prospectus (and any amendment thereof or supplement
thereto) will comply with the applicable provisions of the
Securities Act and the Exchange Act and the respective rules and
regulations of the Commission thereunder, and neither the
Registration Statement nor the Prospectus, nor any amendment
thereof or supplement thereto, will contain any untrue statement
of a material fact or will omit to state any material fact
required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they
were made, not misleading; provided, however, that the Company
makes no representation or warranty as to the information
contained in the Registration Statement or the Prospectus or any
amendment thereof or supplement thereto in
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reliance upon and in conformity with information furnished in writing
to the Company by the Underwriter, specifically for use in connection
with the preparation thereof.
(c) All contracts and other documents required to be filed as
exhibits to the Registration Statement have been filed with the
Commission as exhibits to the Registration Statement.
(d) Xxxxxx & Xxxxx, LLP, whose report is filed with the
Commission as part of the Registration Statement, are, and during
the periods covered by their report were, independent public
accountants as required by the Securities Act and the Rules.
(e) The Company and its subsidiary, Michigan Heritage Bank, a
Michigan banking corporation (the "BANK"), have been duly
organized and are validly existing as a corporation or banking
corporation, as applicable, in good standing under the laws of the
State of Michigan. Neither the Company nor the Bank have any
properties or conduct any business outside of the State of
Michigan which would require either of them to be qualified as a
foreign corporation or bank, as the case may be, in any
jurisdiction outside of Michigan. Neither the Company nor the
Bank has any directly or indirectly held subsidiary other than the
Bank. The Company has all power, authority, authorizations,
approvals, consents, orders, licenses, certificates and permits
needed to enter into, deliver and perform this Agreement and to
issue and sell the Shares.
(f) The application for permission to organize the Bank (the
"FIB APPLICATION") was approved by the Commissioner of the
Financial Institutions Bureau for the State of Michigan (the
"COMMISSIONER") on November 25, 1996, pursuant to Order No.
BT-0612-96-04, subject to certain conditions specified in the
Order and supplemental correspondence from the Commissioner dated
the same date. The Order and supplemental correspondence from
the Commissioner are collectively referred to in this Agreement as
the "FIB ORDER." All conditions contained in the FIB Order
required to be satisfied before the date of this Agreement have
been satisfied. The application to the Federal Deposit Insurance
Corporation (the "FDIC") to become an insured depository
institution under the provisions of the Federal Deposit Insurance
Act (the "FDIC APPLICATION") was approved by order of the FDIC
dated January 10, 1997 (the "FDIC ORDER"), subject to certain
conditions specified in the Order. All conditions contained in
the FDIC Order required to be satisfied before the date of this
Agreement have been satisfied. The Company's application to
become a bank holding company and acquire all issued capital stock
of the Bank and the Bank's application to become a member of the Federal
Reserve System (collectively, the "BANK
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HOLDING COMPANY APPLICATION") under the Bank Holding Company Act
of 1956, as amended, was approved on January 29, 1997
(collectively, the "FEDERAL RESERVE BOARD APPROVAL"), subject to
certain conditions specified in the Federal Reserve Board
Approval. All conditions in the Federal Reserve Board Approval
required to be satisfied before the date of this Agreement have
been satisfied. Each of the FIB Application, FDIC Application, and
Bank Holding Company Application, at the time of their respective
filings, contained all required information and such information
was complete and accurate in all material respects. Other than
the remaining conditions to be fulfilled under the FIB Order, FDIC
Order and the Federal Reserve Board Approval specified above, no
authorization, approval, consent, order, license, certificate or
permit of and from any federal, state, or local governmental or
regulatory official, body, or tribunal, is required for the
Company or the Bank to commence and conduct their respective
businesses and own their respective properties as described in the
Prospectus, except such authorizations, approvals, consents,
orders, licenses, certificates, or permits as are not material to
the commencement or conduct of their respective businesses or to
the ownership of their respective properties.
(g) The financial statements of the Company and any related
notes thereto, included in the Registration Statement and the
Prospectus, present fairly the financial position of the Company
as of the date of such financial statements and for the period
covered thereby. Such statements and any related notes have been
prepared in accordance with generally accepted accounting
principals applied on a consistent basis and certified by the
independent accountants named in subsection 4(d) above. No other
financial statements are required to be included in the Prospectus
or the Registration Statement.
(h) The Company owns adequate and enforceable rights to use
any patents, patent applications, trademarks, trademark
applications, service marks, copyrights, copyright applications
and other similar rights (collectively, "INTANGIBLES") necessary
for the conduct of the material aspects of its business as
described in the Prospectus and the Company has not infringed, is
infringing, or has received any notice of infringement of, any
Intangible of any other person.
(i) The Company has a valid and enforceable leasehold
interest in the real property located at 00000 Xxxxxxxx Xxxx,
Xxxx, Xxxxxxxx, which is as described in the Prospectus, and is
free and clear of all liens, encumbrances, claims, security
interests and defects.
(j) There are no litigation or governmental or other proceedings
or investigations pending before any court or before or by any public
body or board or threatened against the Company or the Bank and to the
best of the Company's
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knowledge, there is no reasonable basis for any such litigation,
proceedings or investigations, which would have a material adverse
effect on commencement or conduct of the respective businesses of the
Company or the Bank or the ownership of their respective properties.
(k) The Company and Bank have filed all federal, state, and
local tax returns required to be filed by them and paid all taxes
shown due on such returns as well as all other material taxes,
assessments and governmental charges which have become due; no
material deficiency with respect to any such return has been
assessed or proposed.
(l) Subsequent to the respective dates as of which
information is given in the Registration Statement and the
Prospectus, there has not been any material adverse change in the
condition (financial or other), business, properties or prospects
of the Company.
(m) No default exists, and no event has occurred which with
notice or lapse of time, or both, would constitute a default, in
the due performance and observance of any material term, covenant
or condition, by the Company, the Bank or, to the best of the
Company's knowledge, any other party, of any lease, indenture,
mortgage, note or any other agreement or instrument to which the
Company or the Bank is a party or by which either of them or
either of their businesses may be bound or affected, except such
defaults or events as are not material to the commencement or
conduct of their respective businesses or ownership of their
respective properties.
(n) Neither the Company nor the Bank is in violation of any
term or provision of the articles of incorporation or bylaws of
the Company or the Bank. Neither the Company nor the Bank is in
violation of, nor is either of them required to take any action to
avoid any material violation of, any franchise, license, permit,
judgment, decree, order, statute, rule or regulation.
(o) Neither the execution, delivery or performance of this
Agreement by the Company nor the consummation of the transactions
contemplated hereby (including, without limitation, the issuance
and sale by the Company of the Shares) will give rise to a right
to terminate or accelerate the due date of any payment due under,
or conflict with or result in the breach of any term or provision
of, or constitute a default (or an event which with notice or
lapse of time, or both, would constitute a default) under, or require any
consent under, or result in the execution or imposition of any lien,
charge or encumbrance upon any properties or assets of the Company or the
Bank pursuant to the terms of, any lease, indenture, mortgage,
note or other agreement or instrument to which the
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Company or the Bank is a party or by which either of them or either of
their businesses may be bound or affected, or any franchise, license,
permit, judgment, decree, order, statute, rule or regulation or violate
any provision of the articles of incorporation or bylaws of the Company
or the Bank, except those which are immaterial in amount or effect.
(p) The Company has authorized capital stock as set forth in
the Prospectus. One share of Common Stock of the Company is
issued and outstanding, which will be redeemed at or promptly
following the Closing if permitted by applicable law. No shares
of preferred stock are issued and outstanding. The issuance, sale
and delivery of the Shares have been duly authorized by all
necessary corporate action by the Company and, when issued, sold
and delivered against payment therefor pursuant to this Agreement,
will be duly and validly issued, fully paid and nonassessable and
none of them will have been issued in violation of any preemptive
or other right. Upon issuance, sale, and delivery thereof against
payment therefor pursuant to the subscription agreement, all of
the capital stock of the Bank will be duly authorized and validly
issued, fully paid and nonassessable and will be owned by the
Company, free and clear of all liens, encumbrances and security
interests (subject to the provisions of the Michigan Banking Code
of 1969 (the "BANKING CODE"), including, without limitation,
Sections 77 and 201 of the Banking Code). There is no outstanding
option, warrant or other right calling for the issuance of, and no
commitment, plan or arrangement to issue, any share of stock of
the Company or the Bank or any security convertible into or
exchangeable for stock of the Company or the Bank, except for
stock options described in the Registration Statement (the "STOCK
OPTIONS") under the 1997 Employee Stock Option Plan and the 1997
Nonemployee Director Stock Option Plan (collectively, the "STOCK
OPTION PLANS"). The Common Stock, the Shares and the Stock
Options conform to all statements in relation thereto contained in
the Registration Statement and the Prospectus.
(q) Subsequent to the respective dates as of which
information is given in the Registration Statement and the
Prospectus, neither the Company nor the Bank has (1) issued any
securities or incurred any material liability or obligation,
direct or contingent, (2) entered into any material transaction,
or (3) declared or paid any dividend or made any distribution on
any of their stock, except liabilities, obligations, and
transactions reasonably expected based on the disclosures in the
Prospectus, and redemption of one share of Common Stock for $10 at
or promptly following the Closing if permitted by applicable law.
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(r) This Agreement has been duly and validly authorized,
executed and delivered by the Company and is the legal, valid and
binding agreement and obligation of the Company.
(s) The Commission has not issued any order preventing or
suspending the use of any preliminary prospectus.
(t) Neither the Company, nor the Bank, nor, to the Company's
knowledge any director, officer, agent, employee or other person
associated with the Company or the Bank, acting on behalf of the
Company or the Bank, has used any corporate funds for any unlawful
contribution, gift, entertainment or other unlawful expense
relating to political activity; made any direct or indirect
unlawful payment to any foreign or domestic government official or
employee from corporate funds; violated or is in violation of any
provision of the Foreign Corrupt Practices Act of 1977; or made
any bribe, rebate, payoff, influence payment, kickback or other
unlawful payment.
(u) Neither the Company nor the Bank nor any affiliate of
either of them has taken, and they will not take, directly or
indirectly, any action designed to cause or result in, or which
has constituted or which might reasonably be expected to
constitute, the stabilization or manipulation of the price of the
shares of the Common Stock in order to facilitate the sale or
resale of any of the Shares.
(v) No transaction has occurred between or among the Company
or the Bank and any of their officers, directors, organizers or
the Company's shareholder or any affiliate or affiliates of any
such officer, director, organizer, or shareholder, that is
required to be described in and is not described in the
Prospectus.
(w) The Company is not and will not after the offering be an
"investment company", or a company "controlled" by an "investment
company", within the meaning of the Investment Company Act of
1940, as amended.
(x) The Company has obtained from all of its executive
officers and directors their written agreement that (i) for a
period of 180 days from the date of the Effective Date, they will
not offer to sell, sell, transfer, contract to sell, or grant any
option for the sale of or otherwise dispose of, directly or
indirectly, any shares of Common Stock of the Company (or any
securities convertible into or exercisable for such shares of
Common Stock), except for (1) the exercise of Stock Options under
the Stock Option Plans or (2) gifts of Common Stock (or other
securities) to a donee or donees who agree in writing to be bound
by this clause, and (ii) for a period of three months from the
date of the Effective Date,
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they will not sell, transfer, assign, pledge, or hypothecate any
shares of Common Stock acquired under Paragraph 1(b), above, except
with respect to Xxxxxxx Xxxxxxxx who may resell one share of Common
Stock to the Company.
5. CONDITIONS OF THE UNDERWRITER'S OBLIGATIONS. The obligation of the
Underwriter to purchase the Shares shall be subject to the accuracy of the
representations and warranties of the Company in this Agreement as of the date
of this Agreement and as of the Firm Shares Closing Date or Optional Shares
Closing Date, as the case may be, to the accuracy of the statements of Company
officers made pursuant to the provisions of this Agreement, to the performance
by the Company of its obligations under this Agreement, and to the following
additional terms and conditions:
(a) The Registration Statement shall have become effective
not later than 5:00 P.M., Detroit time, on the date of this
Agreement or on such later date and time as shall be consented to
in writing by Xxxxx & Co.; if the filing of the Prospectus, or any
supplement thereto, is required pursuant to Rule 424(b) of the
Rules, the Prospectus shall have been filed in the manner and
within the time period required by Rule 424(b) of the Rules; at
each Closing Date, if any, no stop order shall have been issued or
proceedings therefor initiated or threatened by the Commission;
and any request of the Commission for inclusion of additional
information in the Registration Statement, or otherwise, shall
have been complied with to the reasonable satisfaction of Xxxxx &
Co.
(b) At each Closing Date, Xxxxx & Co. shall have received the
opinion of Xxxxxx Xxxxxxx PLLC, counsel for the Company, dated the
Firm Shares Closing Date or the Optional Shares Closing Date, as
the case may be, addressed to the Underwriter and in form and
scope reasonably satisfactory to counsel for Xxxxx & Co. to the
effect that:
(i) Each of the Company and the Bank (A) is a
corporation or banking corporation, as applicable, existing
and in good standing under the laws of the State of Michigan
and (B) is not required to be qualified to do business in
any jurisdiction outside Michigan, except where the failure
to so qualify would not have a material adverse effect on
the Company or the Bank.
(ii) Each of the Company and the Bank has full
corporate power and authority and all material
authorizations, approvals, orders, licenses, certificates
and permits of and from all governmental regulatory
officials and bodies necessary to own or lease their
respective properties and conduct their respective businesses as
described in the Registration Statement and Prospectus;
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(iii) The Company has authorized capital stock as set
forth in the Prospectus and, prior to the Closing, had one
share of Common Stock issued and outstanding; the Shares
have been duly authorized and validly issued and upon
receipt by the Company of payment therefor in accordance
with the terms of this Agreement will be fully paid and
nonassessable and are not subject to preemptive rights; the
Shares and the other capital stock and Stock Options of the
Company conform in all material respects to the descriptions
thereof contained in the Registration Statement and the
Prospectus;
(iv) To such counsel's knowledge, after due inquiry,
the Company has no directly or indirectly held subsidiary
other than the Bank;
(v) When issued, sold, and delivered against payment
therefor in accordance with the terms of the subscription
agreement, the Company will be the registered holder of all
of the outstanding capital stock of the Bank, and all such
shares of stock so held will be duly authorized and validly
issued, fully paid and nonassessable and will be owned free
and clear of any liens, encumbrances or other claims or
restrictions whatsoever, subject to the provisions of the
Banking Code;
(vi) The certificates evidencing the Shares are in the
form approved by the Board of Directors of the Company,
comply with the bylaws and the articles of incorporation of
the Company, and comply as to form and in all other material
respects with applicable legal requirements;
(vii) This Agreement has been duly and validly
authorized, executed and delivered by the Company, and is
the legal, valid and binding agreement and obligation of the
Company enforceable in accordance with its terms, except (a)
as enforcement thereof may be limited by bankruptcy,
insolvency, reorganization, moratorium or other laws
relating to or affecting enforcement of creditors' rights or
by general equity principles, whether applied in an action
at law or in equity, or by the discretionary nature of
specific performance, injuncture relief, and other equitable
remedies, including the appointment of a receiver, and (b),
with respect to provisions relating to indemnification and
contribution, to the extent they are held by a court of
competent jurisdiction to be void or unenforceable as
against public policy;
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(viii) The Company is conveying to the Underwriter good
and valid title to the Shares, free and clear of any liens,
encumbrances, security interests, restrictions, and adverse
claims;
(ix) To the best of such counsel's knowledge, after due
inquiry, there are (A) no contracts or other documents which
are required to be filed as exhibits to the Registration
Statement other than those filed as exhibits thereto, (B) no
legal or governmental proceedings pending or threatened
against the Company or the Bank, and (C) no statutes or
regulations applicable to the Company or the Bank, or
certificates, permits, grants or other consents, approvals,
orders, licenses or authorizations from regulatory officials
or bodies, which are required to be obtained or maintained
by the Company or the Bank and which are of a character
required to be disclosed in the Registration Statement and
Prospectus which have not been so disclosed and properly
described therein;
(x) The statements in the Registration Statement and
the Prospectus, insofar as they are descriptions of
corporate documents, stock option plans, contracts,
agreements or other documents specifically identified in the
Registration Statement or descriptions of laws, regulations,
or regulatory requirements, or refer to compliance with law
or to statements of law or legal conclusions, are correct in
all material respects;
(xi) To the best of such counsel's knowledge, after due
inquiry, the execution, delivery and performance of this
Agreement, the consummation of the transactions herein
contemplated and the compliance with the terms and
provisions hereof by the Company will not give rise to a
right to terminate or accelerate the due date of any payment
due under, or conflict with or result in a breach of any of
the terms or provisions of, or constitute a default (or an
event which, with notice or lapse of time, or both, would
constitute a default) under, or require any consent under,
or result in the execution or imposition of any lien, charge
or encumbrance upon any properties or assets of the Company
or the Bank pursuant to the terms of, any lease, indenture,
mortgage, note or other agreement or instrument to which the
Company or the Bank is a party or by which either of them or
either of their properties or businesses is or may be bound
or affected, nor will such action result in any violation of
the provisions of the articles of incorporation or bylaws of
the Company or the Bank or any statute or any order, rule,
or regulation applicable to the Company or the Bank of any
court or any federal, state, local or other
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regulatory authority or other governmental body, the effect of
which, in any such case, would be expected to have a material
adverse effect to the Company or the Bank;
(xii) To the best of such counsel's knowledge, after
due inquiry, no consent, approval, authorization or order of
any court or governmental agency or body, domestic or
foreign, is required to be obtained by the Company in
connection with the execution and delivery of this Agreement
or the sale of the Shares to the Underwriter as contemplated
by this Agreement, except such as have been obtained;
(xiii) To the best of such counsel's knowledge, after
due inquiry, (A) neither the Company nor the Bank is in
breach of, or in default (and no event has occurred which,
with notice or lapse of time, or both, would constitute a
default) under, any lease, indenture, mortgage, note, or
other agreement or instrument to which the Company or the
Bank is a party; or (B) neither the Company nor the Bank is
in violation of any term or provision of either of their
articles of incorporation or bylaws, or of any franchise,
license, grant, permit, judgment, decree, order, statute,
rule or regulation; and (C) neither the Company nor the Bank
has received any notice of conflict with the asserted rights
of others in respect of Intangibles necessary for the
commencement or conduct of its business, the effect of
which, in any such case, would be expected to have a
material adverse effect on the Company or the Bank;
(xiv) The Registration Statement and the Prospectus and
any amendments or supplements thereto (other than the
financial statements as to which no opinion need be
rendered) comply as to form in all material respects with
the requirements of the Securities Act and the Rules; and
(xv) The Registration Statement is effective under the
Securities Act, and 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, to the
best of such counsel's knowledge, after due inquiry, 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 are contemplated by the
Commission.
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In rendering the foregoing opinion, such counsel may rely upon
certificates of public officials (as to matters of fact and law) and
officers of the Company (as to matters of fact), and include customary
qualifications in its opinion as are acceptable to Xxxxx & Co. Copies of
all such certificates shall be furnished to counsel to Xxxxx & Co. on the
Closing Date.
In addition, such counsel shall state that they have
participated in conferences with officials of the Company and its
independent auditors, and representatives of the Underwriter and
its counsel at which the content of the Registration Statement and
Prospectus 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. Such counsel did not independently verify the
accuracy or completeness of the statements made in the
Registration Statement and Prospectus; however, based on such
counsel's examination of the Registration Statement and the
Prospectus and on its participation in the above-mentioned
conferences, nothing has come to the attention of such counsel
that gives them reason to believe that the Registration Statement
or Prospectus (other than financial statements and notes, any
related schedules or other financial information contained in such
Registration Statement or Prospectus as to which such counsel need
express no opinion or belief), 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 (other than financial statement
and notes, any related schedules or other financial information
contained in such Prospectus or amendment or supplement thereto,
as to which such counsel need express no opinion or belief), as of
the date of the opinion, contains any untrue statement of a
material fact or omits to state a material fact necessary to make
the statements therein, in light of the circumstances under which
they were made, not misleading.
(c) On or prior to each Closing Date, Xxxxx & Co. shall have
been furnished such documents, certificates and opinions as they
may reasonably require for the purpose of enabling them to review
the matters referred to in subsection (b) of this Section 5, and
in order to evidence the accuracy, completeness or satisfaction of
the representations, warranties or conditions herein contained.
(d) Prior to each Closing Date, (i) there shall have been no
material adverse change in the condition or prospects, financial
or otherwise, of the Company or the Bank; (ii) there shall have
been no material transaction, not in the ordinary course of
business, entered into by the Company or the Bank except
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as set forth in the Registration Statement and Prospectus, other than
transactions referred to or contemplated therein or to which Xxxxx
& Co. has given its written consent; (iii) neither the Company nor
the Bank shall be in default (nor shall an event have occurred
which, with notice or lapse of time, or both, would constitute a
default) under any provision of any material agreement,
understanding or instrument relating to any outstanding
indebtedness that is material in amount; (iv) no action, suit or
proceeding, at law or in equity, shall be pending or threatened
against the Company or the Bank before or by any court or Federal,
state or other commission, board or other administrative agency
having jurisdiction over the Company or the Bank, as the case may
be, which is expected to have a material adverse effect on the
Company or the Bank; and (v) no stop order shall have been issued
under the Securities Act and no proceedings therefor shall have
been initiated or be threatened by the Commission.
(e) At each Closing Date, Xxxxx & Co. shall have received a
certificate signed by the Chairman of the Board, the President,
and the Treasurer of the Company dated the Firm Shares Closing
Date or Optional Shares Closing Date, as the case may be, to the
effect that the conditions set forth in subsection (d) above have
been satisfied and as to the accuracy, as of the Firm Shares
Closing Date or the Optional Shares Closing Date, as the case may
be, of the representations and warranties of the Company set forth
in Section 4 hereof.
(f) At or prior to each Closing Date, Xxxxx & Co. shall have
received a "blue sky" memorandum (upon which Xxxxx & Co. may rely)
of Xxxxxx Xxxxxxx PLLC, counsel for the Company, addressed to
Xxxxx & Co. and in form and scope reasonably satisfactory to Xxxxx
& Co. concerning compliance with the blue sky or securities laws
of the states listed in Exhibit A attached to this Agreement.
(g) All proceedings taken in connection with the sale of the
Shares as herein contemplated shall be reasonably satisfactory in
form and substance to Xxxxx & Co. and to counsel for Xxxxx & Co.,
and Xxxxx & Co. shall have received from counsel for Xxxxx & Co. a
favorable opinion, dated as of each Closing Date, with respect to
such of the matters set forth under Subsections (b) (i), (iii),
(vi), (vii), and (xv) of this Section 5, and with respect to such
other related matters as Xxxxx & Co. may require, if the failure
to receive a favorable opinion with respect to such other related
matters would cause Xxxxx & Co. to deem it inadvisable to proceed
with the sale of the Shares.
(h) There shall have been duly tendered to Xxxxx & Co. certificates
representing all the Shares agreed to be sold by the Company on the Firm
Shares Closing Date or the Optional Shares Closing Date, as the case may
be.
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(i) No order suspending the sale of the Shares prior to each
Closing Date, in any jurisdiction listed in Exhibit A, shall have
been issued on the Firm Shares Closing Date or the Optional Shares
Closing Date, as the case may be, and no proceedings for that
purpose shall have been instituted or, to Xxxxx & Co.'s knowledge
or that of the Company, shall be contemplated.
(j) The NASD, upon review of the terms of the public offering
of the Shares, shall not have objected to the Underwriter's
participation in the same.
If any condition to the Underwriter's obligations hereunder to be
fulfilled prior to or at the Firm Shares Closing Date or the Optional Shares
Closing Date, as the case may be, is not so fulfilled, Xxxxx & Co. may
terminate this Agreement pursuant to Section 9(c) hereof or, if Xxxxx & Co. so
elects, waive any such conditions which have not been fulfilled or extend the
time of their fulfillment.
6. COVENANTS.
The Company covenants and agrees that it will:
(a) Use its best efforts to cause the Registration Statement
to become effective and will notify Xxxxx & Co. immediately, and
confirm the notice in writing, (i) when the Registration Statement
and any post-effective amendment thereto becomes effective, (ii)
of the issuance by the Commission of any stop order or of the
initiation, or the threatening, of any proceedings for that
purpose and (iii) of the receipt of any comments from the
Commission. The Company will make every reasonable effort to
prevent the issuance of a stop order, and, if the Commission shall
enter a stop order at any time, the Company will make every
reasonable effort to obtain the lifting of such order at the
earliest possible moment.
(b) During the time when a prospectus is required to be
delivered under the Securities Act, comply so far as it is able
with all requirements imposed upon it by the Securities Act, as
now and hereafter amended, and by the Rules, as from time to time
in force, so far as necessary to permit the continuance of sales
of or dealings in the Shares. If at any time when a prospectus
relating to the Shares is required to be delivered under the
Securities Act any event shall have occurred as a result of which,
in the reasonable opinion of counsel for the Company or counsel
for Xxxxx & Co., the Registration Statement or Prospectus as then
amended or supplemented includes an untrue statement of a material fact or
omits to state any material fact required to be stated therein or
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or if it
is necessary at any time to amend or
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supplement the Registration Statement or Prospectus to comply with the
Securities Act, the Company will notify Xxxxx & Co. promptly and prepare
and file with the Commission an appropriate amendment or supplement in
form satisfactory to Xxxxx & Co. The cost of preparing, filing and
delivering copies of such amendment or supplement shall be paid by
the Company.
(c) Deliver to the Underwriter such number of copies of each
preliminary prospectus as may reasonably be requested by Xxxxx &
Co. and, as soon as the Registration Statement, or any amendment
or supplement thereto, becomes effective, deliver to the
Underwriter three signed copies of the Registration Statement,
including exhibits, and all post-effective amendments thereto and
deliver to the Underwriter such number of copies of the
Prospectus, the Registration Statement and supplements and
amendments thereto, if any, without exhibits, as Xxxxx & Co. may
reasonably request.
(d) Endeavor in good faith, in cooperation with Xxxxx & Co.
and its counsel, at or prior to the time the Registration
Statement becomes effective, to qualify the Shares for offering
and sale under the securities laws relating to the offering or
sale of the Shares of the states listed in Exhibit A. In each
jurisdiction where such qualification shall be effected, the
Company will, unless Xxxxx & Co. agrees that such action is not at
the time necessary or advisable, file and make such statements or
reports at such times as are or may reasonably be required by the
laws of such jurisdiction. The Company will advise Xxxxx & Co.
promptly of the suspension of the qualification of the Shares for
offering, sale or trading in any jurisdiction, or any initiation
or threat of any proceeding for such purpose, and in the event of
the issuance of any order suspending such qualification, the
Company, with the cooperation of Xxxxx & Co., will use all
reasonable efforts to obtain the withdrawal thereof.
(e) Furnish its security holders as soon as practicable an
earnings statement (which need not be certified by independent
certified public accountants unless required by the Securities Act
or the Rules) covering a period of at least twelve months
beginning after the effective date of the Registration Statement,
which shall satisfy the provisions of Section 11(a) of the
Securities Act and the Rules thereunder.
(f) For a period of five years from the Effective Date, furnish
to its shareholders annual audited and quarterly unaudited consolidated
financial statements with respect to the Company including balance sheets
and income statements.
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(g) For a period of five years from the Effective Date,
furnish to Xxxxx & Co. the following:
(i) at the time they have been sent to shareholders of
the Company or filed with the Commission one copy of each
annual, quarterly, interim, or current financial and other
report or communication sent by the Company to its
shareholders or filed with the Commission;
(ii) as soon as practicable, one copy of every press
release and every material news item and article in respect
of the Company or the affairs of the Company which was
released by the Company;
(iii) all other information reasonably requested by
Xxxxx & Co. with respect to the Company to comply with Rule
15c2-11 of the Rules and Section 4 of Schedule H of the NASD
By-Laws; and
(iv) such additional documents and information with
respect to the Company and its affairs as Xxxxx & Co. may
from time to time reasonably request.
(h) Acquire all of the Bank's outstanding capital stock, free
and clear of all liens, encumbrances, or other claims or
restrictions whatsoever, for not less than $7,500,000 from the
proceeds of the offering and, in all other material respects,
apply the net proceeds from the offering in the manner set forth
under "Use of Proceeds" in the Prospectus.
(i) Not file any amendment or supplement to the Registration
Statement or Prospectus after the effective date of the
Registration Statement to which Xxxxx & Co. shall reasonably
object in writing after being furnished a copy thereof.
(j) Timely file with the Commission reports on Form SR (if
applicable) containing the information required by that Form in
accordance with the provisions of Rule 463 of the Regulation under
the Act.
(k) Comply with all registration, filing and reporting
requirements of the Securities Act or the Exchange Act, which may from
time to time be applicable to the Company.
(l) Cause the proper submission of the Certificate of Paid In
Capital and Surplus, give advance written notice to the
Commissioner of the Bank's projected opening date, and in all
other respects use reasonable efforts to comply
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with the requirements of, and satisfy the conditions of, the FIB Order,
the FDIC Order and the Federal Reserve Board Approval; provided, however,
that it shall not be a breach of this Section 6(l) for the Company or the
Bank to fail to maintain any specified level of capital, surplus, capital
ratio, valuation reserve or financial or operating performance after the
Bank has commenced the business of banking if such failure is waived or
performance of such requirement or condition is accepted as sufficient by
the FIB, the FDIC, and/or the Federal Reserve Board, as applicable.
(m) Pay, or reimburse if paid by the Underwriter, whether or
not the transactions contemplated hereby are consummated or this
Agreement is terminated, all costs and expenses incident to the
performance of the obligations of the Company under this
Agreement, including those relating to (1) the preparation,
printing, filing and delivery of the Registration Statement,
including all exhibits thereto, each preliminary prospectus, the
Prospectus, all amendments of and supplements to the Registration
Statement and the Prospectus, and the printing of the Underwriting
Agreement and related agreements including, without limitation,
the Dealer Agreement, (2) the issuance of the Shares and the
preparation and delivery of certificates for the Shares to the
Underwriter, (3) the registration or qualification of the Shares
for offer and sale under the securities or "blue sky" laws of the
various jurisdictions referred to in Exhibit A, including the fees
and disbursements of counsel in connection with such registration
and qualification and the preparation and printing of preliminary,
supplemental, and final blue sky memoranda, (4) the furnishing
(including costs of shipping and mailing) to the Underwriter of
copies of each preliminary prospectus, the Prospectus and all
amendments of or supplements to the Prospectus, and of the several
documents required by this Section to be so furnished, (5) the
filing requirements and fees of the NASD in connection with its
review of the terms of the public offering and the underwriting,
(6) the furnishing (including costs of shipping and mailing) of
copies of all reports and information required by Section 6(g),
(7) all transfer taxes, if any, with respect to the sale and
delivery of the Shares by the Company to the Underwriter, (8) the
inclusion of the Shares on the OTC Bulletin Board; and (9) the
Underwriter's out-of-pocket expenses, including without
limitation, road show expenses and legal fees of counsel to Xxxxx
& Co. (such out-of- pocket expenses and legal fees payable by the Company
shall not exceed $50,000). Upon a successful completion of the
offering, if the Underwriter purchases the Firm Shares and all of
the Optional Shares, the Underwriter will credit the out-of-pocket
and legal fee reimbursement described in Section 6(m)(9) against
the underwriting discount. Upon a successful completion of the
offering, if the Underwriter purchases the Firm Shares, but less
than all of the Optional Shares, the Underwriter will credit
$25,000 of the out-of-
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pocket and legal fee reimbursement described in Section 6(m)(9)
against the underwriting discount.
(n) Not, without the prior written consent of Xxxxx & Co.,
sell, contract to sell or grant any option for the sale of or
otherwise dispose of, directly or indirectly, or register with the
Commission, any shares of Common Stock of the Company (or any
securities convertible into or exercisable for such shares of
Common Stock) within 180 days after the date of the Prospectus,
except as provided in this Agreement and except for grants and
exercises of Stock Options under the Stock Option Plans as
described in the Prospectus.
(o) For not less than 3 fiscal years after the Effective
Date, maintain the Exchange Act registration of the Common Stock,
unless the Company's shareholders direct the Company to reregister
the Common Stock.
(p) Use its best efforts to cause itself and the Bank to
commence their businesses as described in the Prospectus not later
than March 31, 1997.
(q) Not, for one year after the Effective Date, issue any
stock options to purchase Common Stock under either of the Stock
Option Plans, or any other stock option plan of the Company, that
have an exercise price of less than $10 per share.
7. INDEMNIFICATION.
(a) The Company agrees to indemnify and hold harmless the
Underwriter and each person, if any, who controls the Underwriter
within the meaning of Section 15 of the Securities Act or Section
20 of the Exchange Act against any and all losses, claims, damages
and liabilities, joint or several (including any reasonable
investigation, legal and other expenses incurred in connection
with, and any amount paid in settlement of, any action, suit or
proceeding or any claim asserted), to which they may become
subject under the Securities Act, the Exchange Act or other
Federal or state statutory law or regulation, at common law or
otherwise, insofar as such losses, claims, damages or liabilities
arise out of or are based upon any untrue statement or alleged
untrue statement of a material fact contained in any preliminary
prospectus, the Registration Statement or the Prospectus or any
amendment thereof or supplement thereto, or arise out of or are
based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make
the statements therein not misleading; provided, however, that
such indemnity shall not inure to the benefit of the Underwriter
(or any person controlling the Underwriter) on account of any
losses, claims, damages or liabilities arising from
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the sale of the Shares in the public offering to any person by the
Underwriter if such untrue statement or omission or alleged untrue
statement or omission was made in such preliminary prospectus, the
Registration Statement or the Prospectus, or such amendment or
supplement, in reliance upon and in conformity with information furnished
in writing to the Company by or on behalf of the Underwriter specifically
for use therein. The Company shall not be liable hereunder to the
Underwriter (or any controlling person thereof) to the extent that any
loss, claim, damage or other liability incurred by the Underwriter arises
from the Underwriter's fraudulent act or omission.
(b) The Underwriter agrees to indemnify and hold harmless the
Company, each person, if any, who controls the Company within the
meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act, each director of the Company and each officer of the
Company who signs the Registration Statement, to the same extent
as the foregoing indemnity from the Company to the Underwriter,
but only insofar as such losses, claims, damages or liabilities
arise out of or are based upon any untrue statement or omission or
alleged untrue statement or omission which was made in any
preliminary prospectus, the Registration Statement or the
Prospectus, or any amendment thereof or supplement thereto, in
reliance upon and in conformity with information furnished in
writing to the Company by the Underwriter specifically for use
therein; provided, however, that the obligation of the Underwriter
to indemnify the Company (including any controlling person,
director or officer thereof) hereunder shall be limited to the
total price at which the Shares purchased by the Underwriter
hereunder were offered to the public. The Underwriter shall not
be liable hereunder to the Company (including any controlling
person, director or officer thereof) to the extent that any loss,
claim, damage or other liability incurred by the Company arises
from a fraudulent act or omission by the Company.
(c) Any party that proposes to assert the right to be
indemnified under this Section will, promptly after receipt of notice
of commencement of any action, suit or proceeding against such party in
respect of which a claim is to be made against an indemnifying party or
parties under this Section, notify each such indemnifying party of the
commencement of such action, suit or proceeding, enclosing a copy of all
papers served, but the omission so to notify such indemnifying party of
any such action, suit or proceeding shall not relieve it from any
liability that it may have to any indemnified party otherwise than under
this Section. In case any such action, suit or proceeding shall be
brought against any indemnified party and it shall notify the
indemnifying party of the commencement thereof, the indemnifying party
shall be entitled to participate in, and, to the extent that it shall
wish, jointly with any other indemnifying party similarly
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notified, to assume the defense thereof, with counsel reasonably
satisfactory to such indemnified party, and after notice from the
indemnifying party to such indemnified party of its election so to assume
the defense thereof and the approval by the indemnified party of such
counsel, the indemnifying party shall not be liable to such indemnified
party for any legal or other expenses, except as provided below and
except for the reasonable costs of investigation subsequently incurred by
such indemnified party in connection with the defense thereof. The
indemnified party shall have the right to employ its counsel in any such
action, but the fees and expenses of such counsel shall be at the expense
of such indemnified party unless (1) the employment of counsel by such
indemnified party has been authorized in writing by the indemnifying
parties, (2) the indemnified party shall have reasonably concluded that,
because of the existence of different or additional defenses available to
the indemnified party or of other reasons, there may be a conflict of
interest between the indemnifying parties and the indemnified party in
the conduct of the defense of such action (in which case the indemnifying
parties shall not have the right to direct the defense of such action on
behalf of the indemnified party) or that, under the circumstances, it is
otherwise appropriate, or (3) the indemnifying parties shall not have
employed counsel to assume the defense of such action within a reasonable
time after notice of the commencement thereof, in each of which cases the
fees and expenses of counsel shall be at the expense of the indemnifying
parties. An indemnifying party shall not be liable for any settlement of
any action, suit, proceeding or claims effected without its written
consent.
8. CONTRIBUTION. In order to provide for just and equitable
contribution in circumstances in which the indemnification provided for in
Section 7(a) or 7(b) is due in accordance with its terms but for any reason is
held to be unavailable, the Company and the Underwriter shall contribute to the
aggregate losses, claims, damages and liabilities (including any investigation,
legal and other expenses reasonably incurred in connection with, and any amount
paid in settlement of, any action, suit or proceeding or any claims asserted,
but after deducting any contribution received from other persons), to which the
Company and the Underwriter may be subject, in such proportion so that the
Underwriter is responsible for that portion represented by the percentage that
the underwriting discount appearing on the front cover page of the Prospectus
bears to the public offering price appearing thereon and the Company is
responsible for the balance; provided, however, that (a) in no case shall the
Underwriter be responsible for any amount in excess of the underwriting
discount applicable to the Shares purchased by the Underwriter hereunder and
(b) no person found guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. For
purposes of this Section, each person, if any, who controls the Underwriter
within the meaning of the Securities Act or the Exchange Act shall have the
same rights to contribution as the Underwriter, and each person, if any, who
controls the Company within the meaning of the
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Securities Act or the Exchange Act, each officer of the Company who shall have
signed the Registration Statement and each director of the Company shall have
the same rights to contribution as the Company, subject in each case to clauses
(a) and (b) of this Section. Any party entitled to contribution will, promptly
after receipt of notice of commencement of any action, suit or proceeding
against such party in respect of which a claim for contribution may be made
against another party or parties under this Section, notify such party or
parties from whom contribution may be sought, but the omission so to notify
such party or parties from whom contribution may be sought shall not
relieve the party or parties from whom contribution may be sought from any
other obligation it or they may have hereunder or otherwise than under this
Section. No party shall be liable for contribution with respect to any action,
suit, proceeding or claim settled without its written consent.
In any proceeding relating to the Registration Statement, any
preliminary prospectus, the Prospectus or any supplement thereto or amendment
thereof, each party against whom contribution may be sought under this Section
8 hereby consents to the jurisdiction of any court in Michigan, agrees that
process issuing from such court may be served upon him or it by any other
contributing party and consents to the service of such process and agrees that
any other contributing party may join him or it as an additional defendant in
any such proceeding in which such other contributing party is a party.
9. TERMINATION. This Agreement may be terminated by Xxxxx & Co. by
notifying the Company at any time:
(a) before the earlier of (1) 11:00 a.m., Detroit time, on
the business day following the Effective Date, or (2) the time
when the Shares are first generally offered by the Underwriter to
dealers by letter or telegram;
(b) at or before any Closing Date if, in the judgment of
Xxxxx & Co., payment for and delivery of the Shares is rendered
impracticable or inadvisable because (1) additional material
governmental restrictions, not known to be in force and effect
when this Agreement is signed, shall have been imposed upon
trading in securities generally or minimum or maximum prices shall
have been generally established on the New York Stock Exchange, on
the American Stock Exchange or on the over-the-counter market, or
trading in securities generally shall have been suspended on
either such Exchange or on the over-the-counter market or a
general banking moratorium shall have been established by federal, New
York or Michigan authorities, (2) a war or other calamity shall
have occurred or shall have accelerated to such an extent as to
affect adversely the marketability of the Shares, (3) the Company
or the Bank shall have sustained a material loss by fire, flood,
accident, hurricane, earthquake, theft, sabotage or other calamity
or malicious act, which, whether or not said loss shall have been
insured, will in Xxxxx & Co.'s opinion, make it inadvisable to
proceed with the
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offering of the Shares, (4) the FIB Order, the FDIC Order, or the
Federal Reserve Board Approval shall have been withdrawn or materially
altered, or notice shall have been received to the effect that any of
such approvals will not be received, or, if received, will be subject to
conditions that the Company would not be able to fulfill in a reasonable
time in Xxxxx & Co.'s reasonable opinion, (5) in Xxxxx & Co.'s reasonable
opinion it is not probable that the Company and Bank will be able to
commence business before April 30, 1997, for any reason, or (6) there
shall have been such material change in the condition, business
operations or prospects of the Company or the market for the Shares or
similar securities as in Xxxxx & Co.'s judgment would make it inadvisable
to proceed with the offering of the Shares; or
(c) at or before any Closing Date, if any of the conditions
specified in Section 5 or any other agreements, representations or
warranties of the Company in this Agreement shall not have been
fulfilled when and as required by this Agreement.
If this Agreement is terminated pursuant to any of its provisions, except as
otherwise provided in this Agreement, the Company shall not be under any
liability to the Underwriter (other than for obligations assumed in Section 6
hereof), and the Underwriter shall not be under any liability to the Company;
provided, however, that if this Agreement is terminated by Xxxxx & Co. because
of any failure, refusal or inability on the part of the Company to comply with
the terms or to fulfill any of the conditions of this Agreement, or for any
reasons provided in subparagraphs (b) and (c) above, the Company will reimburse
the Underwriter for all accountable out-of-pocket expenses (including, without
limitation, road show expenses and fees and disbursements of counsel to Xxxxx &
Co.) up to a maximum of $65,000 (including the $15,000 advance described below)
incurred by it in connection with the proposed purchase and sale of the Shares
or in contemplation of performing its obligations hereunder. The Underwriter
acknowledges receipt of a $15,000 advance from the Company. If this Agreement
is terminated for any reason, the Underwriter shall be entitled to retain such
advance as reimbursement for its accountable out-of-pocket expenses; provided,
however, in the event that the accountable out-of-pocket expenses to be
reimbursed under this paragraph are less than $15,000, the Underwriter shall
pay such difference to the Company. If this Agreement is not terminated, the
$15,000 shall be credited at closing against the underwriting discount.
10. REPRESENTATIONS AND AGREEMENTS TO SURVIVE DELIVERY. All
representations, warranties and agreements contained in this Agreement shall be
deemed to be representations, warranties and agreements at the Closing Dates,
and such representations, warranties and agreements of the Company, including,
without limitation, the payment and reimbursement agreements contained in
Section 6 hereof and the indemnity and contribution agreements contained in
Sections 7 and 8 hereof, shall remain operative and in full force and effect
regardless of any investigation made by or on behalf of the Underwriter or any
controlling
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person and shall survive termination of this Agreement and/or delivery of the
Shares to and payment for the Shares by the Underwriter pursuant to this
Agreement. In addition, the covenants contained in Section 6 hereof, the
agreements contained in this Section 10 and in Sections 7, 8 and 9 shall
survive termination of this Agreement and/or delivery of the Shares to and
payment for the Shares by the Underwriter pursuant to this Agreement.
11. MISCELLANEOUS. This Agreement has been and is made for the benefit
of the Underwriter, the Company and their respective successors and assigns,
and, to the extent expressed herein, for the benefit of persons controlling the
Underwriter or the Company, and directors and certain officers of the Company,
and their respective successors and assigns, and no other person, partnership,
association or corporation shall acquire or have any right under or by virtue
of this Agreement. The term "SUCCESSORS AND ASSIGNS" shall not include any
purchaser of Shares from the Underwriter merely because of such purchase.
If any action or proceeding shall be brought by the Underwriter or
the Company in order to enforce any right or remedy under this Agreement, the
Underwriter and the Company hereby consent to, and agree that they will submit
to, the jurisdiction of the courts of the State of Michigan and of any Federal
court sitting in the State of Michigan.
All notices and communications hereunder shall be in writing and
mailed or delivered or by telephone or telegraph, if subsequently confirmed in
writing, to Xxxxx & Co., at Xxx Xxxxxxxx, Xxxxxxx, Xxxxxxxx 00000 (facsimile
No. (000) 000-0000) (with a copy to Xxxxxx X. Xxxxx, Xxxxxx Xxxxxxxx & Xxxx
LLP, 000 Xxx Xxxx Xxxxxxxx, 000 Xxxx Xxxxxx, X.X., Xxxxx Xxxxxx, Xxxxxxxx 00000
(facsimile No. (000) 000-0000)); and to the Company at 00000 Xxxxxxxx Xxxx,
Xxxx, Xxxxxxxx 00000, Attention: Xxxxxxx X. Xxxxxxxx, President (facsimile No.
(000) 000-0000) (with a copy to Xxxx X. Xxxxxxxxxx, Xxxxxx Xxxxxxx PLLC, 000
Xxxxxxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000 (facsimile No. (000) 000-0000).
This Agreement shall be construed in accordance with the laws of the
State of Michigan, without giving effect to principles of conflicts of laws.
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Please confirm that the foregoing correctly sets forth the agreement
between us.
Very truly yours,
MICHIGAN HERITAGE BANCORP, INC.
By:___________________________________
Xxxxxxx Xxxxxxxx
Its: Chairman of the Board
And by:___________________________________
Xxxxxxx X. Xxxxxxxx
Its President
Confirmed by Xxxxx & Co.
XXXXX & CO. L.L.C.
By:__________________________
Xxxx X. Xxxxxxxx
Director, Corporate Finance
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EXHIBIT A
States
Colorado
Michigan
Florida
Illinois
Indiana
New Jersey
New York
Ohio
Maryland (50,000 shares)
Texas (30,000 shares)
Virginia (40,000 shares)
