Exhibit 1.1
1,200,000 SHARES
PN HOLDINGS, INC.
COMMON STOCK
UNDERWRITING AGREEMENT
________________ ___, 1999
XXXXXXX X. XXXXX & CO.
as representative of the several
underwriters (the "Representative")
c/o Xxxxxxx X. Xxxxx & Co.
000 Xxxxxx Xxxxxx Xxxxx, Xxxxx 000
Xx. Xxxxxxxxxx, XX 00000-0000
Dear Sirs:
Subject to the terms and conditions stated herein, (i) Pelican
Financial, Inc., a Delaware corporation (the "Company"), proposes to issue and
sell to the Underwriters named in Schedule I (the "Underwriters") an aggregate
of 1,200,000 shares (the "Firm Shares") of the Company's authorized common
stock, par value $.002 per share. Furthermore, at the election of the
Underwriters and subject to the terms and conditions stated herein, Xxxxxxx X.
Xxxxxxx (the "Selling Shareholder") proposes to sell to the Underwriters an
aggregate of 180,000 additional shares of Common Stock (the "Optional Shares").
The Firm Shares and the Optional Shares that the Underwriters elect to purchase
pursuant to Section 2 hereof are collectively called the "Shares." All shares of
common stock of the Company, including the Shares, are hereinafter referred to
as "Common Stock."
1
1. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
a. The Company represents and warrants to and agrees with each
Underwriter that:
(i) A registration statement on Form S-1 (File No. 333-76841) with
respect to the Shares, including a preliminary form of prospectus, has
been prepared by the Company in conformity with the requirements of
the Securities Act of 1933, as amended (the "Act"), and the applicable
Rules and Regulations (the "Rules and Regulations") of the Securities
and Exchange Commission (the "Commission") under the Act and has been
filed with the Commission, and such amendments to such registration
statement as may have been required prior to the date hereof have been
filed with the Commission, and such amendments have been similarly
prepared, including any copy thereof filed with the Commission
pursuant to its Electronic Data Gathering, Analysis and Retrieval
System ("XXXXX"). Copies of such registration statement and amendment
or amendments and of each related prospectus have been delivered to
you, including copies of any filings pursuant to XXXXX. Such
registration statement, including the prospectus, Part II, and all
financial schedules and exhibits and all other documents filed as a
part thereof or incorporated by reference and all information deemed
to be a part thereof as of such time of effectiveness, including if
applicable any subsequent prospectus filed pursuant to paragraph (b)
of Rule 430(A) of the Rules and Regulations, is herein referred to as
the "Registration Statement," and the prospectus included as part of
the Registration Statement on file with the Commission that discloses,
if applicable, all the information that was omitted from the
prospectus on the effective date pursuant to Rule 430A of the Rules
and Regulations or any subsequent Prospectus filed with the Commission
pursuant to Rule 424(b) of the Rules and Regulations by the Company
with your consent after the effective date of the Registration
Statement, is herein referred to as the "Final Prospectus." In the
event a prospectus is not filed pursuant to Rule 430A and Rule 424(b)
then, the prospectus included as part of the Registration Statement on
the date when the Registration Statement became effective is deemed to
be the Final Prospectus. Any prospectus included in the Registration
Statement of the Company and in any amendments thereto prior to the
effective date of the Registration Statement is referred to herein as
a "Preliminary Prospectus."
(ii) The Commission has not issued any order preventing or suspending
the use of any Preliminary Prospectus, and each Preliminary
Prospectus, at the time of filing thereof, conformed in all material
respects to the requirements of the Act and the Rules and Regulations;
when the Registration Statement becomes effective and at all times
subsequent thereto up to and at the Closing Date (hereinafter defined)
and any later date on which Option Shares are to be purchased, (i) the
Registration Statement and any post-effective amendment thereto, the
Final Prospectus and amendments or supplements thereto, in all
material respects conformed and will conform to the requirements of
the Act and the Rules and Regulations, and (ii) neither the
Registration Statement nor the Final Prospectus, nor any amendment or
supplement thereto, included or will include any untrue statement of a
material fact or omitted or will omit to state any material fact
required to be stated therein or necessary to make the statements
therein in light of the circumstances under which they were made not
misleading; provided, however, that none of the representations and
warranties contained in this subparagraph shall apply to information
contained in or omitted from the Registration Statement, the
Preliminary Prospectus or the Final Prospectus or any such amendment
or supplement in reliance upon, and in conformity with, written
information furnished to the Company by any Underwriter, directly or
through you, specifically for inclusion therein.
(iii) Each of the Company's subsidiaries and the percentage of
outstanding shares of capital stock of each of its subsidiaries owned
by the Company are listed on Schedule III hereto. Each of the Company
and its subsidiaries is incorporated and existing as a corporation in
good standing under the laws of its jurisdiction of organization, with
the corporate power and corporate authority to own, lease and operate
its properties and conduct its business as described in the Final
Prospectus and each is duly qualified to do business as a foreign
corporation in good standing in all other jurisdictions, if any, where
the ownership or leasing of properties or the conduct of its business
requires such qualification; each of the Company and its subsidiaries
now hold, and at the Closing Date and any later date on which Optional
Shares are to be purchased will hold, all licenses, certificates,
permits and approvals from state, Federal and other regulatory
authorities that are required for the Company to lawfully own, lease
and operate its properties and conduct its business as described in
the Final Prospectus or that are material to the Company's business
operations, properties, assets, condition (financial or otherwise) or
prospects, and all such licenses, certificates, permits and approvals
are valid and in full force and effect; each of the Company and its
subsidiaries are conducting its business, including but not limited to
lending activities, in compliance with all material laws, rules and
regulations of each jurisdiction in which it conducts its business;
neither the Company nor its subsidiaries are in violation of its
charter or By-laws or, is in default in the performance or observance
of any material obligation, agreement, covenant or condition contained
in any bond,
debenture, note or other evidence of indebtedness or in any contract,
indenture, mortgage, loan agreement, joint venture or other agreement
or instrument to which the Company or any of its subsidiaries are a
party or by which they or any of their properties are bound or in
violation of any law, order, rule, regulation, writ, injunction or
decree of any government, governmental instrumentality or court,
domestic or foreign, which defaults or violations, singly or in the
aggregate, would have a material adverse effect on the business,
properties, assets, rights, operations, condition (financial or
otherwise) or prospects of the Company and its subsidiaries taken as a
whole. The Company does not own or control, directly or indirectly any
corporation, association or other entity other than its subsidiaries.
(iv) This Agreement has been authorized, executed and delivered by an
authorized representative of the Company and is a valid and binding
agreement on the part of the Company, enforceable in accordance with
its terms; the performance of this Agreement and the consummation of
the transactions herein contemplated will not result in a breach or
violation of any of the terms and provisions of, or constitute a
default under, (i) any indenture, mortgage, deed of trust, loan
agreement, bond, debenture, note agreement or other evidence of
indebtedness, or any lease, contract or other agreement or instrument
to which the Company is a party or by which its properties or its
subsidiaries' properties are bound, (ii) the Company's charter or
By-laws, or (iii) any applicable statute, rule or regulation, or any
order of any court or governmental agency or body having jurisdiction
over the Company or its subsidiaries or over their properties, which
defaults or violations, singly or in the aggregate, would have a
material adverse effect on the business, properties, assets, rights,
operations, condition (financial or otherwise) or prospects of the
Company and its subsidiaries taken as a whole; and no consent,
approval, authorization or order of any court or governmental agency
or body is required for the consummation by the Company of the
transactions on its part herein contemplated, except such as may have
been obtained by the Closing Date (as hereinafter defined) or such as
may be required under the Act or under state or other securities or
Blue Sky laws.
(v) Other than as disclosed in the Final Prospectus, there is no
pending or, to the Company's knowledge, threatened action, suit, claim
or proceeding against Company or its subsidiaries or any of their
officers or any of their properties, assets or rights before any court
or governmental agency or body or otherwise which might result in any
material adverse change in the business, properties, assets, rights
operations, condition (financial or otherwise) or prospects of the
Company and its subsidiaries taken as a whole, or prevent consummation
of the transactions contemplated hereby.
(vi) There are no contracts or documents of the Company or its
subsidiaries that would be required to be described in the Final
Prospectus or to be filed as exhibits to the Registration Statement by
the Act or by the
Rules and Regulations that have not been accurately described in all
material respects in the Final Prospectus or filed as exhibits to the
Registration Statement.
(vii) The authorized, issued and outstanding capital stock of the
Company is as set forth in the Final Prospectus under the caption
"Capitalization" as of the date stated therein; all outstanding shares
of capital stock of the Company have been duly authorized and validly
issued and are fully paid and nonassessable and were not issued in
violation of any preemptive right or other rights to purchase such
shares, and the capital stock of the Company conforms in all material
respects to the statements in relation thereto contained in the Final
Prospectus (and such statements correctly state the substance of the
instruments defining the capitalization of the Company); and the Firm
Shares have been duly authorized for issuance and sale to the
Underwriters pursuant to this Agreement and, when issued and delivered
by the Company against payment therefor in accordance with the terms
of this Agreement, will be duly and validly issued and fully paid and
nonassessable and no person has preemptive or other rights to purchase
any of the Shares. No further approval or authorization of any
stockholder, the Board of Directors or others is required for the
issuance and sale of the Firm Shares to the several Underwriters,
except as may be required under the Act or under state or other
securities or Blue Sky laws.
(viii) Xxxxx Xxxxxx & Company LLP, which has examined the consolidated
financial statements of the Company as of December 31, 1998, and
Deloitte & Touche LLP, which has examined the consolidated financial
statement of the Company for the eleven months ended December 31,
1997, and the year ended January 31, 1997, together with the related
schedules and notes (the "Audited Financial Statements") and whose
reports appear as part of the Final Prospectus, are independent
accountants within the meaning of the Act and the Rules and
Regulations.
(ix) The Audited Financial Statements and the three-month unaudited
financial information forming part of the Registration Statement or
Final Prospectus (collectively, the "Financial Statements"), fairly
present the consolidated financial position, results of operations and
cash flow of the Company at the respective dates and for the
respective periods to which they apply; and the Audited Financial
Statements and the unaudited financial information filed with the
Commission as part of the Registration Statement and included as part
of the Final Prospectus have been prepared in accordance with
generally accepted accounting principles consistently applied
throughout the periods shown, except as may otherwise be stated
therein.
(x) Subsequent to the latest date of the Financial Statements there
has not been (i) any material adverse change in the business,
properties, assets, rights, operations, condition (financial or
otherwise) or prospects of the Company and its subsidiaries taken as a
whole, (ii) any transaction that is material to the Company and its
subsidiaries taken as a whole, except transactions in the ordinary
course of business, (iii) any obligation that is material to the
Company and its subsidiaries taken as a whole, direct or contingent,
incurred by the Company or its subsidiaries, except obligations
incurred in the ordinary course of business, (iv) any change that is
material to the Company and its subsidiaries taken as a whole in the
capital stock or outstanding indebtedness of the Company, or (v) any
dividend or distribution of any kind declared, paid or made on the
capital stock of the Company, except for the two-for-one stock split
declared March 30, 1999, effective March 31, 1999 and paid
____________, 1999.
(xi) The Company or its subsidiaries have good and marketable title to
all properties and assets described in the Final Prospectus as owned
by it, free and clear of any liens, charges, encumbrances or
restrictions other than as set forth in the Final Prospectus, such as
are not material to the business, properties, assets, rights,
operations, condition (financial or otherwise) or prospects of the
Company and its subsidiaries taken as a whole; the agreements to which
the Company is a party described in the Final Prospectus are valid and
enforceable in accordance with their terms by the Company, except as
enforcement may be limited by applicable bankruptcy, insolvency and
other similar laws affecting creditors' rights and rules of law
governing specific performance, injunctive relief and other equitable
remedies and, to its knowledge, the other contracting party or parties
thereto are not in breach or default under any of such agreements,
except for such breaches or defaults which would not singly or in the
aggregate, have a material adverse effect on the business, properties,
assets, rights, operations, condition (financial or otherwise) or
prospects of the Company and its subsidiaries taken as a whole; and
the Company has valid and enforceable leases for the properties
described in the Final Prospectus as leased by it, except as
enforcement may be limited by applicable bankruptcy, insolvency and
other similar laws affecting creditors' rights and rules of law
governing specific performance, injunctive relief and other equitable
remedies.
(xii) The Company has filed all necessary federal, state, local and
foreign tax returns, as applicable and has paid all taxes as due
unless such taxes are being contested in good faith and, to the
Company's best knowledge, there is no tax deficiency that has been or
might be asserted against the Company that would materially and
adversely affect its business, properties, assets, rights, operations,
condition (financial or otherwise) or prospects; all tax liabilities
are adequately provided for on the books of the Company.
(xiii) The Company maintains insurance of the types and in the amounts
required by law and reasonably necessary to operate its business
including, but not limited to, insurance covering real and personal
property owned or leased by the Company against theft, damage,
destruction, acts of vandalism, general and product liability and all
other risks customarily insured against, all of which insurance is in
full force and effect.
(xiv) The Company and each of the Subsidiaries has generally enjoyed a
satisfactory employer-employee relationship with its employees and is
in material compliance with all federal, state, local, and foreign
laws and regulations respecting employment and employment practices,
terms and conditions of employment and wages and hours. To the
Company's knowledge there are no pending investigations involving the
Company or any of the Subsidiaries by the U.S. Department of Labor, or
any other governmental agency responsible for the enforcement of such
federal, state, local, or foreign laws and regulations. There is no
unfair labor practice charge or complaint against the Company or any
of the Subsidiaries pending before the National Labor Relations Board
or any strike, picketing boycott, dispute, slowdown or stoppage
pending or to the Company's knowledge threatened against or involving
the Company or any of the Subsidiaries, and none has ever occurred. No
representation question exists respecting the employees of the Company
or any of the Subsidiaries, and no collective bargaining agreement or
modification thereof is currently being negotiated by the Company or
any of the Subsidiaries. No grievance or arbitration proceedings is
pending under any expired or existing collective bargaining agreements
of the Company or any of the Subsidiaries. No labor dispute with the
employees of the Company or any of the Subsidiaries exists, or is
imminent.
(xv) The Company is familiar with the Investment Company Act of 1940,
as amended (the "1940 Act"), and the rules and regulations thereunder,
and has in the past conducted, and intends in the future to continue
to conduct, its affairs in such a manner as to ensure that it will not
become an "investment company" within the meaning of the 1940 Act and
such rules and regulations.
(xvi) Except as disclosed in the Final Prospectus, neither the Company
nor any of the Subsidiaries maintains, sponsors or contributes to any
program or arrangement that is an "employee pension benefit plan," an
"employee welfare benefit plan," or a "multiemployer plan" as such
terms are defined in Sections 3(2), 3(1) and 3(37), respectively, of
the Employee Retirement Income Security Act of 1974, as amended
("ERISA") ("ERISA Plans"). Neither the Company nor any of the
subsidiaries maintains or contributes, now or at any time previously,
to a defined benefit plan, as defined in Section 3(35) of ERISA. No
ERISA Plan (or any trust created thereunder) has engaged in a
"prohibited transaction" within the meaning of Section 406 of
ERISA of Section 4975 of the Code, which could subject the Company to
any tax penalty on prohibited transactions and which has not
adequately been corrected. Each ERISA Plan is in compliance with all
reporting, disclosure and other requirements of the Code and ERISA as
they relate to any such ERISA Plan. The Company has never completely
or partially withdrawn from a "multiemployer plan."
(xvii) Neither the Company nor any of its employees, directors,
stockholders, partners, or affiliates (within the meaning of the Rules
and Regulations) of any of the foregoing has taken or will take,
directly ro indirectly, any action designed to or which has
constituted or which might be expected to cause or result in, under
the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
or otherwise, stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of the Shares
or otherwise.
(xviii) Except as disclosed in the Final Prospectus, none of the
patents, patent applications, trademarks, service marks, service
names, trade names and copyrights, and none of the licenses and rights
to the foregoing presently owned or held by the Company or any of the
Subsidiaries are in dispute, including without limitation, rights to
the names "Washtenaw Mortgage Company" and "Pelican National Bank" or,
to the Company's knowledge, are in any conflict with the right of any
other person or entity. Except as disclosed in the Prospectus, the
Company and each of the Subsidiaries (i) owns or has the right to use,
free and clear of all liens, charges, claims, encumbrances, pledges,
security interests, or to the Company's knowledge, defects or other
restrictions or equities of any kind whatsoever, all patents, patent
applications, trademarks, service marks, service names, trade names
and copyrights, technology and licenses and rights with respect to the
foregoing, used in the conduct of its business as now conducted or
proposed with respect to the foregoing, without, to the Company's
knowledge, infringing upon or otherwise acting adversely to the right
or claimed right of any person, corporation or other entity under or
with respect to any of the foregoing and (ii) is not obligated or
under any liability whatsoever to make any payment by way or
royalties, fees or otherwise to any owner or licensee of, or other
claimant to, any patent, patent application, trademark, service xxxx,
service names, trade name, copyright, know-how, technology of its
business or otherwise. There is no action, suit, proceeding, inquiry,
arbitration, investigation, litigation or governmental or other
proceeding, domestic or foreign, pending or to the Company's knowledge
threatened against the Company or any of the Subsidiaries which
challenges the exclusive rights of the Company or any of the
Subsidiaries with respect to any trademarks, trade names, service
marks, service names, copyrights, patents, patent applications or
licenses or rights to the foregoing used in the conduct of its
business, or which challenge the right of the Company or any of the
Subsidiaries to use any technology presently used or contemplated to
be used in the conduct of its business.
(xix) The Company and each of the Subsidiaries owns and has the right
to use all trade secrets, know-how (including all other unpatented
and/or unpatentable proprietary or confidential information, systems
or procedures), inventions, technology, designs, processes, works of
authorship, computer programs and technical data and information
(collectively herein "intellectual property") that are material to the
development, operation and sale of all products and services sold or
proposed to be sold by the Company or any of the Subsidiaries, without
violating any right, lien, or claim of others, including without
limitation, former employers of its employees; provided, however, that
the possibility exists that other persons or entities, completely
independently of the Company, or its employees or agents, could have
developed trade secrets or items of technical information similar or
identical to those of the Company. Neither the Company nor any of the
Subsidiaries is aware of any such development of similar or identical
trade secrets or technical information by others.
(xx) Except as disclosed in the Final Prospectus, there are no
outstanding (i) securities or obligations of the Company convertible
into or exchangeable for any capital stock of the Company, (ii)
warrants, rights or options to subscribe for or purchase from the
Company any such capital stock or any such convertible or exchangeable
securities or obligations, or (iii) obligations of the Company to
issue any shares of capital stock, any such convertible or
exchangeable securities or obligations, or any such warrants, rights
or options.
(xxi) Except and to the extent described in the Prospectus, no holders
of any securities of the Company or of any options, warrants or other
convertible or exchangeable securities of the Company have the right
to include any securities issued by the Company in the Registration
Statement or any registration statement to be filed by the Company or
to require the Company to file a registration statement under the Act
and no person or entity holds any anti-dilution rights with respect to
any securities of the Company.
(xxii) All offers and sales of the Company's capital stock prior to
the date hereof were at all relevant times duly registered under the
Act or exempt from the registration requirements of the Act and were
duly registered or the subject of an available exemption from the
registration requirements of the applicable state securities or blue
sky laws, and the Company has taken all actions reasonably necessary
for it to assure that such exemptions from registration would continue
to be operative during all applicable periods of time required by law.
(xxiii) Neither the Company nor any of its Subsidiaries, nor, to the
knowledge of the Company or any of its Subsidiaries, any director,
officer, agent, employee, Affiliate or other person associated with or
acting on
behalf of the Company or any of its Subsidiaries has, directly or
indirectly, used any corporate funds for unlawful contributions,
gifts, entertainment or other unlawful expenses relating to political
activity, or established or maintained any unlawful or unrecorded
funds in violation of Section 30A of the Exchange Act; made any
unlawful payment to foreign or domestic government officials or
employees or to foreign or domestic political parties or campaigns
from corporate funds; violated any provision of the Foreign Corrupt
Practices Act of 1977, as amended; or made any bribe, rebate, payoff,
influence payment, kickback or other payment unlawful under the laws
of the United States or any foreign jurisdiction.
(xxvi) Neither the Company nor any of its subsidiaries is in violation
of any federal or state law or regulation relating to their respective
lending activities, including, without limitation, rules and
regulations of the Federal Housing Administration or the Office of the
Comptroller of the Currency and applicable banking laws, rules and
regulations, except for any such violation of law or regulation which
would not have a material adverse effect on the business, prospects,
properties, operations, condition (financial or other) or results of
operations of the Company and its subsidiaries taken as a whole or
which is described in or contemplated by the Registration Statement
and Final Prospectus.
(xxvii) The minute books of the Company and each of the Subsidiaries
have been made available to the Underwriters and contain a complete
summary of all meetings and actions of the directors, stockholders,
audit committee, compensation committee and any other committee of the
Board of Directors of the Company and each of the Subsidiaries,
respectively, since January 1, 1994 or such later date on which the
Company or any Subsidiary was formed, and reflects all transactions
referred to in such minutes accurately in all material respects.
(xxviii) The Company and each of its Subsidiaries makes and keeps
accurate books and records reflecting its assets and maintains
internal accounting controls that provide reasonable assurance that
(i) transactions are executed in accordance with management's
authorization, (ii) transactions are recorded as necessary to permit
preparation of the Company's financial statements in accordance with
generally accepted accounting principles and to maintain
accountability for the assets of the Company, (iii) access to the
assets of the Company is permitted only in accordance with
management's authorization, and (iv) the recorded accountability for
assets of the Company is compared with existing assets at reasonable
intervals and appropriate action is taken with respect to any
differences.
(xxix) Except for the shares of capital stock of each of the Federal
National Mortgage Association and the Federal Home Loan Mortgage
Corporation owned by the Company and its Subsidiaries, neither the
Company nor its Subsidiaries own any shares of stock or any other
equity securities of any
corporation nor has any equity interest in any firm, partnership,
association or other entity, except as described in or contemplated by
the Final Prospectus.
(xxx) The Company has filed a registration statement pursuant to
Section 12(g) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), to register the Common Stock.
(xxxi) The Shares have been duly authorized for listing on the NASDAQ
NMS, subject to official notice of issuance.
(xxxii) None of the Company, any Subsidiary or, to the knowledge of
the Company, any officer or director purporting to act exclusively
on behalf of the Company or any Subsidiary has at any time (i) made
any contributions to any candidate for political office, or failed
to disclose fully any such contributions, in violation of law; (ii)
made any payment to any federal, state, local or foreign
governmental officer or official, or other person charged with
similar public or quasi-public duties, other than payments required
or allowed by applicable law; (iii) made any payment in violation
of law outside the ordinary course of business to any purchasing or
selling agent or person charged with similar duties of any entity
to which the Company or any Subsidiary sells or from which the
Company or any Subsidiary buys products for the purpose of
influencing such agent or person to buy products from or sell
products to the Company or any Subsidiary; or (iv) engaged in any
material transaction, maintained any material bank account or used
any material corporate funds except for transactions, bank accounts
and funds which have been and are reflected in the normally
maintained books and records of the Company and its Subsidiaries,
taken as a whole, and except for any of the foregoing, the
occurrence of which would not be reasonably likely to result in a
material adverse effect or the Company as a whole.
(xxxiii) The Company and its Subsidiaries are in compliance with
Florida blue sky law relating to disclosure of issuers doing business
with Cuba. Neither the Company nor any of its Subsidiaries is
presently doing business with the government of Cuba or with any
person or affiliate located in Cuba and will notify the Florida
Department of Banking and Finance, Division of Securities and Investor
Protection, if the Company or any such Subsidiary commences doing
business with the government of Cuba or any person or affiliate
located in Cuba.
(xxxiv) The Company and its Subsidiaries are not in default in any of
the restrictive covenants set forth in the Warehouse Credit Facility
between Washtenaw Mortgage Company and National City Bank of Kentucky
(the "Credit Facility") including, among others, that the Company and
its Subsidiaries maintain certain minimum net worth levels and a
minimum debt of net worth ratio as defined in the Credit Facility.
(xxxv) The description of the secondary market activities effected by
the Company and its Subsidiaries, as contained in the Registration
Statement and the Final Prospectus, is true and complete in all
material respects and to the Company's best knowledge, no event or
series of events has occurred that would result in any of the
securities issued in connection with any of such secondary market
activities being downgraded or placed on a watch list with negative
implications by any rating agency or similar organization, or that
would impair the Company's or its Subsidiaries' ability to consummate
future secondary market activities upon economic terms consistent with
past secondary market activities or otherwise cause the Company and
its Subsidiaries to suffer any material adverse change with respect to
any past or future secondary market activities (other than any such
event or series of events described in the Final Prospectus).
(xxxvi) The description of whole loan sales effected by the Company
and its Subsidiaries, as contained in the Registration Statement and
the Final Prospectus, is true and complete in all material respects
and to the Company's knowledge no event or series of events has
occurred that would result in any of the securities issued in
securitizations using such loans being downgraded or placed on a watch
list with negative implications by any rating agency or similar
organization, or that would impair the Company's or its Subsidiaries'
ability to consummate future whole loan sales or to securitize such
loans itself upon economic terms consistent with past whole loan sales
and securitizations of such loans or otherwise cause the Company and
its Subsidiaries to suffer any material adverse change with respect to
any past or future whole loan sale or securitization (other than any
such event or series of events described in the Final Prospectus).
(xxxvii) Except as disclosed in the Final Prospectus, there are no
costs or liabilities associated with Environmental Laws (including,
without limitation, any capital or operating expenditures required for
clean-up, closure of properties or compliance with Environmental Laws
or any permit, license or approval, any related constraints on
operating activities and any potential liabilities to third parties)
which would, singly or in the aggregate, have a material adverse
effect on the Company and its Subsidiaries, taken as a whole.
(xxxviii) Neither the Company nor any affiliate of the Company has
incurred any liability for a fee, commission or other compensation on
account of the employment or engagement of a broker or finder in
connection with the transactions contemplated by this Agreement not
disclosed in the Registration Statement and Final Prospectus, other
than as contemplated herein.
(xxxix) There are no business relationships or related-party
transactions involving the Company or any Subsidiary or any other
person required to be described in the Final Prospectus which have not
been described as required.
b. The Selling Shareholder represents and warrants to, and agrees with,
each Underwriter that:
(i) Such Selling Shareholder has provided the Underwriters with a
written agreement (a "Lock-up Letter") that for a period of 180 days
from the date of the Final Prospectus, other than the Optional Shares,
he will not, without the prior written consent of Xxxxxxx X. Xxxxx &
Co., on behalf of the Underwriters, offer, pledge, sell, contract to
sell, grant any option for the sale of, or otherwise dispose of (or
announce any offer, pledge, sale, grant of an option to purchase or
other disposition), directly or indirectly, any shares of Common Stock
or securities convertible into, or exercisable or exchangeable for,
shares of Common Stock.
(ii) Such Selling Shareholder has full right, power and authority to
enter into the Lock-up Letter and this Agreement, the Power of
Attorney and the Custody Agreement in the forms heretofore furnished
to you (the "Power of Attorney and the Custody Agreement") and on the
date hereof such Selling Shareholder has and, at the time of delivery
of the Optional Shares to the Underwriters hereunder, such Selling
Shareholder will have full right, power and authority to sell and
deliver the Optional Shares to be sold by such Selling Shareholder to
the Underwriters, and at the date hereof such Selling Shareholder is,
and at the time of delivery of the Optional Shares to the Underwriters
such Selling Shareholder will be, the lawful owner of and has and will
have marketable title to the Optional Shares to be sold by such
Selling Shareholder free and clear of any claims, liens, encumbrances
or security interests. Further, delivery of the Optional Shares to be
sold by such Selling Shareholder pursuant to this Agreement will pass
title to such shares free and clear of any security interests, claims,
liens, equities and other encumbrances.
(iii) The performance of the Lock-up Letter, this Agreement, the Power
of Attorney and the Custody Agreement, and the consummation of the
transactions herein and therein contemplated, will not conflict with
or result in a breach of, or default under, any agreement, indenture
or other instrument to which such Selling Shareholder is a party or by
which such Selling Shareholder is bound, or any law, rule,
administrative regulation or court decree. The Lock-up Letter, this
Agreement, the Power of Attorney and the Custody Agreement have been
validly authorized, executed and delivered by such Selling Shareholder
and each constitutes a legal, valid and binding obligation of such
Selling Shareholder enforceable against such Selling Shareholder in
accordance with its terms.
(iv) No consent, approval, authorization, order or declaration of or
from, or registration, qualification or filing with, any court or
governmental agency or body is required for the sale of the Shares to
be sold by such Selling Shareholder or the consummation of the
transactions contemplated by the
Lock-up Letter, this Agreement, the Power of Attorney or the Custody
Agreement, except the registration of Shares under the Act (which, if
the Registration Statement is not effective as of the time of
execution hereof, shall be obtained as provided in this Agreement) and
such as may be required under state securities or blue sky laws in
connection with the offer, sale and distribution of such Shares by the
Underwriters.
(v) When the Registration Statement becomes effective and at all times
subsequent thereto, the Registration Statement, any post-effective
amendment thereto and the Final Prospectus as amended and
supplemented, did not and will not contain any untrue statement of a
material fact regarding such Selling Shareholder or omit to state a
material fact regarding such Selling Shareholder required to be stated
therein or necessary in order to make the statements therein not
misleading, and such Selling Shareholder is, and shall be, unaware of
any untrue statement of a material fact in such documents or the
omission from such documents of any material fact required to be
stated therein or necessary to make the statements therein not
misleading.
(vi) Certificates in negotiable form representing all of the Optional
Shares to be sold by such Selling Shareholder have been placed in
custody under the Power of Attorney and the Custody Agreement duly
executed and delivered by such Selling Shareholder to and appointing,
____________________________, as custodian (the "Custodian"), with
authority to deliver and receive payment for the Optional Shares to be
sold by such Selling Shareholder hereunder, and appointing
____________________ and _______________________, or either of them,
as the Selling Shareholder's attorney-in-fact (the "Attorney-in-Fact")
with authority to execute and delivery this Agreement and any other
documents necessary or desirable in connection with the transactions
contemplated hereby on behalf of such Selling Shareholder, and
otherwise to act on behalf of such Selling Shareholder and take all
actions that may be necessary or desirable in connection with the
transactions contemplated by this Agreement, the Power of Attorney and
the Custody Agreement.
(vii) The Optional Shares represented by the certificates held in
custody for such Selling Shareholder under the Power of Attorney and
the Custody Agreement are subject to the interests of the Underwriters
hereunder, and the arrangements made by such Selling Shareholder for
such custody, as well as the appointment by such Selling Shareholder
of the Attorney-in-Fact, are, to that extent, irrevocable. The Selling
Shareholder specifically agrees that the obligations of the Selling
Shareholder hereunder shall not be terminated by operation of law,
whether by the death or incapacity of such Selling Shareholder or by
the occurrence of any other event. If the Selling Shareholder should
die or become incapacitated, or if any other similar event should
occur before the delivery of the Optional Shares hereunder,
certificates representing such Shares shall be delivered by or on
behalf of such Selling Shareholder in accordance with the terms and
conditions of this Agreement and of the Power of Attorney and the
Custody Agreement, and the actions taken by the Attorney-in-Fact
pursuant to the Power of Attorney and the Custody Agreement shall be
as valid as if such death, incapacity or other event had not occurred,
whether or not the Custodian or the Attorney-in-Fact shall have
received notice of such death, incapacity or other event.
(viii) In order to document the Underwriters' compliance with the
reporting withholding provisions of the Internal Revenue Code of 1986,
as amended, with respect to the transactions herein contemplated, the
Selling Stockholder agrees to deliver to you prior to or on the
Optional Closing Date (as hereinafter defined), a properly completed
and executed United States Treasury Department Form W-8 or W-9 (or
other applicable form of statement specified by Treasury Department
regulations in lieu thereof).
2. PURCHASE AND SALE OF SHARES. Subject to the terms and conditions herein set
forth, (i) the Company agrees to sell to the Underwriters that number of Firm
Shares set forth opposite the name of the Company in Schedule II annexed hereto,
and (ii) each of the Underwriters agrees, severally and not jointly, to purchase
from the Company, at a purchase price of $_____ per share, the number of Firm
Shares set forth opposite the name of each Underwriter on Schedule I annexed
hereto.
The Selling Shareholder hereby grants to the Underwriters the right to
purchase at their election in whole or in part up to 180,000 Optional Shares at
the purchase price per share set forth in clause (i) in the paragraph above for
the sole purpose of covering over-allotments in the sale of Firm Shares. If the
option granted hereby is exercised in whole or in part, then the respective
number of Optional Shares to be purchased by each of the Underwriters shall be
determined by multiplying the total number of Optional Shares as to which such
election shall have been exercised by the Underwriters by a fraction, the
numerator of which is the maximum number of Optional Shares such Underwriter is
entitled to purchase as set forth opposite the name of such Underwriter in
Schedule I hereto and the denominator of which is the maximum number of Optional
Shares that all Underwriters are entitled to purchase hereunder (with the
resulting number to be adjusted by the Underwriters so as to eliminate
fractional shares). Any such election to purchase
Optional Shares may be exercised by written notice from the Underwriters to the
Selling Shareholder, given within a period of 30 calendar days after the date of
this Agreement and setting forth the aggregate number of Optional Shares to be
purchased and the date on which such Optional Shares are to be delivered, as
determined by the Underwriters but in no event earlier than the First Time of
Delivery or, unless the Underwriters and the Company otherwise agree, to furnish
or cause to be furnished to the Underwriters the certificates, letters and
opinions, and to satisfy all conditions, set forth in Section 6 hereof at the
Subsequent Time of Delivery.
After the Registration Statement becomes effective, the several
Underwriters intend to offer the Shares to the public as set forth in the
Prospectus.
3. DELIVERY OF SHARES; CLOSING. Certificates in definitive form for the
Shares to be purchased by each Underwriter hereunder, and in such denominations
and registered in such names as Xxxxxxx X. Xxxxx & Co. may request upon at least
48 hours prior notice to the Company, shall be delivered by or on behalf of the
Company to the Underwriters for the account of such Underwriter, against payment
by such Underwriter on its behalf as provided herein. Payment shall be made with
respect to the purchase price for the Firm Shares, to the Company, by wire
transfer or official bank check or checks payable to the order of the Company,
in next day available funds against delivery of the certificates for the Firm
Shares. The closing of the sale and purchase of the Shares shall be held at the
offices of Xxxxxxx X. Xxxxx & Co., 000 0xx Xxxxxx Xxxxx, Xxxxx 000, Xx.
Xxxxxxxxxx, Xxxxxxx 00000, (the "Representative's Office"), or at such location
in Tampa, Florida as the Representatives may designate, except that physical
delivery of certificates for the Shares shall be made at the direction of the
Underwriters either at the Representative's Office or at the office of
________________, ___________________ (the "_________ Office"), or shall be made
to The Depository Trust Company ("DTC"), 00 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000, for the account of the Underwriters or for such other accounts as the
Underwriters shall specify to DTC. The time and date of such delivery and
payment shall be, with respect to the Firm Shares, at 10:00 a.m., Eastern time,
on the third full business day after this Agreement is executed or at such other
time and date as the Underwriters and the Company may agree upon in writing ,
and, with respect to the Optional Shares, 10:00 a.m., Eastern time, on the date
specified by the Underwriters in the written notice given by the Underwriters of
the Underwriters' election to purchase all or part of such Optional Shares, or
at such other time and date as the Underwriters, and the Attorney-in-Fact,
pursuant to the Power of Attorney and Custody Agreement with the Selling
Shareholder, on behalf of the Selling Shareholder, may agree upon in writing.
Such time and date for delivery of the Firm Shares is herein called the "First
Time of Delivery," and such time and date for delivery of any Optional Shares,
if not the First Time of Delivery, is herein called a "Subsequent Time of
Delivery," and each such time and date for delivery of any Optional Shares, if
not the First Time of Delivery, is herein called a "Subsequent Time of
Delivery," and each such time and date for delivery is herein called a "Time of
Delivery." The Company will make certificates for the Shares available for
checking and packaging at least 24 hours prior to each Time of Delivery at the
___________ Office or the office of DTC in New York, New York or at such other
location in New York, New York specified by the Underwriters in writing at least
48 hours prior to such Time of Delivery.
4. COVENANTS.
a. The Company covenants and agrees with the several Underwriters that:
(i) The Company will use its best efforts to cause the Registration
Statement and any amendment thereto, if not effective at the time and
date that this Agreement is executed and delivered by the parties
hereto, to become effective. If the Registration Statement has become
or becomes effective pursuant to Rule 430A of the Rules and
Regulations, or the filing of the Final Prospectus is otherwise
required under Rule 424(b) of the Rules and Regulations, the Company
will file the Final Prospectus, properly completed, pursuant to the
applicable paragraph of Rule 424(b) of the Rules and Regulations
within the time period prescribed and will provide evidence
satisfactory to you of such timely filing; the Company will notify
you, promptly after it shall receive notice thereof, of the time when
the Registration Statement or any post-effective amendment to the
Registration Statement has become effective or any amendment or
supplement to the Final Prospectus has been filed.
(ii) The Company will notify you promptly of any request by the
Commission to amend or supplement the Registration Statement or Final
Prospectus or for additional information; promptly upon your request,
the Company will prepare and file with the Commission amendments or
supplements to the Registration Statement or Final Prospectus which,
in the reasonable opinion of, Schifino & Xxxxxxxxx, P.A., counsel for
the several Underwriters, may be necessary or advisable in connection
with the distribution of Shares by the Underwriters; the Company will
fully and completely comply with the provisions of Rule 430A of the
Rules and Regulations with respect to information omitted from the
Registration Statement in reliance upon such Rule; the Company will
promptly prepare and file with the Commission, and promptly notify you
of the filing of, any amendment or supplement to the Registration
Statement or Final Prospectus that may be necessary to correct any
statements or omissions if, at any time a prospectus relating to the
Shares is required to be delivered under the Act, any event shall have
occurred as a result of which the Final Prospectus would include an
untrue statement of a material fact or omit to state any material fact
necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading; in case any
Underwriter is required to deliver a prospectus within the nine-month
period referred to in Section 10(a)(3) of the Act in connection with
the sale of the Shares, the Company will prepare promptly upon request
of such Underwriters, at the expense of the Company, such amendment or
amendments to the Registration Statement and the Final Prospectus as
may be necessary to permit compliance with the requirements of Section
10(a)(3) of the Act, and it will file no amendment or supplement to
the Registration Statement or the Final Prospectus that shall not
previously have been submitted to you a reaonsable time prior to the
proposed filing thereof or to which you shall reasonably object in
writing, subject, however, to
compliance with the Act and the Rules and Regulations thereunder and
the provisions of this Agreement.
(iii) The Company will advise you, promptly after it shall receive
notice or obtain knowledge thereof, of the issuance of any stop order
by the Commission suspending the effectiveness of the Registrations
Statement or of the initiation or threat of any proceeding for that
purpose; and the Company shall promptly use its best efforts to
prevent the issuance of any stop order or to obtain its withdrawal at
the earliest possible moment if such a stop order should be issued.
(iv) The Company will use its best efforts to qualify the Shares for
offering and sale under the securities laws of such jurisdictions as
you may designate and to continue such qualifications in effect for so
long as may be required for purposes of the distribution of the
Shares, except that the Company shall not be required in connection
therewith or as a condition thereof to qualify as a foreign
corporation or to execute a general consent to service of process in
any jurisdiction or to make any undertaking with respect to the
conduct of its business. In each jurisdiction in which the shares have
qualified as above provided, the Company will make and file such
statements and reports in each year as are or may be reasonable
required by the laws of such jurisdiction.
(v) The Company has furnished to you all Registration Statements filed
with the Commission prior to the date hereof and will furnish to you,
as soon as available, three copies of the Registration Statement
(including all exhibits), each Preliminary Prospectus or the Final
Prospectus and any amendments or supplements to such documents,
including any prospectus prepared to permit compliance with Section
10(a)(3) of the Act, all in such quantities as you may from time to
time reasonably request.
(vi) The Company will make generally available to its security holders
as soon as practicable, but in any event not later than the 45th day
following the end of the fiscal quarter first occurring after the
first anniversary of the "effective date of the Registration
Statement" (as defined in Rule 158(c) of the Rules and Regulations),
an earnings statement (which will be in reasonable detail but need not
be audited) complying with the provisions of Section 11(a) of the Act
and covering a twelve-month period beginning after the effective date
of the Registration Statement.
(vii) During a period of five years after the date hereof if required
by law or the applicable rules of the Commission, any securities
exchange or the National Association of Securities Dealers Inc. (the
"NASD"), the Company will furnish to its stockholders, as soon as
practicable after the end of each respective period, annual reports
(including financial statements audited by independent public
accountants) and unaudited quarterly reports of operations for each of
the first three quarters of the fiscal year, and will
furnish to you and the other several Underwriters hereunder, upon
request, (i) concurrently, if required (when available if not), with
furnishing such reports to its stockholders, statements of operations
of the Company for each of the first three quarters in the form
furnished to the Company's stockholders; (ii) concurrently with
furnishing to its stockholders, an annual report; (iii) as soon as
they are available, copies of all other reports (financial or other)
mailed to the Company's Stockholders; (iv) as soon as they are
available, copies of all reports and financial statements furnished to
or filed with the Commission, any securities exchange or the NASD; (v)
every material press release in respect of the Company or its affairs
which was released or prepared by the Company; and (vi) any additional
information of a public nature concerning the Company or its business
that you may reasonably request. During such five-year period, if the
Company shall have active Subsidiaries, the foregoing financial
statements shall be on a consolidated basis to the extent that the
accounts of the Company and its Subsidiaries are consolidated, and
shall be accompanied by similar financial statements for any
significant Subsidiaries that is not so consolidated.
(viii) The Company shall not, during the 180 days following the date
on which the Shares are first released by you for sale to the public,
except with the prior written consent of Xxxxxxx X. Xxxxx & Co., offer
for sale, sell, distribute or otherwise dispose of any shares of
Common Stock, or sell or grant options, rights or warrants with
respect to any shares of Common Stock (other than the grant of options
pursuant to option plans existing on the date hereof or the issuance
Common Stock upon exercise of outstanding options or Warrants), or any
securities convertible or exchangeable into Common Stock, except for
securities issued in connection with an acquisition.
(ix) The Company will apply the net proceeds from the sale of the
Shares being sold by it in the manner set forth under the caption "Use
of Proceeds" in the Final Prospectus.
b. The Selling Shareholder covenants and agrees with the several
Underwriters that:
(i) Such Selling Shareholder will not (i) take, directly or
indirectly, prior to the termination of the underwriting syndicate
contemplated by this Agreement, any action designed to cause or to
result in, or that might reasonably be expected to constitute, the
stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of any of the Shares, (ii)
sell, bid for, purchase or pay anyone any compensation for soliciting
purchases of, the Shares or (iii) pay to or agree to pay any person
any compensation for soliciting another to purchase any other
securities of the Company.
(ii) In order to document the Underwriters' compliance with the
reporting and withholding provisions of the Internal Revenue Code of
1986, as amended, with respect to the transactions herein
contemplated, the Selling Shareholder agrees to deliver to the
Underwriters prior to or at the First Time of Delivery a properly
completed and executed United States Treasury Department Form W-9 (or
other applicable form or statement specified by Treasury Department
regulations in lieu thereof).
5. EXPENSES.
a. The Company will pay and bear all costs and expenses in connection
with (i) the preparation, printing and filing of the Registration Statement
(including financial statements and exhibits), Preliminary Prospectuses,
Final Prospectus and any amendments or supplements thereto; (ii) the
printing of this Agreement, the Blue Sky Memoranda and any instruments
related to any of the foregoing, issuance and delivery of the Shares
hereunder to the several Underwriters, including taxes and the cost of all
stock certificates representing the Shares; fees and charges of the
Transfer Agent; fees and disbursements of counsel for the Company and
Selling Shareholder; (iii) all fees and other charges of the Company's
independent public accountants; (iv) the cost of furnishing to the several
Underwriters copies of the Registration Statement (including appropriate
exhibits), Preliminary Prospectuses, Final Prospectus and any amendments or
supplements to any of the foregoing; (v) NASD filing fees and the cost of
qualifying the Shares under the laws of the jurisdictions as you may
reasonably designate; (vi) the costs and expenses of the Company relating
to investor presentations on any "road show" undertaken in connection with
marketing the offering of the Shares, including, without limitation, travel
and lodging expenses of the Representatives and officers of the Company and
in connection with the road show (limited with respect to the
Representatives to the extent set forth in subparagraph 5(b) below); and
(vii) other expenses directly incurred by the Company in connection with
the performance of its obligations hereunder.
b. If the transactions contemplated hereby are not consummated by reason
of any refusal or inability on the part of the Company or Selling
Shareholder, to perform any agreement on their respective parts to be
performed hereunder or to fulfill any condition of the Underwriters'
obligations hereunder, of if the Company shall terminate the Agreement
under Section 10(a) hereof, the Company will reimburse the several
Underwriters for all reasonable out-of-pocket expenses (including any and
all reasonable fees and disbursements of Underwriters' Counsel) up to
$75,000 incurred by the Underwriters in preparing to market or marketing
the Shares.
6. CONDITIONS OF UNDERWRITERS' OBLIGATIONS
The obligations of the several Underwriters to purchase and pay for the
Shares as provided herein, shall be subject to the material accuracy, as of the
date hereof and the Closing Date and any later date on which Optional Shares are
to be purchased, as the case may be, of the representations and warranties of
the Company and Selling Shareholder herein, to the performance by the Company of
its obligations hereunder and to the following additional conditions:
a. The Registration Statement shall have become effective; if the filing
of the Final Prospectus, or any supplement thereto, is required pursuant to
Rule 424(b) of the Rules and Regulations, the Final Prospectus shall have
been filed in the manner and within the time period required by Rule 424(b)
of the Rules and Regulations; and no stop order suspending the
effectiveness thereof shall have been issued and no proceeding for that
purpose shall have been initiated or, to the knowledge of the Company or
any Underwriter, threatened by the Commission, and any request of the
Commission for additional information (to be included in the Registration
Statement or the Final Prospectus or otherwise) shall have been complied
with to the satisfaction of Underwriters' Counsel.
b. All corporate proceedings and other legal matters in connection with
this Agreement, the form of Registration Statement, all Preliminary
Prospectuses, the Final Prospectus, and the registration, authorization,
issue, sale and delivery of the Shares shall have been satisfactory to
Underwriters' Counsel and such counsel shall have been furnished with such
papers and information as they may reasonably have requested to enable them
to pass upon the matters referred to in this subsection.
c. You shall have received on the Closing Date and any later date on
which Option Shares are purchased, as the case may be, the following
opinions of opinions, certificates and letters, dated the Closing Date or
such later date, addressed to the Underwriters and with reproduced copies
or signed counterparts thereof for each of the Underwriters:
(i) the opinion of Manatt, Xxxxxx & Xxxxxxxx, LLP, counsel for the
Company to the effect that:
(a) Each of the Company and its Subsidiaries is a corporation
validly existing and in good standing under the corporate laws of
its jurisdiction of organization;
(b) Each of the Company and its Subsidiaries have the corporate
power and corporate authority (corporate and other) to own, lease
and operate its properties and conduct its business as described
in the Final Prospectus and each of the Company and its
Subsidiaries are qualified to do business as a foreign
corporation in good standing in all jurisdictions, if any, where
the ownership or leasing of properties or the conduct of its
business requires such qualification, except where a failure to
qualify would not have a material adverse effect upon the
condition, financial or otherwise, of the Company and the
Subsidiaries taken as a whole.
(c) The authorized, issued and outstanding capital stock of the
Company is as set forth in the Final Prospectus under the caption
"Capitalization" as of the date stated therein; and the issued
and outstanding shares of capital stock of the Company have been
legally issued, are fully-paid and non-assessable, and were not
issued in violation of any preemptive right or, to such counsel's
knowledge, other rights to purchase such shares;
(d) The Shares are validly authorized, and when issued, paid for
and delivered in accordance with the provisions of this
Agreement, will be validly issued, fully paid and non-assessable,
without any personal liability attaching to the ownership
thereof, and will not be issued in violation of any preemptive
rights to shareholders;
(e) The Company has filed all documents and has satisfied all
conditions that the staff of The NASDAQ SmallCap Market has
advised the Company are required to be filed or satisfied by the
Company in connection with the listing of the Common Stock on The
NASDAQ NMS;
(f) The specimen stock certificate of the Company filed as an
exhibit to the Registration Statement is in due and proper form
to evidence shares of Common Stock, has been duly authorized and
approved by the Board of Directors of the Company and complies
with all legal requirements applicable under the Michigan General
Corporation Law; and the description of the Company's stock
option and other stock plans or arrangements, and the options or
other rights granted and executed thereunder, as set forth in the
Final Prospectus accurately and firmly present the information
required to be shown with respect to such plans, arrangements,
options and rights.
(g) All of the issued shares of capital stock of each Subsidiary
of the Company have been duly and validly authorized and issued,
are fully paid and nonassessable. The Company owns one
hundred percent (100%) of the issued and outstanding capital
stock of (i) Wastenaw Mortgage Company, a Delaware corporation
and (ii) Pelican National Bank, a national bank;
(h) This Agreement has been duly authorized by all necessary
corporate action on the part of the Company and duly executed and
delivered by an authorized representative of the Company and,
assuming due authorization, execution and delivery by you, is a
valid and binding agreement of the Company enforceable against
the Company in accordance with its terms, except insofar as the
enforceability of indemnification and contribution provisions may
be limited by applicable law or equitable principles, and except
as enforceability may be limited by bankruptcy, reorganization,
moratorium or similar laws affecting the enforceability of
creditors' rights generally and rules of law governing
performance, injunctive relief and other equitable remedies;
(i) The Registration Statement has become effective under the
Act and, to counsel's knowledge, no stop order suspending the
effectiveness of the Registration Statement has been issued and
no proceedings for that purpose have been instituted and are
pending or contemplated under the Act; any required filing of the
Final Prospectus and any supplement thereto pursuant to Rule
424(b) of the Rules and Regulations have been made in the manner
and within the time period required by such Rule 424(b);
(j) The Registration Statement and the Final Prospectus, and
each amendment or supplement thereto (other than the financial
statements, financial data and supplemental schedules included
therein, as to which such counsel need express no opinion),
complies as to form in all material respects with the
requirements of the Act and the applicable Rules and Regulations;
(k) The terms and provisions of the capital stock of the Company
conform in all material respects to the description thereof
contained in the Registration Statement and the Final Prospectus,
and the information in the Final Prospectus under the caption
"Description of Capital Stock."
(l) To such counsel's knowledge, the performance of this
Agreement and the consummation of the transactions herein
contemplated will not result in a breach or violation of any of
the terms and provisions, or constitute a default under, any
indenture, mortgage, deed of trust, loan agreement, bond,
debenture, note agreement or other evidence of indebtedness, or
any lease, contract or other agreement or instrument to which the
Company is a party or by which its properties are bound and which
breach or violation
would have a material adverse effect upon the condition,
financial or otherwise, of the Company; the Company's Certificate
of Incorporation or By-laws; or, any statute, rule or regulation
or, to such counsel's knowledge after due inquiry, any order,
writ or decree of any court or governmental agency or body having
jurisdiction over the Company or over any of its properties or
operations;
(m) No authorization, approval or consent of any governmental
authority or agency is necessary in connection with the
consummation of the transactions herein contemplated except such
as have been obtained under the Act or such as may be required
under state or other securities or Blue Sky laws in connection
with the purchase and distribution of the Shares by the
Underwriters;
(n) To such counsel's knowledge, there are no legal or
governmental proceedings pending or threatened of a character
that are required to be disclosed in the Registration Statement,
by the Act or the applicable Rules and Regulations;
(o) To such counsel's knowledge, the Company is not presently in
breach of, or in default under any indenture, mortgage, deed of
trust, loan agreement, bond, debenture, note agreement or other
evidence of indebtedness or any other agreement or instrument
which would have a material adverse effect on the Company's
financial condition or to which the Company is a party or by
which any of its properties is bound;
(p) To such counsel's knowledge, except as described in the
Prospectus, no person, corporation, trust, partnership,
association or other entity has the right to include and/or
register any securities of the Company in the Registration
Statement, require the Company to file any registration
statement or, if filed, to include any security in such
registration statement;
(q) The descriptions of whole loan sales effected by the
Company, as contained in the Registration Statement and the Final
Prospectus, are true and complete in all material respects and no
event or series of events has occurred that would result in any
of the securities issued in securitizations using such loans
being downgraded or placed on a watch list with negative
implications by any rating agency or similar organization, or
that would impair the Company's or its Subsidiaries' ability to
consummate future whole loan sales or to securitize such loans
itself upon economic terms consistent with past whole loan sales
and securitizations of such loans or otherwise cause the Company
and its Subsidiaries to suffer any material adverse change with
respect to any past or future whole loan sale or securitization
(other than any such event or series of events described in the
Final Prospectus).
(r) To such counsel's knowledge, the description of the
secondary market activities effected by the Company, as set forth
in the Registration Statement and the Final Prospectus, is true
and complete in all material respects and to such counsel's
knowledge, no event or series of events has occurred that would
result in any of the securities issued in connection with any of
such secondary market activities being downgraded or placed on a
watch list with negative implications by any rating agency or
similar organization, or that would impair the Company's or its
Subsidiaries' ability to consummate future secondary market
activities upon economic terms consistent with past secondary
market activities or otherwise cause the Company and its
Subsidiaries to suffer any material adverse effect with respect
to any past or future secondary market activities (other than any
such event or series of events described in the Final
Prospectus).
(s) No Default or Event of Default (as defined in the Credit
Facility) has occurred and, to the best of the such counsel's
knowledge, there is no event which, with the giving of notice or
the passage of time or both, would give rise to such an event.
(t) The Company is not, after receiving the proceeds from the
sale of the Company Shares, an "investment company" within the
meaning of the 1940 Act.
(u) The statements in the Prospectus under the captions entitled
"BUSINESS," "REGULATION," "MANAGEMENT," "DESCRIPTION OF CAPITAL
STOCK," "CERTAIN RESTRICTIONS ON ACQUISITION OF THE COMPANY," and
"SELLING STOCKHOLER" have been reviewed by such counsel, and
insofar as they refer to statements of law, descriptions of
statutes, licenses, rules or regulations or legal conclusions,
are correct in all material respects;
(v) Based upon the description of the Company's business in the
Final Prospectus, each of the Company and its Subsidiaries hold
all material licenses, certificates, permits and approvals from
all state, Federal and other regulatory authorities that are
required for the Company to lawfully own, lease and operate its
properties and conduct its business as described in the Final
Prospectus, and to such counsel's knowledge, each of the Company
and its Subsidiaries are conducting its business in compliance
with all of the material laws, rules and regulations of each
jurisdiction in which it conducts its business.
(w) To such counsel's knowledge, there are no agreements,
contracts or other documents required by the Act to be described
in
the Registration Statement and the Final Prospectus and filed as
exhibits to the Registration Statement other than those described
in the Registration Statement (or required to be filed under the
Exchange Act if upon such filing they would be incorporated, in
whole or in part, by reference therein) and to such counsel's
knowledge the exhibits which have been filed are correct copies
of the documents of which they purport to be copies.
(x) Except as described in the Final Prospectus, to such
counsel's knowledge, the Company does not (i) maintain, sponsor
or contribute to any ERISA Plans, (ii) maintain or contribute,
now or at any time previously, to a defined benefit plan, as
defined in Section 3(35) of ERISA, and (iii) has never completely
or partially withdrawn from a "multiemployer plan."
In rendering such opinions, such counsel may rely (i) as to matters
involving the application of laws other than the laws of the United States and
jurisdictions in which they are admitted, to the extent such counsel deems
proper and to the extent specified in such opinion, if at all, upon an opinion
or opinions (in form and substance satisfactory to Underwriters' Counsel) of
other counsel acceptable to Underwriters' Counsel, familiar with the applicable
laws; (ii) as to matters of fact, to the extent they deem proper, on
certificates and written statements of responsible officers of the Company, and
certificates or other written statements of officers of departments of various
jurisdictions having custody of documents respecting the corporate existence or
good standing of the Company, provided that copies of any such statements or
certificates shall be delivered to Underwriters' Counsel if requested. The
opinion of such counsel for the Company shall state that the opinion of any such
other counsel is in form satisfactory to such counsel and that the
Representatives and they are justified in relying thereon. Such opinion shall
also state that the Underwriters' Counsel is entitled to rely thereon.
In addition, such counsel shall provide a letter addressed to the
Underwriters stating that although such counsel has not verified the accuracy or
completeness of the statements contained in the Registration Statement or the
Final Prospectus, nothing has come to the attention of such counsel that caused
such counsel to believe that, (a) at the time the Registration Statement became
effective, the Registration Statement (except as to financial statements,
financial data and supporting schedules contained therein, which need not be
addressed by such counsel) contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary to
make the statements therein not misleading, or (b) at the Closing Date or any
later date on which the Optional Shares are to be purchased, as the case may be,
the Registration Statement or the Final Prospectus (except as aforesaid)
contained any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading.
(ii) The counsel for the Selling Shareholder shall have furnished to
you their written opinion with respect to the Selling Shareholder for whom
they are
acting as counsel, dated the Closing Date, in form substance satisfactory
to you, to the effect that:
(a) This Agreement has been duly executed and delivered by such
Selling Shareholder.
(b) A Power of Attorney and Custody Agreement have been duly
authorized, executed and delivered by or on behalf of the Selling
Shareholder.
(c) The performance of this Agreement, the Power of Attorney and
the Custody Agreement and the consummation of the transactions
herein contemplated will not result in a breach or violation of
any of the terms and provisions, or constitute a default under,
any indenture mortgage, deed of trust, loan agreement, bond,
debenture, note agreement or other evidence of indebtedness, or
any lease, contract or other agreement or instrument known to
such counsel to which the Selling Shareholder is a party or by
which its properties are bound or to such counsel's knowledge,
any order, writ or decree of any court or governmental agency or
body having jurisdiction over Selling Shareholder or over any of
his properties;
(d) The Underwriters are acquiring the Optional Shares free of
any adverse claim (except for any restrictions on transfer that
may be imposed by law pursuant to federal or state securities
laws and except for claims created by or through the
Underwriters). The Selling Shareholder has the full right, power
and authority to sell, assign, transfer and deliver the Optional
Shares.
In rendering these opinions, such counsel may rely upon a certificate
of the Selling Shareholder as to matters of fact. The opinions rendered by
such counsel may contain normal assumptions, qualifications and limitations
with respect to the matters set forth therein.
(iii) You shall have received from Underwriters' Counsel an opinion or
opinions, dated the Closing Date, in form and substances satisfactory to
you, with respect to the sufficiency of all such corporate proceedings and
other legal matters relating to this Agreement and the transactions
contemplated hereby as you may reasonably require, and the Company shall
have furnished to such counsel such documents as it may have requested for
the purpose of enabling it to pass upon such matters.
(iv) At the time this Agreement is executed, the Underwriters shall
have received a letter, dated such date, addressed to the Underwriters in
form and substance satisfactory in all respects to the Underwriters and the
Underwriters' Counsel, from Xxxxx Xxxxxx & Company, LLP;
(a) confirming that they are independent certified public
accountants with respect to the Company within the meaning of the
Act and the applicable Rules and Regulations;
(b) stating that it is their opinion that the financial
statements and supporting schedules of the Company included in
the Registration Statement comply as to form in all material
respects with the applicable accounting requirements of the Act
and the Rules and Regulations thereunder and that the
Representatives may rely upon the opinion of Xxxxx Xxxxxx &
Company, LLP with respect to such financial statements and
supporting schedules included in the Registration Statement;
(c) stating that, on the basis of a limited review which
included a reading of the latest available unaudited interim
financial statements of the Company, a reading of the latest
available minutes of the stockholders and board of directors and
the various committees of the boards of directors of the Company,
consultations with officers and other employees of the Company
responsible for financial and accounting matters, nothing has
come to their attention which would lead them to believe that (i)
the pro forma financial information contained in the Registration
Statement and Prospectus does not comply as to form in all
material respects with the applicable accounting requirements of
the Act and the Rules and Regulations or is not fairly presented
in conformity with generally accepted accounting principles
applied on a basis consistent with that of the audited financial
statements of the Company, (ii) the unaudited financial
statements and supporting schedules of the Company included in
the Registration Statement do not comply as to form in all
material respects with the applicable accounting requirements of
the Act and the Rules and Regulations or are not fairly presented
in conformity with generally accepted accounting principles
applied on a basis substantially consistent with that of the
audited financial statements of the Company included in the
Registration Statement, or (iii) at a specified date not more
than five (5) days prior to the effective date of the
Registration Statement, or the most recent month end, there has
been any change in the capital stock of the Company, any change
in the long-term debt of the Company or any decrease in the
stockholders' equity of the Company or any decrease in the net
current assets or net assets of the Company as compared with
amounts shown in the March 31, 1999 balance sheet included in the
Registration Statement other than as set forth in or contemplated
by the Registration Statement, or the most recent month ended,
or, if there was any change or decrease, setting forth the amount
of such change or decrease, and (iv) during the period from March
31, 1999 to a specified date not more than five (5) days prior to
the effective date of the Registration Statement, there was any
decrease in net
revenues or net earnings of the Company or decrease in net
earnings per common share of the Company, in each case as
compared with the corresponding period beginning March 31, 1998,
other than as set forth in or contemplated by the Registration
Statement, or, if there was any such decrease, setting forth the
amount of such decrease;
(d) setting forth, at a date not later than five (5) days prior
to the date of the Registration Statement, or the most recent
month ended, the amount of liabilities of the Company (including
a break-down of non-interest bearing and interest bearing
deposits, warehouse line of credit, notes payable and repurchase
agreement);
(e) stating that they have compared specific dollar amounts,
numbers of shares, percentages of revenues and earnings,
statements and other financial information pertaining to the
Company set forth in the Prospectus in each case to the extent
that such amounts, numbers, percentages, statements and
information may be derived from the general accounting records,
including work sheets, of the Company and excluding any questions
requiring an interpretation by legal counsel, with the results
obtained from the application of specified readings, inquiries
and other appropriate procedures (which procedures do not
constitute an examination in accordance with generally accepted
auditing standards) set forth in the letter and found them to be
in agreement; and
(f) statements as to such other matters incident to the
transaction contemplated hereby as the Representative may
request.
(v) At the Time of Delivery, if any, the Underwriters shall have
received from Xxxxx Xxxxxx & Company, LLP a letter, dated as of the
Time of Delivery, as the case may be, to the effect that they reaffirm
the statements made in the letter furnished pursuant to subsection
(iv) of this Section hereof except that the specified date referred to
shall be a date not more than five days prior to the respective Times
of Delivery, if any, and, if the Company has elected to rely on Rule
430A of the Rules and Regulations, to the further effect that they
have carried out procedures as specified in clause (iv) of subsection
(i) of this Section with respect to certain amounts, percentages and
financial information as specified by the Representatives and deemed
to be a part of the Registration Statement pursuant to Rule 430A(b)
and have found such amounts, percentages and financial information to
be in agreement with the records specified in such clause (iv).
(vi) You shall have received on the Closing Date and on any later date
on which Optional Shares are purchased, as the case may be, a
certificate of the Company, dated the Closing Date or such later date,
signed by the President and Chief Financial Officer of the Company, to
the effect that, and you shall be satisfied that:
(a) The representations and warranties of the Company in this
Agreement are true and correct, as if made on and as of the
Closing Date or any later date on which Optional Shares are to be
purchased; and the Company has complied with all the agreements
and satisfied all the conditions on its part to be performed or
satisfied at or prior to the Closing Date or any later date on
which Optional Shares are to be purchased;
(b) To the best of their knowledge, no stop order suspending the
effectiveness of the Registration Statement has been issued, and
no proceedings for that purpose have been instituted or are
pending or threatened under the Act;
(c) When the Registration Statement became effective and at all
times subsequent thereto up to the delivery of such certificate,
the Registration Statement and the Final Prospectus and any
amendments or supplements thereto contained all statements and
information required to be included therein or necessary to make
the statements therein in light of the circumstances under which
they were made, not misleading and neither the Registration
Statement nor the Final Prospectus nor any amendment or
supplement thereto included any untrue statement of a material
fact or omitted to state any material fact required to be stated
therein or necessary to make the statement therein not misleading
and, since the effective date of the Registration Statement,
there has occurred no event required to be set forth in an
amended or supplemented Prospectus that has not been so set
forth;
(d) Subsequent to the respective dates as of which information
is given in the Registration Statement and the Final Prospectus,
and except as contemplated in the Final Prospectus, the Company
has not incurred any direct or contingent liabilities or
obligations material to the Company not in the ordinary course of
business, or entered into any transactions material to the
Company not in the ordinary course of business, and there has not
been any change in the capital stock or outstanding indebtedness
of the Company material to, or any material adverse change in,
the business, properties, assets, rights, operations, condition
(financial or otherwise) or prospects of the Company and its
Subsidiaries taken as a whole; and
(e) Subsequent to the respective dates as of which
information is given in the Registration Statement
and the Final Prospectus, the Company has not
sustained any material loss of or damages to its
properties, whether or not insured.
(vii) You shall have received on the date on which Optional
Shares are purchased, a certificate, dated such date, signed
by or on behalf of Selling Shareholder, to the effect that the
representations and warranties of such Selling Shareholder in
this Agreement are materially correct on and as of the date of
this Agreement and on and as of such date, as if made on and
as of such date, and that such Selling Shareholder complied
with all of the agreements and satisfied all the conditions on
its part to be performed or satisfied at or prior to such
date.
(viii) The Company shall have furnished to you such further
certificates and documents as you shall reasonably request
(including certificates of officers of the Company) as to the
accuracy of the representations and warranties of the Company
herein, as to the performance by the Company of their
respective obligations hereunder and as to the other
conditions concurrent and precedent to the obligations of the
Underwriters hereunder.
All such opinions, certificates, letters and documents will be in
compliance with the provisions hereof only if they are reasonably satisfactory
to Underwriters' Counsel. The Company will furnish you with such number of
conformed copies of such opinions, certificates, letters and documents as you
shall reasonably request.
d. The shares have been approved for trading upon notice of issuance on
The NASDAQ NMS.
e. The Lockup Letter shall have been delivered to the Underwriters and
the Company shall have noted the restrictions contained in such Lockup
Letters on the books and records of the Company relating to stock transfers
and on any certificates representing shares of Common Stock held by such
person.
7. INDEMNIFICATION AND CONTRIBUTION.
a. The Company agrees to indemnify and hold harmless each Underwriter
against any losses, claims, damages or liabilities, joint or several, to
which such Underwriter may become subject, under the Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon: (i) any untrue statement
or alleged untrue statement made by the Company in Section 1(a) of this
Agreement; (ii) any untrue statement or alleged untrue statement of any
material fact contained in (A) the Registration Statement or any amendment
thereto, any Preliminary Prospectus, Final Prospectus or any amendment or
supplement thereto, or (B) any application or other document, or any
amendment or supplement thereto, executed by the Company or based upon
written information furnished by or on behalf of the Company filed in any
jurisdiction in order to qualify the Shares under the
securities or blue sky laws thereof or filed with the Commission or any
securities association or securities exchange (each an "Application"); or
(iii) the omission or alleged omission to state in the Registration
Statement or any amendment thereto, any Preliminary Prospectus, Final
Prospectus or any amendment or supplement thereto, or any Application, a
material fact required to be stated therein or necessary to make the
statements therein not misleading, and will reimburse each Underwriter for
any legal or other expenses reasonably incurred by such Underwriter in
connection with investigating, defending against or appearing as a
third-party witness in connection with any such loss, claim, damage,
liability or action; provided, however, that the Company shall not be
liable in any such case to the extent that any such loss, claim, damage,
liability or action arises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission made in the
Registration Statement or any Amendment thereto, any Preliminary
Prospectus, Final Prospectus or any amendment or supplement thereto or any
Application, in reliance upon and in conformity with written information
furnished to the Company by any Underwriter expressly for use therein. The
obligations of the Company to indemnify the Underwriters (and any
controlling person of each Underwriter) pursuant to this Agreement is
subject to the condition that, insofar as such indemnity agreement shall
not inure to the benefit of any Underwriter from whom the person asserting
such losses, liabilities, claims, damages or expenses purchased the Shares
in the Offering, if (i) such Underwriter failed to deliver a copy of the
Final Prospectus to such person at or prior to the time delivery is
required by the Act, unless such failure was due to the failure by the
Company to provide copies of the Final Prospectus to such Underwriter; and
(ii) the delivery of such Final Prospectus to such person would have
constituted a complete defense to the losses, claims, damages, liabilities
or expenses asserted by such person. The Company will not, without the
prior written consent of each Underwriter, settle or compromise or consent
to the entry of any judgment in any pending or threatened claim, action,
suit or proceeding (or related cause of action or portion thereof) in
respect of which indemnification may be sought hereunder (whether or not
such Underwriter is a party to such claim, action, suit or proceeding),
unless such settlement, compromise or consent includes an unconditional
release of such Underwriter from all liability that arises out of such
claim, action, suit or proceeding (or related cause of action or portion
thereof).
b. The Selling Shareholder agrees to indemnify and hold harmless the
Company and each Underwriter against any losses, claims, damages or
liabilities, joint or several, to which the Company or such Underwriter may
become subject, under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are
based upon: (i) any untrue statement or alleged untrue statement made by
such Selling Shareholder in Section 1(b) of this Agreement; or (ii) any
untrue statement or alleged untrue statement of any material fact contained
in the Registration Statement or any amendment thereto, any Preliminary
Prospectus the Final Prospectus or any amendment or supplement thereto, or
any Application, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading; provided such
missing or untrue information was included in reliance upon or conformity
with written information furnished to the Company by the Selling
Shareholder expressly for use therein. The Selling Shareholder agrees to
reimburse each Underwriter for any legal or other expenses reasonably
incurred by such Underwriter in connection with investigating, defending
against or appearing as a third-party witness in connection with any such
loss, claim, damage, liability or action; provided, however, that such
Selling Shareholder shall be liable in any such case only to the extent
that any such loss, claim, damage, liability or action arises out of or is
based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in the Registration Statement or any amendment
thereto, any Preliminary Prospectus the Final
Prospectus or any amendment or supplement thereto or any Application, in
reliance upon and in conformity with written information furnished to the
Company by such Selling Shareholder expressly for use therein. The
obligations of the Selling Shareholder to indemnify the Underwriters (or
any controlling person of such Underwriter) pursuant to this indemnity
agreement is subject to the condition that, insofar as such losses, claims,
damages, liabilities or expenses relate to any such untrue statement,
alleged untrue statement, omission or alleged omission made in a
Preliminary Prospectus that is corrected in the Final Prospectus, such
indemnity agreement shall not inure to the benefit of any Underwriter from
whom the person asserting such losses, liabilities, claims, damages or
expenses purchased the Shares in the Offering, if (i) such Underwriter
failed to deliver a copy of the Final Prospectus to such person at or prior
to the time delivery of such Final Prospectus is required by the Act,
unless such failure was due to the failure by the Company to provide copies
of the Prospectus to such Underwriter; and (ii) the delivery of such Final
Prospectus to such person would have constituted a complete defense to the
losses, claims, damages, liabilities or expenses asserted by such person.
The Selling Shareholder will not, without the prior written consent of each
Underwriter, settle or compromise or consent to the entry of any judgment
in any pending or threatened claim, action, suit or proceeding (or related
cause of action or portion thereof) in respect of which indemnification may
be sought hereunder (whether or not such Underwriter is a party to such
claim, action, suit or proceeding), unless such settlement, compromise or
consent includes an unconditional release of such Underwriter from all
liability arising out of such claim, action, suit or proceeding (or related
cause of action or portion thereof). Notwithstanding the foregoing
provisions of this Section 7(b), the Underwriters shall not be entitled to
indemnity or contribution from the Selling Shareholder in excess of the net
proceeds of the offering (before deducting expenses) received by such
Selling Shareholder.
c. Each Underwriter, severally but not jointly, agrees to indemnify and
hold harmless the Company and the Selling Shareholder and their directors
and officers who sign the Registration Statement and any person who
controls the Company within the meaning of Section 15 of the Act or Section
20 of the Exchange Act, against any losses, claims, damages or liabilities
to which the Company or the Selling Shareholder may become subject under
the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon
(a) any untrue statement or alleged untrue statement of any material fact
contained in the Registration Statement or any amendment thereto, any
Preliminary Prospectus, the Final Prospectus, or any amendment or
supplement thereto, or any Application, or which arise out of or are based
upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein
not misleading, in each case to the extent, but only to the extent, that
such untrue statement or alleged untrue statement or omission or alleged
omission was made in reliance upon and in conformity with written
information furnished to the Company by such Underwriter expressly for use
therein or (b) the negligence or willful misconduct by such Underwriter,
and will reimburse the Company and the Selling Shareholder and their
directors and officers who sign the Registration Statement and any person
who controls the Company within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act, for any legal or other expenses reasonably
incurred by the Company or such Selling Shareholder and their directors and
officers who sign the Registration Statement and any person who controls
the Company within the meaning of Section 15 of the Act or Section 20 of
the Exchange Act, in connection with investigating or defending any such
loss, claim, damage, liability or action.
d. Promptly after receipt by an indemnified party under subsection (a),
(b) or (c) above of notice of the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made
against the indemnifying party under such subsection, notify the
indemnifying party in writing of the commencement thereof; but the omission
so to notify the indemnifying party shall not relieve it from any liability
which it may have to any indemnified party otherwise than under such
subsection. In case any such action shall be brought against any
indemnified party and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to
participate therein and to the extent that it shall wish, jointly with any
other indemnifying party similarly notified, to assume the defense thereof,
with counsel satisfactory to such indemnified party (who shall not, except
with the consent of the indemnified party, be counsel to the indemnifying
party); provided, however, that if the defendants in any such action
include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded based upon written advice
of counsel that there may be one or more legal defenses available to it or
other indemnified parties that are different from or additional to those
available to the indemnifying party, the indemnifying party shall not have
the right to assume the defense of such action on behalf of such
indemnified party and such indemnified party shall have the right to select
separate counsel to defend such action on behalf of such indemnified party,
provided, further, however, that the Company shall be liable for the fees
and expenses of only one separate firm of attorneys for all indemnified
parties at any time in connection with any action, suit or proceeding or in
a series of separate but substantially similar or related actions, suits or
proceedings arising out of the same general allegations and circumstances.
After such notice from the indemnifying party to such indemnified party of
its election so to assume the defense thereof and approval by such
indemnified party of counsel appointed to defend such action, the
indemnifying party will not be liable to such indemnified party under this
Section 7 for any legal or other expenses, other than reasonable costs of
investigation, subsequently incurred by such indemnified party in
connection with the defense thereof, unless (i) the indemnified party shall
have employed separate counsel in accordance with the proviso to the next
preceding sentence or (ii) the indemnifying party has authorized the
employment of counsel for the indemnified party at the expense of the
indemnifying party. Nothing in this Section 7(d) shall preclude an
indemnified party from participating at its own expense in the defense of
any such action so assumed by the indemnifying party.
e. If the indemnification provided for in this Section 7 is unavailable
to or insufficient to hold harmless an indemnified party under subsection
(a), (b), (c) or (d) above in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to therein, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or
liabilities (or actions in respect thereof) in such proportion as is
appropriate to reflect the relative benefits received by the Company and
the Selling Shareholder on the one hand and the Underwriters on the other
from the offering of the Shares. If, however, the allocation provided by
the immediately preceding sentence is not permitted by applicable law, then
each indemnifying party shall contribute to such amount paid or payable by
such indemnified party in such proportion as is appropriate to reflect not
only such relative benefits but also the relative fault of the Company and
the Selling Shareholder on the one hand and the Underwriters on the other
in connection with the statements or omissions that resulted in such
losses, claims, damages or liabilities (or actions in respect thereof), as
well as any other relevant equitable considerations. The relative benefits
received by the Company and the Selling Shareholder on the one hand and the
Underwriters on the other shall be deemed to be in the same proportion as
the total net proceeds from the offering (before deducting expenses)
received by the Company and the Selling Shareholder bear to the total
underwriting discounts and
commissions received by the Underwriters. The relative fault shall be
determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the
Company or the Selling Shareholder on the one hand or the Underwriters on
the other and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or
omission. The Company, the Selling Shareholder and the Underwriters agree
that it would not be just and equitable if contributions pursuant to this
subsection (e) were determined by pro rata allocation (even if the
Underwriters were treated as one entity for such purpose) or by any other
method of allocation which does not take account of the equitable
considerations referred to above in this subsection (e). The amount paid or
payable by an indemnified party as a result of the losses, claims, damages
or liabilities (or actions in respect thereof) referred to above in this
subsection (e) shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this subsection (e), (i) no Underwriter shall be required to
contribute any amount in excess of the amount by which the total price at
which the Shares underwritten by it and distributed to the public were
offered to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission, (ii) the Selling
Shareholder shall not be required to contribute any amount in excess of the
amount by which the net proceeds received by such Selling Shareholder from
the sale of Shares exceeds the damages which such Selling Shareholder has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission, and (iii) no person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Act) shall be entitled to contribution from any person who was not guilty
of such fraudulent misrepresentation. The Underwriters' obligations in this
subsection (e) to contribute are several in proportion to their respective
underwriting obligations and not joint.
f. The obligations of the Company and the Selling Shareholder under this
Section 7 shall be in addition to any liability which the Company or such
Selling Shareholder may otherwise have and shall extend, upon the same
terms and conditions, to each person, if any, who controls any Underwriter
within the meaning of the Act; and the obligations of the Underwriters
under this Section 7 shall be in addition to any liability which the
respective Underwriters may otherwise have and shall extend, upon the same
terms and conditions, to each officer and director of the Company and any
Selling Shareholder and to each person, if any, who controls the Company or
the Selling Shareholder within the meaning of the Act.
8. INDEMNITY, REPRESENTATIONS AND WARRANTIES TO SURVIVE DELIVERY. The
indemnity and contribution provisions contained in this Section 7 and the
representations, warranties and other statements of the Company and the Selling
Shareholder contained in this Agreement shall remain operative and in full force
and effect regardless of (i) any termination of this Agreement, (ii) any
investigation made by or on behalf of any Underwriter or any person controlling
any Underwriter, the Selling Shareholder or any person controlling the Selling
Shareholder, or the Company, its officers or directors or any person controlling
the Company and (iii) acceptance of and payment for any of the Shares.
9. DEFAULT BY UNDERWRITERS. If any Underwriter or Underwriters shall fail to
take up and pay for the number of Firm Shares agreed by such Underwriter of
Underwriters to be purchased hereunder upon tender of such Firm Shares in
accordance with the terms hereof and the aggregate number of Firm Shares that
such defaulting Underwriter or Underwriters so agreed but failed to purchase
does not exceed 10% of the Firm Shares, the remaining Underwriters shall be
obligated severally in proportion to their respective commitments hereunder, to
take up and pay for the Firm Shares of such defaulting Underwriter or
Underwriters.
If any Underwriter or Underwriters so defaults and the aggregate number of
Firm Shares that such defaulting Underwriter or Underwriters agreed but failed
to take up and pay for exceeds 10% of the Firm Shares, the remaining
Underwriters shall have the right, but shall not be obligated, to take up and
pay for (in such proportions as may be agreed upon among them) the Firm Shares
that the defaulting Underwriter or Underwriters so agreed but failed to
purchase. If such remaining Underwriters do not, at the Closing Date, take up
and pay for the Firm Shares that the defaulting Underwriter or Underwriters so
agreed but failed to purchase, the Closing Date shall be postponed for
twenty-four hours to allow the several Underwriters to substitute within
twenty-four hours (including non-business hours) another underwriter or
underwriters (which may include any nondefaulting Underwriter) satisfactory to
the Company. If no such underwriter or underwriters shall have been substituted
as aforesaid by such postponed Closing Date, the Closing Date may, at the option
of the Company, be postponed for a further twenty-four hours, if necessary, to
allow the Company to find another underwriter or underwriters, satisfactory to
you, to purchase the Firm Shares that the defaulting Underwriter or Underwriters
so agreed but failed to purchase. If it shall be arranged for the remaining
Underwriter or substituted Underwriters to take up the Firm Shares of the
defaulting Underwriter or Underwriters as provided in this Section, (i) the
Company shall have the right to postpone the time of delivery for a period of
not more than seven full business days, in order to effect whatever changes may
thereby be made necessary in the Registration Statement or the Final Prospectus,
or in any other documents or arrangements, and the Company agrees promptly to
file any amendments to the Registration Statements or supplements to the Final
Prospectus that may thereby be made necessary, and (ii) the respective number of
Firm Shares to be purchased by the remaining Underwriters and substituted
underwriters shall be taken as the basis of their underwriting obligation. If
the remaining Underwriters shall not take up and pay for all such Firm Shares so
agreed to be purchased by the defaulting Underwriter or Underwriters or
substitute another underwriter or underwriters as aforesaid and the Company
shall not find or shall not elect to seek another underwriter or underwriters
for such Firm Shares as aforesaid, then this Agreement shall terminate.
In the event of any termination of this Agreement pursuant to the preceding
paragraph of this Section, the Company shall not be liable to any Underwriter
(except as provided in Section 5 and in Section 7 hereof) nor shall any
Underwriter (other than an Underwriter who shall have failed, otherwise than for
some reason permitted under this Agreement, to purchase the number of Firm
Shares agreed by such Underwriter to be purchased hereunder, which Underwriter
shall remain liable to the Company and the other Underwriters for damages, if
any, resulting from such default) be liable to the Company (except to the extent
provided in Section 7 hereof).
The term "Underwriter" in this Agreement shall include any person
substituted for an Underwriter under this Section.
10. EFFECTIVE DATE OF THIS AGREEMENT AND TERMINATION
a. This Agreement shall become effective immediately as to Sections 5, 7,
9, 10 and 11 and, as to all other provisions (i) if at the time of
execution of this Agreement the Registration Statement has not become
effective, at 9:00 A.M., Eastern time, on the first full business day
following the effectiveness of the Registration Statement, or (ii) if at
the time of execution of this Agreement the Registration Statement has been
declared effective, at 9:00 A.M., Eastern time, on the first business day
following the date of execution of this Agreement; but this Agreement shall
nevertheless become effective at such earlier time after the Registration
Statement becomes effective as you may determine on and by notice to the
Company or by release of any of the Shares of sale to the public. For the
purposes of this Section 10, the Shares shall be deemed to have been so
released upon the release for publication of any newspaper advertisement
relating to the Shares or upon the release by you of telegrams (i) advising
the Underwriters that the Shares are released for public offering, or (ii)
offering of Shares for sale to securities dealers, whichever may occur
first. By giving notice as set forth in Section 11 before the time this
Agreement becomes effective, you, as the Representatives of the several
Underwriters, or the Company, may prevent this Agreement from becoming
effective without liability of any party to any other party, except that
the Company shall remain obligated to pay costs and expenses to the extent
provided in Section 5a and 5b hereof.
b. You shall have the right to terminate this Agreement by giving notice
as hereinafter specified at any time on or prior to the Closing Date or on
or prior to any later date on which the Option Shares are to be purchased
as the case may be (i) if the Company or Selling Shareholder shall have
failed, refused or been unable, on or prior to the Closing Date, or on or
prior to any later date on which the Option Shares are to be purchased, as
the case may be, to perform any agreement on its part to be performed, or
because any other condition of the Underwriters' obligations hereunder
required to be fulfilled by the Company is not fulfilled, or (ii) if
trading on the New York Stock Exchange shall have been suspended, or
minimum or maximum prices for trading shall have been fixed, or maximum
ranges for prices for securities shall have been required on the New York
Stock Exchange, by the New York Stock Exchange or by order of the
Commission or any other governmental authority having jurisdiction, or if a
banking moratorium shall have been declared by federal or New York or
California authorities, or (iii) if at or prior to the Closing Date, or on
or prior to any later date on which Option Shares are to be purchased, as
the case may be, the Company shall have sustained a loss by strike, fire,
flood, accident or other calamity of such character as to interfere
materially with the conduct of the business and operations of the Company
regardless of whether or not such loss shall have been insured, or (iv) if
at or prior to the Closing Date, or on or prior to any later date on which
Option Shares are to be purchased, as the case may be, there shall have
been an outbreak or escalation of hostilities in which the United States is
involved or other national or international calamity or any substantial
change in political, financial or economic conditions shall have occurred
or shall have accelerated to such extent, in the judgment of the
Representatives, as to have a material adverse effect on the financial
markets of the United States, or to make it impracticable or inadvisable to
proceed with completion of the sale of and payment for the Shares. Any such
termination shall be without liability or any party to any other party
except as provided in Sections 5a and 5b hereof and except that in the
event of termination solely pursuant to Section 10(b)(i) hereof, the
Company shall remain obligated to pay costs and expenses pursuant to
Section 5a and b hereof.
If you elect to prevent this Agreement from becoming effective or to
terminate this Agreement as provided in this Section 10, the Company shall be
notified promptly by you by telephone or telegram,
confirmed by letter. If the Company shall elect to prevent this Agreement from
becoming effective, you shall be notified promptly by the Company by telephone
or telegram, confirmed by letter.
11. NOTICES. All notices or communications hereunder, except as herein
otherwise specifically provided, shall be in writing and if sent to you shall be
mailed, delivered or telegraphed and confirmed to Xxxxxxx X. Xxxxx & Co., 000
0xx Xxxxxx, Xxxxx 000, Xx. Xxxxxxxxxx, XX, 00000, Attention: Xxxxxxx X. Xxxxx,
with a copy sent to Xxxxx X. Xxxxxxxxx, Esq., Schifino & Xxxxxxxxx, P.A., 000 X.
Xxxxxxxx Xxxxxx, Xxxxx 0000, Xxxxx, XX 00000; if sent to the Company shall be
mailed, delivered or telegraphed and confirmed to PN Holdings, Inc., 000 Xxxx
Xxxxxxxxxx, Xxx Xxxxx, Xxxxxxxx 00000, Attention: Xxxxxxx X. Xxxxxxx, with a
copy sent to Xxxxxx X. Xxxxxx, Esq., Manatt, Xxxxxx & Xxxxxxxx, LLP, 0000 X
Xxxxxx, X. X., Xxxxxxxxxx, X.X. 00000-0000.
12. PARTIES. This Agreement shall inure to the benefit of and be binding upon
the several Underwriters, the Company and Selling Shareholder and their
respective successors and assigns. Nothing expressed or mentioned in this
Agreement is intended or shall be construed to give any person or corporation,
other than the parties hereto and their respective successors and assigns and
the controlling persons, officers and directors referred to in Section 7 hereof,
any legal or equitable rights, remedy or claim in respect of this Agreement or
any provisions herein contained, this Agreement and all conditions and
provisions hereof being intended to be and being for the sole and exclusive
benefit of the parties hereto and their respective executors, administrators,
successors and assigns and said controlling persons and said officers and
directors, and for the benefit of no other person or corporation. No purchaser
of any of the shares from any Underwriter shall be construed a successor or
assign by reason merely of such purchase.
In all dealings with the Company under this Agreement, you shall act on
behalf of each of the several Underwriters, and the Company shall be entitled to
act and rely upon any statement, request, notice or agreement on behalf of each
of the several Underwriters as if the same shall have been made or given in
writing by you.
13. APPLICABLE LAW. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of Florida.
14. COUNTERPARTS. This Agreement may be signed in several counterparts, each of
which will constitute an original.
15. INFORMATION PROVIDED BY UNDERWRITERS. The information set forth in the last
paragraph on the front cover page (insofar as such information relates to the
Underwriters) and under "Underwriting" in any Preliminary Prospectus and in the
Final Prospectus constitutes the only information furnished by the Underwriters
to the Company for inclusion in any Preliminary Prospectus, the Final Prospectus
or the Registration Statement, and you on behalf of the respective Underwriters,
represent and warrant to the Company that the statements made therein do not
contain an untrue statement of a material fact and do not fail to state any
material fact required to be stated therein in order to make such statements in
light of the circumstances under which they were made not misleading.
[Remainder of page intentionally left blank.]
If the foregoing correctly sets forth the understanding among the Company,
the several Underwriters and the Selling Shareholder please so indicate in the
space provided below for that purpose, whereupon this letter shall constitute a
binding agreement among the Company, the several Underwriters and the Selling
Shareholder.
Very truly yours,
PN HOLDINGS, INC.
By:
----------------------------------------
THE SELLING SHAREHOLDER
XXXXXXX X. XXXXXXX
By:
ATTORNEY-IN-FACT
Accepted as of the date first above written:
Xxxxxxx X. Xxxxx & Co.
on their behalf and on behalf of each of the
Several Underwriters named in Schedule I hereto.
By: Xxxxxxx X. Xxxxx & Co.
By:
Xxxxxxx X. Xxxxx, Chairman
SCHEDULE I
MAXIMUM
NUMBER NUMBER OF
OF FIRM SHARES OPTIONAL
TO BE SHARES TO BE
UNDERWRITER PURCHASED PURCHASED
--------------------------------------------------------------------------------
Xxxxxxx X. Xxxxx & Co.
SCHEDULE II
NUMBER OF NUMBER OF
FIRM SHARES OPTIONAL SHARES
TO BE SOLD TO BE SOLD
-------------- ---------------
The Company............................ 1,200,000 0
Xxxxxxx X. Xxxxxxx..................... 0 180,000
-------------- --------
1,200,000 180,000
SCHEDULE III
SUBSIDIARIES
STATE OR JURISDICTION OF
NAME INCORPORATION % OWNERSHIP
--------------------------------------------------------------------------------
Wastenaw Mortgage Company Michigan 100%
Pelican National Bank United States 100%
