1
EXHIBIT 1.1
MICHIGAN COMMUNITY BANCORP LIMITED
1,000,000 SHARES*
COMMON STOCK
FORM OF UNDERWRITING AGREEMENT
_______, 1998
Fifth Third/The Ohio Company
as Representative of the Several
Underwriters Named in Schedule 1
000 Xxxx Xxxxx Xxxxxx
Xxxxxxxx, Xxxx 00000
Ladies and Gentlemen:
Michigan Community Bancorp Limited, a Michigan corporation (the
"Company"), hereby confirms its agreement with Fifth Third/The Ohio Company, an
Ohio corporation (the "Representative") and the several Underwriters named in
Schedule 1 (collectively, with the Representative, the "Underwriters") as set
forth below.
1. Securities. Subject to the terms and conditions herein contained, the
Company proposes to issue and sell to the Underwriters an aggregate of 1,000,000
shares of common stock of the Company (the "Firm Shares"). The Company also
proposes to issue and sell to the Underwriters not more than an aggregate of
150,000 additional shares of common stock of the Company, if requested by the
Underwriters as provided in Section 3 of this Agreement (the "Option Shares").
The Firm Shares and any Option Shares are collectively referred to in this
Agreement as the "Shares".
---------------
*Plus an option to purchase from the Company up to 150,000 shares to cover over-
allotments.
2
2. Representations and Warranties of the Company.
The Company represents and warrants to and agrees with, each of the
Underwriters as follows:
(a) The Company has carefully prepared in conformity with the
requirements of the Securities Act of 1933, as amended (the "Securities
Act") and the rules and regulations adopted by the Securities and Exchange
Commission (the "Commission") thereunder (the "Rules"), a registration
statement on Form SB-2 (File No. 333-_____), including a preliminary
prospectus, and has filed with the Commission the registration statement
and such amendments thereof as may have been required to the date of this
Agreement. Copies of such registration statement (including all amendments
thereof) and of the related preliminary prospectus have heretofore been
delivered by the Company to you. The term "preliminary prospectus" means
any preliminary prospectus (as defined in Rule 430 of the Rules) included
at any time as a part of the registration statement. The registration
statement as amended (including any supplemental registration statement
under Rule 462(b) or any amendment under Rule 462(c) of the Rules) at the
time and on the date it becomes effective (the "Effective Date"),
including the prospectus, financial statements, schedules, exhibits, and
all other documents incorporated by reference therein or filed as a part
thereof, is called the "Registration Statement;" provided, however, that
"Registration Statement" shall also include all Rule 430A Information (as
defined below) deemed to be included in such Registration Statement at the
time such Registration Statement becomes effective as provided by Rule
430A of the Rules. The term "Prospectus" means the Prospectus as filed
with the Commission pursuant to Rule 424(b) of the Rules or, if no filing
pursuant to Rule 424(b) of the Rules is required, means the form of final
prospectus included in the Registration Statement at the time such
Registration Statement becomes effective. The term "Rule 430A Information"
means information with respect to the Shares and the offering thereof
permitted to be omitted from the Registration Statement when it becomes
effective pursuant to Rule 430A of the Rules. Reference made herein to any
preliminary prospectus or to the Prospectus shall be deemed to refer to
and include any document attached as an exhibit thereto or incorporated by
reference therein, as of the date of such preliminary prospectus or the
Prospectus, as the case may be. The Company will not file any amendment of
the Registration Statement or supplement to the Prospectus to which the
Representative shall reasonably object in writing after being furnished
with a copy thereof.
(b) Each preliminary prospectus, at the time of filing thereof,
contained all material statements which were required to be stated therein
in accordance with the Securities Act and the Rules, and conformed in all
material respects with the requirements of the Securities Act and the
Rules, and did not include any untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which
they were made, not misleading. The Commission has not issued any order
suspending or preventing the use of any preliminary prospectus. When the
Registration Statement shall become effective, when
2
3
the Prospectus is first filed pursuant to Rule 424(b) of the Rules, when
any post-effective amendment of the Registration Statement shall become
effective, when any supplement to or pre-effective amendment of the
Prospectus is filed with the Commission and at each Closing Date, the
Registration Statement and the Prospectus (and any amendment thereof or
supplement thereto) will comply with the applicable provisions of the
Securities Act and the Exchange Act and the respective rules and
regulations of the Commission thereunder, and neither the Registration
Statement nor the Prospectus, nor any amendment thereof or supplement
thereto, will contain any untrue statement of a material fact or will omit
to state any material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under
which they were made, not misleading; provided, however, that the Company
makes no representation or warranty as to the information contained in the
Registration Statement or the Prospectus or any amendment thereof or
supplement thereto in reliance upon and in conformity with information
furnished in writing to the Company through the Representative by or on
behalf of any of the Underwriters, specifically for use in connection with
the preparation thereof.
(c) All contracts and other documents required to be filed as
exhibits to the Registration Statement have been filed with the Commission
as exhibits to the Registration Statement.
(d) Xxxxxx & Xxxxx, LLP, whose report is filed with the Commission
as part of the Registration Statement, are, and during the periods covered
by their report were, independent public accountants as required by the
Securities Act and the Rules.
(e) The Company's only proposed subsidiaries are Lakeside Community
Bank ("LCB") and North Oakland Community Bank ("NOCB," and collectively
with LCB, the "Banks"). The Company and each of the Banks have been duly
organized and are validly existing as a corporation or banking
corporation, as applicable, in good standing under the laws of the State
of Michigan. Neither the Company nor any of the Banks have any properties
or conduct any business outside of the State of Michigan which would
require any of them to be qualified as a foreign corporation or bank, as
the case may be, in any jurisdiction outside of Michigan. Neither the
Company nor any of the Banks has any directly or indirectly held
subsidiary other than the Banks with respect to the Company. The Company
has all power, authority, authorizations, approvals, consents, orders,
licenses, certificates and permits needed to enter into, deliver and
perform this Agreement and to issue and sell the Shares.
(f) The application for permission to organize LCB (the "LCB FIB
Application") and the application for permission to organize NOCB (the
"NOCB FIB Application," and collectively with the LCB FIB Application, the
"FIB Applications") were both approved by the Commissioner of the
Financial Institutions Bureau for the State of Michigan (the
"Commissioner") on ________, 1998, pursuant to Order No. __________ and
Order No. __________, respectively, subject to certain conditions
specified in the Order and
3
4
supplemental correspondence from the Commissioner dated the same date. The
Orders and supplemental correspondence from the Commissioner are
collectively referred to in this Agreement as the "FIB Orders" All
conditions contained in the FIB Orders required to be satisfied before the
date of this Agreement have been satisfied. The application of each Bank
to the Federal Deposit Insurance Corporation (the "FDIC") to become an
insured depository institution under the provisions of the Federal Deposit
Insurance Act, as amended, (the "FDIC Applications") was approved by
[order/orders] of the FDIC dated __________ (the "FDIC Orders"), subject
to certain conditions specified in the FDIC Orders. All conditions
contained in the FDIC Orders required to be satisfied before the date of
this Agreement have been satisfied. The Company's application to become a
bank holding company and acquire all of the issued capital stock of each
of the Banks (the "Bank Holding Company Application") under the Bank
Holding Company Act of 1956, as amended, was approved on __________ (the
"Federal Reserve Board Approval"), subject to certain conditions specified
in the Federal Reserve Board Approval. All conditions in the Federal
Reserve Board Approval required to be satisfied before the date of this
Agreement have been satisfied. Each of the FIB Applications, FDIC
Applications, and Bank Holding Company Application, at the time of their
respective filings, contained all required information and such
information was complete and accurate in all material respects. Other than
the remaining conditions to be fulfilled under the FIB Orders, FDIC Orders
and the Federal Reserve Board Approval specified above, no authorization,
approval, consent, order, license, certificate or permit of and from any
federal, state, or local governmental or regulatory official, body, or
tribunal, is required for the Company or any of the Banks to commence and
conduct their respective businesses and own their respective properties as
described in the Prospectus, except such authorizations, approvals,
consents, orders, licenses, certificates, or permits as are not material
to the commencement or conduct of their respective businesses or to the
ownership of their respective properties.
(g) The financial statements of the Company and any related notes
thereto, included in the Registration Statement and the Prospectus,
present fairly the financial position of the Company as of the date of
such financial statements and for the period covered thereby. Such
statements and any related notes have been prepared in accordance with
generally accepted accounting principles applied on a consistent basis and
certified by the independent accountants named in subsection 4(d) above.
No other financial statements are required to be included in the
Prospectus or the Registration Statement.
(h) The Company owns adequate and enforceable rights to use any
patents, patent applications, trademarks, trademark applications, service
marks, copyrights, copyright applications and other similar rights
(collectively, "Intangibles") necessary for the conduct of the material
aspects of its business as described in the Prospectus and the Company has
not infringed, is infringing, or has received any notice of infringement
of any Intangibles of any other person.
4
5
(i) The Company has valid and enforceable leasehold interests in the
real property described in the Prospectus, and such leasehold interests
are free and clear of all liens, encumbrances, claims, security interests
and defects.
(j) There are no litigation or governmental or other proceedings or
investigations pending before any court or before or by any public body or
board or threatened against the Company or any of the Banks and to the
best of the Company's knowledge, there is no reasonable basis for any such
litigation, proceedings or investigations, which would have a material
adverse effect on commencement or conduct of the respective businesses of
the Company or any of the Banks or the ownership of their respective
properties.
(k) The Company and each of the Banks have filed all federal, state,
and local tax returns required to be filed by them and paid all taxes
shown due on such returns as well as other material taxes, assessments and
governmental charges which have become due; no material deficiency with
respect to any such return has been assessed or proposed.
(l) Subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus, there has not been
any material adverse change in the condition (financial or other),
business, properties or prospects of the Company.
(m) No default exists, and no event has occurred which with notice
or lapse of time, or both, would constitute a default, in the due
performance and observance of any material term, covenant or condition, by
the Company, the Banks or, to the best of the Company's knowledge, any
other party, of any lease, indenture, mortgage, note or any other
agreement or instrument to which the Company or the Bank is a party or by
which either of them or either of their businesses may be bound or
affected, except such defaults or events as are not material to the
commencement or conduct of their respective businesses or ownership of
their respective properties.
(n) Neither the Company nor any of the Banks is in violation of any
term or provision of the articles of incorporation or bylaws of the
Company or the Banks. Neither the Company nor either of the Banks is in
violation of, nor is either of them required to take any action to avoid
any material violation of, any franchise, license, permit, judgment,
decree, order, statute, rule or regulation.
(o) Neither the execution, delivery or performance of this Agreement
by the Company nor the consummation of the transactions contemplated
hereby (including, without limitation, the issuance and sale by the
Company of the Shares) will give rise to a right to terminate or
accelerate the due date of any payment due under, or conflict with or
result in the breach of any term or provision of, or constitute a default
(or an event which with notice of lapse of time, or both, would constitute
a default) under, or require any consent under, or result in the execution
or imposition of any lien, charge or encumbrance upon any properties or
assets of the Company or any of the Banks pursuant to the terms of, any
lease, indenture,
5
6
mortgage, note or other agreement or instrument to which the Company or
any of the Banks is a party or by which either of them or either of their
businesses may be bound or affected, or any franchise, license, permit,
judgment, decree, order, statute, rule or regulation or violate any
provision of the articles of incorporation or bylaws of the Company or any
of the Banks, except those which are immaterial in amount or effect.
(p) The Company has authorized capital stock as set forth in the
Prospectus. No shares of preferred stock are issued and outstanding. The
issuance, sale and delivery of the Shares have been duly authorized by all
necessary corporate action by the Company and, when issued, sold and
delivered against payment therefor pursuant to this Agreement, will be
duly and validly issued, fully paid and nonassessable and none of them
will have been issued in violation of any preemptive or other right. Upon
issuance, sale, and delivery thereof against payment therefor pursuant to
the subscription agreement, all of the capital stock of the Bank will be
duly authorized and validly issued, fully paid and nonassessable and will
be owned by the Company, free and clear of all liens, encumbrances and
security interests (subject to the provisions of the Michigan Banking Code
of 1969 (the "Banking Code"), including, without limitation, Section 77
and 201 of the Banking Code). There is no outstanding option, warrant or
other right calling for the issuance of, and no commitment, plan or
arrangement to issue, any share of stock of the Company or the Bank or any
security convertible into or exchangeable for stock of the Company or the
Bank, except for stock options described in the Registration Statement
(the "Stock Options") under the 1998 Employee Stock Option Plan and the
1998 Nonemployee Stock Option Plan (collectively, the "Stock Option
Plans"). The Common Stock, the Shares and the Stock Options conform to all
statements in relation thereto contained in the Registration Statement and
the Prospectus.
(q) Subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus, neither the
Company nor either of the Banks has (1) issued any securities or incurred
any material liability or obligation, direct or contingent, (2 entered
into any material transaction, or (3) declared or paid any dividend or
made any distribution on any of their stock, except liabilities,
obligations, and transactions reasonably expected based on the disclosures
in the Prospectus.
(r) This Agreement has been duly and validly authorized, executed
and delivered by the Company and is the legal, valid and binding agreement
and obligation of the Company.
(s) The Commission has not issued any order preventing or suspending
the use of any preliminary prospectus with respect to the Shares and has
not instituted or, to the Company's knowledge, threatened to institute any
proceedings with respect to such an order.
(t) Neither the Company, nor any of the Banks, nor, to the Company's
knowledge any director, officer, agent, employee or other person
associated with the
6
7
Company or any of the Banks, acting on behalf of the Company or any of the
Banks, has used any corporate funds for any unlawful contribution, gift,
entertainment or other unlawful expense relating to political activity;
made any direct or indirect unlawful payment to any foreign or domestic
government official or employee from corporate funds; violated or is in
violation of any provision of the Foreign Corrupt Practices Act of 1977;
or made any bribe, rebate, payoff, influence payment, kickback or other
unlawful payment.
(u) Neither the Company nor any of the Banks nor any affiliate of
either of them has taken, and they will not take, directly or indirectly,
any action designed to cause or result in, or which has constituted or
which might reasonably be expected to constitute, the stabilization or
manipulation of the price of the shares of the Common Stock in order to
facilitate the sale or resale of any of the Shares.
(v) No transaction has occurred between or among the Company or any
of the Banks and any of their officers, directors, organizers or the
Company's shareholder or any affiliate or affiliates of any such officer,
director, organizer, or shareholder, that is required to be described in
and is not described in the Prospectus.
(w) The Company is not and will not after the offering be an
"investment company", or a company "controlled" by an "investment
company," within the meaning of the Investment Company Act of 1940, as
amended.
(x) The Company intends to apply its proceeds from the sale of the
Shares for the purposes set forth in the Prospectus under "Use of
Proceeds."
(y) The Company has obtained from all of its executive officers and
directors their written agreement that for a period of 180 days from the
date of the Effective Date, they will not offer to sell, sell, transfer,
contract to sell, or grant any option for the sale of or otherwise dispose
of, directly or indirectly, any shares of Common Stock of the Company (or
any securities convertible into or exercisable for such shares of Common
Stock).
3. Purchase, Sale and Delivery of the Shares.
(a) On the basis of the representations, warranties, agreements and
covenants contained in this Agreement and subject to the terms and
conditions set forth in this Agreement, the Company agrees to sell to each
of the Underwriters, and each of the Underwriters, individually and not
jointly, agrees to purchase from the Company, at a purchase price equal to
$______ per Firm Share the number of shares set forth opposite the name of
such Underwriter in Schedule 1 to this Agreement. One or more certificates
in definitive form for the Firm Shares that the several Underwriters have
agreed to purchase under this Agreement, and in such denomination or
denominations and registered in such name or names as you request upon
notice to the Company at least 48 hours prior to the Firm Closing Date,
shall be delivered by or on behalf of the Company to you on the Closing
Date
7
8
for the respective accounts of the several Underwriters, against payment
by or on behalf of the Underwriters of the purchase price therefor by
certified or official bank checks drawn upon or by a New York Clearing
House bank and payable in next-day funds to the order of the Company or at
the option of the Underwriters, by wire transfer to the account of the
Company in same-day funds. Such delivery of, and payment for, the Firm
Shares shall be made at the offices of Fifth Third/The Ohio Company, 000
Xxxx Xxxxx Xxxxxx, Xxxxxxxx, Xxxx 00000, at 9:30 A.M., local time, on
__________, 1998, or at such other place, time or date as you and the
Company may agree upon or as you may determine pursuant to Section 9 of
this Agreement, such time and date of delivery against payment being
referred to in this Agreement as the "Firm Closing Date". The Company will
make such certificate or certificates for the Firm Shares available to you
for inspection at the offices of _______________ at least 24 hours prior
to the Firm Closing Date.
(b) On the basis of the representations, warranties, agreements and
covenants contained in this Agreement and subject to the terms and
conditions set forth in this Agreement, pursuant to directions from the
Company, the Underwriters will offer to sell to each of the persons named
in a list provided by the Company to the Underwriters (who may purchase to
the extent permitted by the Free-Riding and Withholding Interpretation
(the "Interpretation") under Rule 2110, Conduct Rules of the National
Association of Securities Dealers, Inc. (the "NASD")) the number of Shares
set forth opposite their respective names. To the extent such persons
offer to buy such Shares, the Underwriter agrees to purchase up to
________ of such Shares at a purchase price of $_____ per Firm Share. The
parties agree that the securities purchased and sold under this
subparagraph to the Company's employees and directors shall constitute
"issuer directed securities" under the Interpretation. The provisions of
this Section 1(b) shall not affect the Underwriters' right, with respect
to persons who are not employees or directors of the Company, to withdraw,
cancel or modify orders or to reject orders in whole or in part.
(c) For the sole purpose of covering any over-allotments in
connection with the distribution and sale of the Firm Shares as
contemplated by the Prospectus, the Company hereby grants to the
Underwriters options to purchase, individually and not jointly, the Option
Shares in accordance with the provisions of this Agreement. The purchase
price to be paid for any Option Shares shall be the same as the price for
the Firm Shares set forth above in paragraph (a) of this Section 3. The
options granted hereby may be exercised as to all or any part of the
Option Shares from time to time within 30 days after the date of the
Prospectus (or, if such 30th day shall be a Saturday or a Sunday or a
holiday, on the next business day thereafter when the New York Stock
Exchange is open for trading). The Underwriters shall not be under any
obligation to purchase any of the Option Shares prior to the exercise of
such options. The Underwriters may from time to time exercise the options
granted hereby by giving notice in writing or by telephone (confirmed in
writing) to the Company setting forth the aggregate principal amount of
Option Shares as to which the Underwriters are then exercising the options
and the date and time for delivery of and payment for such Option Shares.
Any such date of delivery shall be determined by the
8
9
Underwriters but shall not be earlier than two business days or later than
seven business days after such exercise of the options and, in any event,
shall not be earlier than the Firm Closing Date. The time and date set
forth in such notice, or such other time, date or both as the Underwriters
and the Company may agree upon or as the Underwriters may determine
pursuant to Section 9 of this Agreement, are called the "Option Closing
Date" in this Agreement with respect to such Option Shares. Upon exercise
of the options as provided in this Agreement, the Company shall become
obligated to sell to each of the Underwriters, and, on the basis of the
representations and warranties contained in this Agreement and subject to
the terms and conditions set forth in this Agreement, each of the
Underwriters, individually and not jointly, shall become obligated to
purchase from the Company, the same percentage of the Option Shares as to
which the Underwriters are then exercising the options as such Underwriter
is obligated to purchase of the aggregate number of Firm Shares. If the
options are exercised as to all or any portion of the Option Shares, one
or more certificates in definitive form for such Option Shares, and
payment therefor, shall be delivered on the related Option Closing Date in
the manner, and upon the terms and conditions, set forth in paragraph (a)
of this Section 3, except that reference therein to the Firm Shares and
the Firm Closing Date shall be deemed, for purposes of this paragraph (b),
to refer to such Option Shares and Option Closing Date, respectively.
(d) You have advised the Company that each Underwriter has
authorized you to accept delivery of its Firm Shares (and Option Shares,
if any of the options is exercised), to make payment and to give receipt
therefor.
4. Offering by the Underwriters. Upon your authorization of the release of
the Firm Shares, the Underwriters propose to offer their respective portions of
the Firm Shares for sale to the public upon the terms set forth in the
Prospectus.
5. Covenants.
The Company covenants and agrees with each of the Underwriters that
it will:
(a) Use its best efforts to cause the Registration Statement to
become effective and will notify the Representative immediately, and
confirm the notice in writing, (i) when the Registration Statement and any
post-effective amendment thereto becomes effective, (ii) of the issuance
by the Commission of any stop order or of the initiation, or the
threatening, of any proceedings for that purpose and (iii) of the receipt
of any comments form the Commission. The Company will make every
reasonable effort to prevent the issuance of a stop order, and, if the
Commission shall enter a stop order at any time, the Company will make
every reasonable effort to obtain the lifting of such order at the
earliest possible moment.
(b) During the time when a prospectus is required to be delivered
under the Securities Act, comply so far as it is able with all
requirements imposed upon it by the
9
10
Securities Act, as now and hereafter amended, and by the Rules, as from
time to time in force, so far as necessary to permit the continuance of
sales of or dealings in the Shares. If at any time when a prospectus
relating to the Shares is required to be delivered under the Securities
Act any event shall have occurred as a result of which, in the reasonable
opinion of counsel for the Company or counsel for the Representative, the
Registration Statement or Prospectus as then amended or supplemented
includes an untrue statement of a material fact or omits to state any
material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they
were made, not misleading, or if it is necessary at any time to amend or
supplement the Registration Statement or Prospectus to comply with the
Securities Act, the Company will notify the Representative promptly and
prepare and file with the Commission an appropriate amendment or
supplement in form satisfactory to the Representative. The cost of
preparing, filing and delivering copies of such amendment or supplement
shall be paid by the Company.
(c) Deliver to the Underwriters such number of copies of each
preliminary prospectus as may reasonably be requested by the Underwriters,
through the Representative, and, as soon as the Registration Statement, or
any amendment or supplement thereto, becomes effective, deliver to each of
the Underwriters three signed copies of the Registration Statement,
including exhibits, and all post-effective amendments thereto and deliver
to each of the Underwriters such number of copies of the Prospectus, the
Registration Statement and supplements and amendments thereto, if any,
without exhibits, as the Representative may reasonably request.
(d) Endeavor in good faith, in cooperation with the Representative
and its counsel, at or prior to the time the Registration Statement
becomes effective, to qualify the Shares for offering and sale under the
securities laws relating to the offering or sale of the Shares of the
states listed in Schedule 3. In each jurisdiction where such qualification
shall be effected, the Company will, unless the Representative and its
counsel agree that such action is not at the time necessary or advisable,
file and make such statements or reports at such times as are or may
reasonably be required by the laws of such jurisdiction. The Company will
advise the Representative promptly of the suspension of the qualification
of the Shares for offering, sale or trading in any jurisdiction, or any
initiation or threat of any proceeding for such purpose, and in the event
of the issuance of any order suspending such qualification, the Company,
with the cooperation of the Representative, will use all reasonable
efforts to obtain the withdrawal thereof.
(e) Furnish its security holders as soon as practicable an earnings
statement (which need not be certified by independent certified public
accountants unless required by the Securities Act or the Rules) covering a
period of at least twelve months beginning after the effective date of the
Registration Statement, which shall satisfy the provisions of Section
11(a) of the Securities Act and the Rules thereunder.
10
11
(f) For a period of five years from the Effective Date, furnish to
its shareholders annual audited and quarterly unaudited consolidated
financial statements with respect to the Company including balance sheets
and income statements.
(g) For a period of five years from the Effective Date, furnish to
the Underwriters the following:
(i) at the time they have been sent to shareholders of the
Company or filed with the Commission one copy of each annual,
quarterly, interim, or current financial and other report or
communication sent by the Company to its shareholders or filed with
the Commission;
(ii) as soon as practicable, one copy of every press release
and every material news item and article in respect of the Company
or the affairs of the Company which was released by the Company;
(iii) all other information reasonably requested by the
Underwriters with respect to the Company to comply with Rule 15c2-11
of the Rules and Section 4 of Schedule H of the NASD Bylaws; and
(iv) such additional documents and information with respect to
the Company and its affairs as the Representative may from time to
time reasonably request.
(h) Acquire all of the LCB's and NOCB's outstanding capital stock,
free and clear of all liens, encumbrances, or other claims or restrictions
whatsoever, for not less than $4.55 million and $4.6 million,
respectively, from the proceeds of the offering and, in all other material
respects, apply the net proceeds from the offering in the manner set forth
under "Use of Proceeds" in the Prospectus.
(i) Not file any amendment or supplement to the Registration
Statement or Prospectus after the effective date of the Registration
Statement to which the Representative shall reasonably object in writing
after being furnished a copy thereof.
(j) Timely file with the Commission reports on Form SR (if
applicable) containing the information required by that Form in accordance
with the provisions of Rule 463 of the Regulation under the Securities
Act.
(k) Comply with all registration, filing and reporting requirements
of the Securities Act or the Exchange Act, which may from time to time be
applicable to the Company.
11
12
(l) Cause the proper submission of the Certificate of Paid In
Capital and Surplus, give advance written notice to the Commissioner of
the Bank's projected opening date, and in all other respects use
reasonable efforts to comply with the requirements of, and satisfy the
conditions of, the FIB Orders, the FDIC Orders and the Federal Reserve
Board Approval;.
(m) Pay, or reimburse if paid by the Representative, whether or not
the transactions contemplated hereby are consummated or this Agreement is
terminated, all costs and expenses incident to the performance of the
obligations of the Company under this Agreement, including those relating
to (1) the preparation, printing, filing and delivery of the Registration
Statement, including all exhibits thereto, each preliminary prospectus,
the Prospectus, all amendments of and supplements to the Registration
Statement and the Prospectus, and the printing of the Underwriting
Agreement and related agreements including, without limitation, the
Selected Dealer Agreement, (2) the issuance of the Shares and the
preparation and delivery of certificates for the Shares to the
Underwriter, (3) the registration or qualification of the Shares for offer
and sale under the securities or "blue sky" laws of the various
jurisdictions referred to in Schedule 3, including the fees and
disbursements of counsel in connection with such registration and
qualification and the preparation and printing of preliminary,
supplemental, and final blue sky memoranda, (4) the furnishing (including
costs of shipping and mailing) to the Underwriter of copies of each
preliminary prospectus, the Prospectus and all amendments of or
supplements to the Prospectus, and of the several documents required by
this Section to be so furnished, (5) the filing requirements and fees of
the NASD in connection with its review of the terms of the public offering
and the underwriting, (6) the furnishing (including costs of shipping and
mailing) of copies of all reports and information required by Section
5(g), (7) all transfer taxes, if any, with respect to the sale and
delivery of the Shares by the Company to the Underwriters, (8) the
inclusion of the Shares on the OTC Bulletin Board; and (9) the
Underwriters' accountable out-of-pocket expenses, including without
limitation, road show expenses and legal fees of counsel to the
Representative (provided that such legal fees payable by the Company shall
not exceed $50,000).
(n) Not, without the prior written consent of the Representative,
sell, contract to sell or grant any option for the sale of or otherwise
dispose of, directly or indirectly, or register with the Commission, any
shares of Common Stock of the Company (or any securities convertible into
or exercisable for such shares of Common Stock) within 180 days after the
date of the Prospectus, except as provided in this Agreement and except
for grants and exercises of Stock Options under the Stock Option Plans as
described in the Prospectus.
(o) For not less than three fiscal years after the Effective Date,
maintain the Exchange Act registration of the Common Stock, unless the
Company's shareholders direct the Company to re-register the Common Stock.
12
13
(p) Use its best efforts to cause itself and the Banks to commence
their respective businesses as described in the Prospectus not later than
December 31, 1998.
(q) Not, for one year after the Effective Date, issue any stock
options to purchase Common Stock under either of the Stock Option Plans,
or any other stock option plan of the Company, that have an exercise price
of less than $15.00 per share.
6. Expenses. The Company will pay all costs, expenses, fees and taxes
incident to the performance of its obligations under this Agreement, whether or
not the transactions contemplated by this Agreement are consummated or this
Agreement is terminated pursuant to Section 11 of this Agreement, including all
costs, expenses, fees and taxes incident to (1) the preparation, printing or
other production and filing of documents with respect to the transactions,
including any costs of printing the registration statement originally filed with
respect to the Shares and any amendment thereto (including, without limitation,
the Registration Statement), any Preliminary Prospectus and the Prospectus and
any amendment or supplement thereto, this Agreement, the Agreement Among
Underwriters, the Selected Dealer Agreement, the Underwriters' Questionnaire and
Power of Attorney, any blue sky memoranda and all other agreements, memoranda,
correspondence and other documents printed and delivered in connection with the
offering of the Shares, (2) all arrangements relating to the delivery to the
Underwriters of copies of the foregoing documents, (3) the fees and
disbursements of the counsel, the accountants and any other experts or advisors
retained by the Company, (4) preparation, issuance and delivery to the
Underwriters of any certificates evidencing the Shares, including transfer
agent's and registrar's fees, (5) the registration or qualification of the
Shares under state securities and blue sky laws, including filing fees and the
reasonable legal fees and disbursements of counsel for the Underwriters relating
thereto or to the "Blue Sky" survey, (6) the filing fees of the Commission and
the National Association of Securities Dealers, Inc. relating to the Shares and
any listing fees relating to the Securities, (7) advertising approved by the
Company (which approval shall not be unreasonably withheld) relating to the
offering of the Shares (other than as shall have been specifically approved by
the Underwriters to be paid for by the Underwriters), and (8) the Company's
out-of-pocket expenses, including transportation, meals and lodging with respect
to the road shows and other selling efforts. If the sale of the Firm Shares
provided for in this Agreement is not consummated because any condition to the
obligations of the Underwriters set forth in Section 7 of this Agreement is not
satisfied, because this Agreement is terminated pursuant to Section 11 of this
Agreement, because of any failure, refusal or inability on the part of the
Company to perform all obligations and satisfy all conditions on its or their
part to be performed or satisfied under this Agreement (other than by reason of
a default by any of the Underwriters) or for any other reason (other than
because of the Underwriters' refusal (except for bona fide reasons related to
the Company, its officers, directors, employees or agents or market conditions)
or inability to perform), the Underwriters will account for their reasonable and
accountable expenses and the Company will reimburse the Underwriters
individually upon demand for all of their reasonable out-of-pocket expenses
(including counsel fees and disbursements of counsel) that shall have been
incurred by them in connection with the proposed purchase and sale of the
Shares. The Representative acknowledges receipt of $25,000 from the Company,
which has been paid as a good faith deposit to be applied against the Company's
reimbursement obligation to the Underwriters.
13
14
If the sale of Firm Shares is not consummated for the reasons described above,
the Representative shall refund to the Company the amount by which such good
faith deposit exceeds the actual out-of-pocket expenses of the Underwriters for
which they are entitled to reimbursement.
7. Conditions of the Underwriters' Obligations. The obligations of the
Underwriters to purchase the Shares shall be subject to the accuracy of the
representations and warranties of the Company in this Agreement as of the date
of this Agreement and as of the Firm Shares Closing Date or Optional Shares
Closing Date, as the case may be, to the accuracy of the statements of Company
officers made pursuant to the provisions of this Agreement, to the performance
by the Company of its obligations under this Agreement, and to the following
additional terms and conditions:
(a) The Registration Statement shall have become effective not later
than 5:00 P.M., Columbus time, on the date of this Agreement or on such
later date and time as shall be consented to in writing by the
Representative; if the filing of the Prospectus, or any supplement
thereto, is required pursuant to Rule 424(b) of the Rules, the Prospectus
shall have been filed in the manner and within the time period required by
Rule 424(b) of the Rules; at each Closing Date, if any, no stop order
shall have been issued or proceedings therefor initiated or threatened by
the Commission; and any request of the Commission for inclusion of
additional information in the Registration Statement, or otherwise, shall
have been complied with to the reasonable satisfaction of the
Representative
(b) At each Closing Date, the Representative shall have received the
opinion of Butzel Long, counsel for the Company, dated the Firm Shares
Closing Date or the Optional Shares Closing Date, as the case may be,
addressed to the Underwriters and in form and scope reasonably
satisfactory to counsel for the Representative to the effect that:
(i) Each of the Company and the Banks (A) is a corporation or
banking corporation, as applicable, existing and in good standing
under the laws of the State of Michigan and (B) is not required to
be qualified to do business in any jurisdiction outside Michigan,
except where the failure to so qualify would not have a material
adverse effect on the Company or the Bank.
(ii) Each of the Company and the Banks has full corporate
power and authority and all material authorizations, approvals,
orders, licenses, certificates and permits of and from all
governmental regulatory officials and bodies necessary to own or
lease their respective properties and conduct their respective
businesses as described in the Registration Statement and
Prospectus;
(iii) The Company has authorized capital stock as set forth in
the Prospectus; the Shares have been duly authorized and validly
issued and upon receipt by the Company of payment therefor in
accordance with the terms of this Agreement will be fully paid and
nonassessable and are not subject to preemptive rights; the Shares
and the other capital stock and Stock Options of the Company conform
in all
14
15
material respects to the descriptions thereof contained in the
Registration Statement and the Prospectus;
(iv) To such counsel's knowledge, after due inquiry, the
Company has no directly or indirectly held subsidiary other than the
Banks;
(v) When issued, sold and delivered against payment therefor
in accordance with the terms of the subscription agreement, the
Company will be the registered holder of all of the outstanding
capital stock of the Banks, and all such shares of stock so held
will be duly authorized and validly issued, fully paid and
nonassessable and will be owned free and clear of any liens,
encumbrances or other claims or restrictions whatsoever, subject to
the provisions of the Banking Code;
(vi) The certificates evidencing the Shares are in the form
approved by the Board of Directors of the Company, comply with the
Bylaws and the Articles of Incorporation of the Company, and comply
as to form and in all other material respects with applicable legal
requirements;
(vii) This Agreement has been duly and validly authorized,
executed and delivered by the Company, and is the legal, valid and
binding agreement and obligation of the Company enforceable in
accordance with its terms, except (a) as enforcement thereof may be
limited by bankruptcy, insolvency, reorganization, moratorium or the
laws relating to or affecting enforcement of creditors' rights or by
general equity principles, whether applied in an action at law or in
equity, or by the discretionary nature of specific performance,
injunctive relief, and other equitable remedies, including the
appointment of a receiver, and (b), with respect to provisions
relating to indemnification and contribution, to the extent they are
held by a court of competent jurisdiction to be void or
unenforceable as against public policy;
(viii) The Company is conveying to the Underwriters good and
valid title to the Shares, free and clear of any liens,
encumbrances, security interests, restrictions, and adverse claims;
(ix) To the best of such counsel's knowledge, after due
inquiry, there are (A) no contracts or other documents which are
required to be filed as exhibits to the Registration Statement other
than those filed as exhibits thereto, (B) no legal or governmental
proceedings pending or threatened against the Company or any of the
Banks, and (C) no statutes or regulations applicable to the Company
or any of the Banks, or certificates, permits, grants or other
consents, approvals, orders, licenses or authorizations from
regulatory officials or bodies, which are required to be obtained or
maintained by the Company or any of the Banks and which are of
character required to be disclosed in the Registration Statement and
Prospectus which have not been so disclosed and properly described
therein;
15
16
(x) The statements in the Registration Statement and the
Prospectus, insofar as they are descriptions of corporate documents,
stock option plans, contracts, agreements or other documents
specifically identified in the Registration Statement or
descriptions of laws, regulations, or regulatory requirements, or
refer to compliance with law or to statements of law or legal
conclusions, are correct in all material respects;
(xi) To the best of such counsel's knowledge, after due
inquiry, the execution, delivery and performance of this Agreement,
the consummation of the transactions herein contemplated and the
compliance with the terms and provisions hereof by the Company will
not give rise to a right to terminate or accelerate the due date of
any payment due under, or conflict with or result in a breach of any
of the terms or provisions of, or constitute a default (or an event
which, with notice or lapse of time, or both, would constitute a
default) under, or require any consent under, or result in the
execution or imposition of any lien, charge or encumbrance upon any
properties or assets of the Company or any of the Banks pursuant to
the terms of, any lease, indenture, mortgage, note or other
agreement or instrument to which the Company or any of the Banks is
a party or by which either of them or either of their properties or
businesses is or may be bound or affected, nor will such action
result in any violation of the provisions of the articles of
incorporation or bylaws of the Company or any of the Banks or any
statute or any order, rule, or regulation applicable to the Company
or any of the Banks of any court or any federal, state, local or
other regulatory authority or other governmental body, the effect of
which, in any such case, would be expected to have a material
adverse effect to the Company or any of the Banks;
(xii) To the best of such counsel's knowledge, after due
inquiry, no consent, approval, authorization or order of any court
or governmental agency or body, domestic or foreign, is required to
be obtained by the Company in connection with the execution and
delivery of this Agreement or the sale of the Shares to the
Underwriter as contemplated by this Agreement, except such as have
been obtained;
(xiii) To the best of such counsel's knowledge, after due
inquiry, (A) neither the Company nor any of the Banks is in a breach
of, or in default (and no event has occurred which, with notice or
lapse of time, or both, would constitute a default) under, any
lease, indenture, mortgage, note, or other agreement or instrument
to which the Company or the Bank is a party; or (B) neither the
Company nor any of the Banks is in violation of any term or
provision of either of their articles of incorporation or bylaws, or
of any franchise, license, grant, permit, judgment, decree, order,
statute, rule or regulation; and (C) neither the Company nor any of
the Banks has received any notice of conflict with the asserted
rights of others in respect of Intangibles necessary for the
commencement or conduct of its business, the effect of
16
17
which, in any such case, would be expected to have a material
adverse effect on the Company or the Bank;
(xiv) The Registration Statement and the Prospectus and any
amendments or supplements thereto (other than the financial
statements as to which no opinion need to be rendered) comply as to
form in all material respects with the requirements of the
Securities Act and the Rules; and
(xv) The Registration Statement is effective under the
Securities Act, and any required filing of the Prospectus pursuant
to Rule 424(b) has been made in the manner and within the time
period required by Rule 424(b) and, to the best of such counsel's
knowledge, after due inquiry, no stop order suspending the
effectiveness of the Registration Statement or any post-effective
amendment to the Registration Statement and no order directed any
document incorporated by reference in the Registration Statement or
the Prospectus or any amendment or supplement thereto has been
issued, and no proceedings for that purpose have been instituted or
threatened or are contemplated by the Commission.
In rendering the foregoing opinion, such counsel may rely upon
certificates of public officials (as to matters of fact and law) and
officers of the Company (as to matters of fact), and include customary
qualifications in its opinion as are acceptable to the Representative
Copies of all such certificates shall be furnished to counsel to the
Representative on the Closing Date.
In addition, such counsel shall state that they have participated in
conferences with officials of the Company and its independent auditors,
and representatives of the Representative and its counsel at which the
content of the Registration Statement and Prospectus and related matters
were discussed, and also had discussions with such officials of the
Company with a view toward a clear understanding on their part of the
requirements of the Securities Act with reference to the preparation of
registration statements and prospectuses. Such counsel did not
independently verify the accuracy or completeness of the statements made
in the Registration Statement and Prospectus; however, based on such
counsel's examination of the Registration Statement and the Prospectus and
on its participation in the above-mentioned conferences, nothing has come
to the attention of such counsel that gives them reason to believe that
the Registration Statement or Prospectus (other than financial statements
and notes, any related schedules or other financial information contained
in such Registration Statement or Prospectus as to which such counsel need
express no opinion or belief), at the time the Registration Statement
became effective, contained any untrue statement of a material fact or
omitted to state any material fact required to be stated therein or
necessary to make the statements therein not misleading or that the
Prospectus (other than financial statement and notes, any related
schedules or other financial information contained in such Prospectus or
amendment or supplement thereto, as to which such counsel need express no
opinion or belief), as of the date of the opinion,
17
18
contains any untrue statement of a material fact or omits to state a
material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.
(c) On or prior to each Closing Date, the Representative shall have
been furnished such documents, certificates and opinions as it may
reasonably require for the purpose of enabling it to review the matters
referred to in subsection (b) of this Section 7, and in order to evidence
the accuracy, completeness or satisfaction of the representations,
warranties or conditions herein contained.
(d) Prior to each Closing Date, (i) there shall have been no
material adverse change in the condition or prospects, financial or
otherwise, of the Company or any of the Banks; (ii) there shall have been
no material transaction, not in the ordinary course of business, entered
into by the Company or any of the Banks except as set forth in the
Registration Statement and Prospectus, other than transactions referred to
or contemplated therein or to which the Representative has given its
written consent; (iii) neither the Company nor any of the Banks shall be
in default (nor shall an event have occurred which, with notice or lapse
of time, or both, would constitute a default) under any provision of any
material agreement, understanding or instrument relating to any
outstanding indebtedness that is material in amount; (iv) no action, suit
or proceeding, at law or in equity, shall be pending or threatened against
the Company or any of the Banks before or by any court of Federal, state
or other commission, board or other administrative agency having
jurisdiction over the Company or any of the Banks, as the case may be,
which is expected to have a material adverse effect on the Company or any
of the Banks; and (v) no stop order shall have been issued under the
Securities Act and no proceedings therefor shall have been initiated or be
threatened by the Commission.
(e) At each Closing Date, the Underwriters shall have received a
certificate signed by the Chief Executive and Chief Financial Officers of
the Company dated the Firm Shares Closing Date or Optional Shares Closing
Date, as the case may be, to the effect that the conditions set forth in
subsection (d) above have been satisfied and as to the accuracy, as of the
Firm Shares Closing Date or the Optional Shares Closing Date, as the case
may be, of the representations and warranties of the Company set forth in
Section 4 hereof.
(f) At or prior to each Closing Date, the Underwriters shall have
received a "blue sky" memorandum (upon which the Representative may rely)
of Xxxxxx Xxxxxxx PLLC, counsel for the Underwriters, addressed to the
Representative and in form and scope reasonably satisfactory to the
Representative concerning compliance with the blue sky or securities laws
of the states designated by the Representative.
(g) All proceedings taken in connection with the sale of the Shares
as herein contemplated shall be reasonably satisfactory in form and
substance to the Representative and to counsel for the Representative, and
the Representative shall have received from
18
19
counsel for the Representative a favorable opinion, dated as of each
Closing Date, with respect to such of the matters set forth under
Subsections (b)(i), (iii), (vi), (vii) and (xv) of this Section 7, and
with respect to such other related matters as the Representative may
require, if the failure to receive a favorable opinion with respect to
such other related matters would cause the Representative to deem it
inadvisable to proceed with the sale of the Shares.
(h) There shall have been duly tendered to the Representative
certificates representing all the Shares agreed to be sold by the Company
on the Firm Shares Closing Date or the Optional Shares Closing Date, as
the case may be.
(i) No order suspending the sale of the Shares prior to each Closing
Date in any jurisdiction in which the Shares have been registered, shall
have been issued on the Firm Shares Closing Date or the Optional Shares
Closing Date, as the case may be, and no proceedings for that purpose
shall have been instituted or, to the Representative's knowledge or that
of the Company, shall be contemplated.
(j) The NASD, upon review of the terms of the public offering of the
Shares, shall not have objected to the Underwriter's participation in the
same.
If any condition to the Underwriter's obligations hereunder to be
fulfilled prior to or at the Firm Shares Closing Date or the Optional Shares
Closing Date, as the case may be, is not so fulfilled, the Representative may
terminate this Agreement pursuant to Section 11 hereof or, if the Representative
so elects, waive any such conditions which have not been fulfilled and/or extend
the time of their fulfillment.
8. Indemnification and Contribution.
(a) The Company agrees to indemnify and hold harmless each
Underwriter, their respective directors, officers, partners, agents and
employees and each other person, if any, who controls any Underwriter
within the meaning of Section 15 of the Securities Act or Section 20 of
the Exchange Act (collectively, "Indemnitees") against any losses, claims,
damages or liabilities, joint or several, to which such Indemnitee may
become subject under the Securities Act, the Exchange Act or other federal
or state statutory law or regulation, at common law or otherwise, insofar
as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of, relate to, or are caused by or based upon,
(1) any untrue statement or alleged untrue statement made by
the Company in this Agreement,
(2) any untrue statement or alleged untrue statement of any
material fact contained in (A) the Registration Statement or any
amendment thereto or any Preliminary Prospectus or the Prospectus or
any amendment or supplement thereto, or (B) any application or other
document, or any amendment or supplement thereto,
19
20
executed by the Company or based upon written information furnished
by or on behalf of the Company filed in any jurisdiction in order to
register or qualify the Shares under the securities or blue sky laws
thereof or filed with the Commission or any securities association
or securities exchange (each an "Application"),
(3) any omission or alleged omission to state in the
Registration Statement or any amendment thereto a material fact
required to be stated therein or necessary to make the statements
therein not misleading or any omission or alleged omission to state
in any Preliminary Prospectus or the Prospectus or any amendment or
supplement thereto, or any Application a material fact required to
be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not
misleading, or
(4) any untrue statement or alleged untrue statement of any
material fact contained in any audio or visual materials used in
connection with the marketing of the Shares, including, without
limitation, slides, videos, films, and tape recordings, except to
the extent such materials were prepared by the Underwriters,
and will reimburse, as incurred, each Indemnitee for any legal or other
expenses reasonably incurred by such Indemnitee in connection with
investigating, defending against, or appearing as a third-party witness in
connection with, any such loss, claim, damage, liability or action;
provided, however, that the Company will not be liable in any such case to
the extent that any such loss, claim, damage or liability arises out of,
is related to, or is caused by or based upon, any untrue statement or
alleged untrue statement or omission or alleged omission made in such
Registration Statement or any amendment thereto, any Preliminary
Prospectus, the Prospectus or any amendment or supplement thereto, or any
Application in reliance upon, and in conformity with, written information
furnished to the Company by any Underwriter expressly for use therein; and
provided, further, that the Company will not be liable to any Indemnitee
with respect to any such untrue statement or omission made in any
Preliminary Prospectus that is corrected in the Prospectus (or any
amendment or supplement thereto) if the person asserting any such loss,
claim, damage or liability purchased Shares from such Underwriter but was
not sent or given a copy of the Prospectus (as amended or supplemented),
other than the documents incorporated by reference therein, at or prior to
the written confirmation of the sale of such Shares to such person in any
case where such delivery of the Prospectus (as amended or supplemented) is
required by the Securities Act and where delivery of such Prospectus (as
amended or supplemented) would have cured the defect giving rise to such
loss, claim, damage or liability, unless such failure to deliver the
Prospectus (as amended or supplemented) was a result of noncompliance by
the Company with Section 5(d) or 5(e) of this Agreement. This indemnity
agreement will be in addition to any liability which the Company may
otherwise have. The Company will not, without the prior written consent of
the Underwriters (which consent shall not be unreasonably withheld),
settle or compromise or consent to the entry of any judgment in any
pending or threatened claim, action, suit or proceeding in respect of
which indemnification may be
20
21
sought hereunder (whether or not any such Indemnitee is a party to such
claim, action, suit or proceeding), unless (1) such settlement, compromise
or consent includes an unconditional release of all of the Indemnitees
from all liability arising out of such claim, action, suit or proceeding
and (2) the entire settlement amount and all costs of settlement and all
related costs are borne by the Company or another third party other than
any of the Indemnitees.
(b) Each Underwriter, individually and not jointly, will indemnify
and hold harmless the Company, each of its directors, each of its officers
who signed the Registration Statement and each person, if any, who
controls the Company within the meaning of Section 15 of the Securities
Act or Section 20 of the Exchange Act against any losses, claims, damages
or liabilities to which the Company, any such director or officer of the
Company, or any such controlling person of the Company may become subject
under the Securities Act, the Exchange Act or other federal or state
statutory law or regulation, at common law or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof)
arise out of, relate to, or are caused by or are based upon,
(1) any untrue statement or alleged untrue statement of any
material fact contained in the Registration Statement or any
amendment thereto, any Preliminary Prospectus or the Prospectus or
any amendment or supplement thereto, or any Application, or
(2) any omission or alleged omission to state in the
Registration Statement or any amendment thereto a material fact
required to be stated therein or necessary to make the statements
therein not misleading or any omission or alleged omission to state
in any Preliminary Prospectus or any amendment or supplement
thereto, or any Application a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading,
in each case of (1) and (2) above to the extent, but only to the extent,
that such untrue statement or alleged untrue statement or omission or
alleged omission has been made in reliance upon, and in conformity with,
written information furnished to the Company by such Underwriter expressly
for use therein; and, subject to the limitation set forth immediately
preceding this clause, will reimburse, as incurred, any legal or other
expenses reasonably incurred by the Company or any such director, officer
or controlling person in connection with investigating or defending
against any such loss, claim, damage, liability or action. This indemnity
agreement will be in addition to any liability which such Underwriter may
otherwise have.
(c) Promptly after receipt by an indemnified party under this
Section 8 of notice of the commencement of any action (including any
governmental investigation), such indemnified party will, if a claim in
respect thereof is to be made against the indemnifying party under this
Section 8, notify the indemnifying party of the commencement of such
21
22
action; but the omission so to notify the indemnifying party will not
relieve it from any liability which it may have to any indemnified party
otherwise than under this Section 8 and will not relieve it from any
liability under this Section 8 except to the extent the indemnifying party
is actually prejudiced by the failure to give such notice. In case any
such action is brought against any indemnified party, and it notifies the
indemnifying party of the commencement thereof, the indemnifying party
will be entitled to participate therein and, to the extent that it may
wish, jointly with any other indemnifying party similarly notified, to
assume the defense thereof, with counsel reasonably satisfactory to such
indemnified party; provided, however, that if the parties to any such
action (including any impleaded parties) include both the indemnified
party and the indemnifying party or any officers, directors or controlling
persons of such indemnifying party and the indemnified party shall have
reasonably concluded that there may be one or more legal defenses
available to it and/or other indemnified parties which are different from
or additional to those available to the indemnifying party, the
indemnifying party shall not have the right to direct the defense of such
action on behalf of such indemnified party or parties and such indemnified
party or parties shall have the right to select separate counsel to defend
such action on behalf of such indemnified party or parties. After notice
from the indemnifying party to such indemnified party of its election so
to assume the defense thereof and approval by such indemnified party of
counsel appointed to defend such action in accordance with the foregoing,
the indemnifying party will not be liable to such indemnified party under
this Section 8 for any legal or other expenses, other than reasonable
costs of investigation, subsequently incurred by such indemnified party in
connection with the defense thereof, unless (1) the indemnified party
shall have employed separate counsel in accordance with the proviso to the
next preceding sentence (it being understood, however, that in connection
with such action the indemnifying party shall not be liable for the
expenses of more than (i) one separate counsel for all such actions, and
(ii) one local counsel in each jurisdiction in which such actions are
pending or threatened, all of which counsel shall be designated by you in
the case of indemnification under paragraph (a) of this Section 8,
representing the indemnified parties under such paragraph (a) who are
parties to such action or actions) or (2) the indemnifying party does not
promptly retain counsel reasonably satisfactory to the indemnified party
or (3) the indemnifying party has authorized the employment of counsel for
the indemnified party at the expense of the indemnifying party. No
indemnifying party or indemnified party shall, without the prior written
consent of the other indemnifying or indemnified parties (which consent
shall not be unreasonably withheld), settle or compromise or consent to
the entry of any judgment in any pending or threatened claim, action, suit
or proceeding in respect of which indemnification may be sought hereunder
(whether or not any such person is a party to such claim, action, suit or
proceeding), unless (A) such settlement, compromise or consent includes an
unconditional release of all of the non-consenting parties from all
liability arising out of such claim, action, suit or proceeding and (B)
the entire settlement amount and all costs of settlement and all related
costs are borne by persons other than the non-consenting persons; provided
that with respect to indemnification under paragraph (a) of this Section
8, such consent will not be required if (i) in the indemnified party's
reasonable judgment the indemnifying party does not have the financial
ability and the intent
22
23
to satisfy its indemnification obligations described in this Section 8,
and (ii) the indemnified party notifies the indemnifying party in writing
at least 10 business days before it settles, compromises or consents to
the entry of any judgment in any such pending or threatened claim, action,
suit or proceeding.
(d) If the indemnity agreement provided for in the preceding
paragraphs of this Section 8 is unavailable or insufficient, for any
reason, to hold harmless an indemnified party in respect of any losses,
claims, damages or liabilities (or actions in respect thereof), each
indemnifying party, in order to provide for just and equitable
contribution, shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or
liabilities (or actions in respect thereof) in such proportion as is
appropriate to reflect (1) the relative benefits received by the
indemnifying party or parties on the one hand and the indemnified party on
the other from the offering of the Shares or (2) if the allocation
provided by the foregoing clause (1) is not permitted by applicable law,
not only such relative benefits but also the relative fault of the
indemnifying party or parties, on the one hand, and the indemnified party,
on the other hand, in connection with the statements or omissions or
alleged statements or omissions that resulted in such losses, claims,
damages or liabilities (or actions in respect thereof), as well as any
other relevant equitable considerations. The relative benefits received by
the Company, on the one hand, and the Underwriters, on the other hand,
shall be deemed to be in the same proportion as the total proceeds from
the offering (before deducting expenses) received by the Company bear to
the total underwriting discounts and commissions received by the
Underwriters, in each case as set forth on the cover page of the
Prospectus. The relative fault of the parties shall be determined by
reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Company or the
Underwriters (but only if, in the case of the Underwriters, such
statements or omissions were made in reliance upon, and in conformity
with, written information furnished to the Company by such Underwriters
expressly for use therein), the parties' relative intents, knowledge,
access to information and opportunity to correct or prevent such statement
or omission, and any other equitable considerations appropriate in the
circumstances. The Company and the Underwriters agree that it would not be
equitable if the amount of such contribution were determined by pro rata
or per capita allocation (even if the Underwriters were treated as one
entity for such purpose) or by any other method of allocation that does
not take into account the equitable considerations referred to above in
this paragraph (d). Notwithstanding any other provision of this paragraph
(d), no Underwriter shall be obligated to make contributions under this
paragraph (d) that in the aggregate exceed the total public offering price
of the securities purchased by such Underwriter under this Agreement, less
the aggregate amount of any damages that such Underwriter has otherwise
been required to pay in respect of such untrue or alleged untrue statement
or omission or alleged omission, and no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities
Act) shall be entitled to contribution from any person who was not guilty
of such fraudulent misrepresentation. The Underwriters' obligations to
contribute under this paragraph (d) are individual in
23
24
proportion to their respective underwriting obligations and not joint. For
purposes of this paragraph (d), each person, if any, who controls an
Underwriter within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act shall have the same rights to contribution
as such Underwriter, and each director of the Company, each officer of the
Company who signed the Registration Statement and each person, if any, who
controls the Company within the meaning of Section 15 of the Securities
Act or Section 20 of the Exchange Act, shall have the same rights to
contribution as the Company.
9. Default of Underwriters. If any one or more of the Underwriters shall
fail or refuse to purchase the Firm Shares which it or they have agreed to
purchase under this Agreement and the aggregate principal amount of Firm Shares
which such defaulting Underwriter or Underwriters agreed but failed or refused
to purchase is not more than one-tenth of the total principal amount of Firm
Shares, each non-defaulting Underwriter shall be obligated severally, in the
proportion which the principal amount of Firm Shares set forth opposite its name
in Schedule 2 bears to the total principal amount of Firm Shares which all
non-defaulting Underwriters have agreed to purchase, or in such other proportion
as you may specify, to purchase the Firm Shares which such defaulting
Underwriter or Underwriters agreed but failed or refused to purchase; provided
that in no event shall the principal amount of Firm Shares which any Underwriter
has agreed to purchase pursuant to Section 3 be increased pursuant to this
Section 9 by an amount in excess of one-ninth of such principal amount of Firm
Shares without the written consent of such Underwriter. If any one or more of
the Underwriters shall fail or refuse to purchase Firm Shares or Option Shares
under this Agreement and the principal amount of Firm Shares with respect to
which such default occurs is more than one-tenth of the total amount of Firm
Shares, and if arrangements satisfactory to you are not made within 36 hours
after such default for the purchase by other persons (who may include the
non-defaulting Underwriters) of the Shares with respect to which such default
occurs, this Agreement will terminate without liability on the part of any
nondefaulting Underwriters or the Company other than as provided in Section 10
of this Agreement. In any such case which does not result in the termination of
this Agreement, you shall have the right to postpone the Firm Closing Date or
the Option Closing Date, as the case may be, established as provided in Section
3 of this Agreement for not more than seven business days in order that any
necessary changes may be made in the Registration Statement, the Prospectus, the
other documents and the arrangements for the purchase and delivery of the Firm
Shares or Option Shares, as the case may be. As used in this Agreement, the term
"Underwriter" includes any person substituted for an Underwriter under this
Section 9. Nothing herein shall relieve any defaulting Underwriter from
liability for its default.
10. Survival. The respective representations, warranties, agreements,
covenants, indemnities, contribution agreements and other statements of the
Company and the several Underwriters set forth in this Agreement or made by or
on behalf of them, respectively, pursuant to this Agreement shall remain in full
force and effect, regardless of (a) any investigation made by or on behalf of
the Company, any of its officers or directors, any Underwriter or any
controlling person referred to in Section 8 of this Agreement and (b) delivery
of and payment for the Shares. The respective agreements, covenants,
indemnities, limitations on liability and other statements set forth
24
25
in Sections 6, 8, 9 and 11 of this Agreement shall remain in full force and
effect, regardless of any termination or cancellation of this Agreement.
11. Termination.
(a) This Agreement may be terminated with respect to the Firm Shares
or any Option Shares in your sole discretion by notice to the Company
given prior to the Firm Closing Date or the related Option Closing Date,
respectively, in the event that the Company shall have failed, refused or
been unable to perform all obligations on its part to be performed under
this Agreement on or before the Firm Closing Date or the Option Closing
Date, as applicable, or if any of the conditions in Section 7 shall not
have been fulfilled when and as required by this Agreement to be fulfilled
at or prior to the Firm Closing Date or such Option Closing Date,
respectively:
(1) the Company and the Banks, taken as a whole, shall have,
in your reasonable judgment, sustained any Material Adverse Change,
including any loss or interference with their respective businesses
or properties from fire, flood, hurricane, accident or other
calamity, or from any labor dispute or any legal or governmental
proceeding, to the extent resulting, in your reasonable judgment, in
a Material Adverse Change, or any adverse change, or any development
involving a prospective adverse change (including without limitation
a change in management or control of the Company), in the condition
(financial or otherwise), management, business, net worth, cash
flows or results of operations of the Company and the Banks, taken
as a whole, to the extent resulting, in your reasonable judgment, in
a Material Adverse Change, except in each case as described in or
contemplated by the Registration Statement and the Prospectus
(exclusive of any amendment or supplement thereto);
(2) trading in the Common Stock shall have been suspended by
the Commission or trading in securities generally on the New York
Stock Exchange, the American Stock Exchange or the over-the-counter
market shall have been suspended, or minimum or maximum prices shall
have been established on such exchange or market;
(3) a banking moratorium shall have been declared by federal,
Michigan or New York authorities;
(4) the FIB Orders, the FDIC Order, or the Federal Reserve
Board Approval shall have been withdrawn or materially altered, or
notice shall have been received to the effect that any of such
approvals will not be received, or, if received, will be subject to
conditions that the Company would not be able to fulfill in a
reasonable time in the Representative's reasonable opinion;
25
26
(5) there shall have been (A) an outbreak or major extension
of hostilities between the United States and any foreign power, (B)
an outbreak or major extension of any other insurrection or armed
conflict involving the United States or (C) any other calamity or
crisis or material adverse change in the general economic, political
or financial conditions so disrupting the U.S. financial markets
that, in your reasonable judgment, makes it impractical or
inadvisable to proceed with the public offering or the delivery of
the Shares as contemplated by the Registration Statement, as amended
as of the date of this Agreement;
(6) there shall have been enacted, published, decreed or
promulgated any federal, state or local statute, regulation, rule or
order of any court or other governmental authority which in your
reasonable judgment materially and adversely affects or is
reasonably likely to materially and adversely affect the business or
operations of the Company; or
(7) any actions shall have been taken by any federal, state or
local government or agency in respect of its monetary or fiscal
affairs which in your reasonable judgment has a material adverse
effect on the securities markets in the United States that, in your
reasonable judgment, makes it impractical or inadvisable to proceed
with the public offering or the delivery of the Shares as
contemplated by the Registration Statement, as amended as of the
date of this Agreement.
(b) Termination of this Agreement pursuant to this Section 11 shall
be without liability of any party to any other party except as provided in
Section 6 and Section 8 of this Agreement.
12. Information Supplied by Underwriters. The statements set forth in the
last paragraph on the front cover page and under the heading "Underwriting" in
any Preliminary Prospectus or the Prospectus (to the extent such statements
relate to the Underwriters) constitute the only information furnished by any
Underwriter to the Company for the purposes of the last sentence of Section 2(b)
and of Section 8 of this Agreement. The Underwriters confirm that such
statements (to such extent) are correct.
13. Notices. All notices and communications under this Agreement shall be
in writing and, if sent to you or the Underwriters, shall be delivered or sent
by mail, telex or facsimile transmission and confirmed in writing to Fifth
Third/The Ohio Company, 000 Xxxx Xxxxx Xxxxxx, Xxxxxxxx, Xxxx 00000, Attention:
Xxxxxx X. Xxxxxx (with a copy to Xxxxxx Xxxxxxx PLLC, 000 Xxxxxxxxxxx Xxxxxx,
Xxxxxxx, Xxxxxxxx 00000, Attention: Xxxx X. Xxxxxxxxxx); and if sent to the
Company, shall be delivered or sent by mail, telex or facsimile transmission and
confirmed in writing to the Company at 00000 Xxxx Xxxx, Xxxxxxxx Xxxxxxx,
Xxxxxxxx 00000, Attention: Chief Executive Officer (with a copy to Butzel Long,
000 X. Xxxxxxxxx, #000, Xxxxxxx, Xxxxxxxx 00000, Attention: Xxxxxx X. Xxxxxx).
00
00
00. Successors. This Agreement shall inure to the benefit of and shall be
binding upon the Underwriters and the Company, and their respective successors,
assigns and legal representatives, and nothing expressed or mentioned in this
Agreement is intended or shall be construed to give any other person any legal
or equitable right, remedy or claim under or in respect of this Agreement, or
any provisions contained in this Agreement, this Agreement and all conditions
and provisions of this Agreement being intended to be and being for the sole and
exclusive benefit of such persons and for the benefit of no other person except
that (a) the indemnities of the Company contained in Section 8 of this Agreement
shall also be for the benefit of the Indemnitees, including, without limitation,
any person or persons who control any Underwriter within the meaning of Section
15 of the Securities Act or Section 20 of the Exchange Act, and (b) the
indemnities of the Underwriters contained in Section 8 of this Agreement shall
also be for the benefit of the directors of the Company, the officers of the
Company who have signed the Registration Statement and any person or persons who
control the Company within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act. No purchaser of Shares from any Underwriter
shall be deemed a successor because of such purchase.
15. Applicable Law. The validity and interpretation of this Agreement, and
the terms and conditions set forth in this Agreement, shall be governed by and
construed in accordance with the laws of the State of Michigan, without giving
effect to any provisions relating to conflicts of laws.
16. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
17. Entire Agreement. This Agreement and the Letter of Intent provisions
which are incorporated in this Agreement are the parties' entire agreement
concerning its subject matter, and supersede all prior undertakings and
agreements.
[Signature Page on Next Page]
27
28
If the foregoing correctly sets forth our understanding, please indicate
your acceptance of this Agreement in the space provided below for that purpose,
whereupon this letter shall constitute an agreement binding the Company and each
of the Underwriters.
Very truly yours,
MICHIGAN COMMUNITY BANCORP LIMITED
By:
-----------------------------------------
Xxxxx XxXxxxxx, Chairman and President
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
FIFTH THIRD/THE OHIO COMPANY,
Acting on behalf of itself and as the
Representative of the other Underwriters
named in Schedule 1 attached hereto.
By:
----------------------------------
Xxxxxx X. Xxxxxx
Senior Vice President
28
29
SCHEDULE 1
Number of
Firm Shares
Underwriter to be Purchased
----------- ---------------
Fifth Third/The Ohio Company
---------
TOTAL 1,000,000
=========
29
