Draft: 3/3/98
1,000,000 SHARES
DEARBORN BANCORP, INC.
COMMON STOCK
UNDERWRITING AGREEMENT
___________, 1998
XXXXX & CO., L.L.C.
Xxx Xxxxxxxx
Xxxxxxx, Xxxxxxxx 00000
Dear Sirs:
The undersigned, Dearborn Bancorp, Inc., a Michigan corporation (the
"Company"), hereby confirms its agreement with you as follows:
1. Introduction. The Company proposes to issue and sell to Xxxxx &
Co., L.L.C. ("Xxxxx & Co.") 1,000,000 shares of Common Stock (the "Common
Stock"), of the Company. In addition, solely for the purpose of covering
over-allotments, the Company proposes to grant to Xxxxx & Co. the option to
purchase an additional 150,000 shares of Common Stock. The shares of Common
Stock to be sold by the Company subject to the over-allotment option are
herein called the "Additional Stock." The Common Stock to be sold by the
Company, excluding the Additional Stock, is herein called the "Firm Stock,"
and the Firm Stock and the Additional Stock are sometimes collectively
referred to herein as the "Stock." The Stock is more fully described in the
Prospectus referred to below.
2. Representations and Warranties of the Company.
The Company represents and warrants to Xxxxx & Co. that:
(a) The Company has filed with the Securities and Exchange
Commission (the "Commission") a registration statement, and an
amendment or amendments thereto, on Form SB-2 (Registration No.
333-______), including any related preliminary prospectus
("Preliminary Prospectus"), for the registration of the Stock under
the Securities Act of 1933, as amended (the "Act"). The Company
meets all of the requirements for registering the Stock with the
Commission on a registration statement on Form SB-2. The Company
expects to file on or prior to the effective date of this Agreement
an amendment to said registration statement in the form heretofore
delivered to you and will not, before the registration statement
becomes effective, file any other amendment thereto to which you
shall reasonably object in writing after being furnished with a copy
thereof. Except as
the context may otherwise require, such registration statement, as
amended, on file with the Commission at the time the registration
statement becomes effective (including the prospectus, financial
statements, schedules, exhibits, and all other documents
incorporated by reference therein or filed as a part thereof) is
herein called the "Registration Statement," and the prospectus, in
the form filed with the Commission pursuant to Rule 424(b) of the
General Rules and Regulations of the Commission under the Act (the
"Regulations"), is herein called the "Prospectus." The term
"Preliminary Prospectus" means each prospectus included in such
registration statement, or amendments thereof, before it becomes
effective under the Act and any prospectus filed by the Company with
the consent of Xxxxx & Co. pursuant to Rule 424(a) of the
Regulations. Reference made herein to any Preliminary Prospectus or
to the Prospectus shall be deemed to refer to and include any
documents incorporated by reference therein and any document
attached as an exhibit thereto, as of the date of such Preliminary
Prospectus or the Prospectus, as the case may be.
(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 Act and the Regulations, and
conformed in all material respects with the requirements of the Act
and the Regulations, 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;
provided that the documents attached thereto as an exhibit are
subject to subparagraph (e), below. 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. The Commission has not issued any order
suspending or preventing the use of any Preliminary Prospectus. The
Registration Statement at the time it becomes effective and the
Prospectus at the time it is filed or mailed for filing with the
Commission pursuant to Rule 424(b) of the Regulations and on the
Closing Date as defined herein, as then amended or supplemented,
will contain all material statements which are required to be stated
therein, respectively, in accordance with the Act and the
Regulations and will conform to the requirements of the Act and the
Regulations, and the Registration Statement and the Prospectus will
not, on such dates (as then amended or supplemented), 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; provided, however, that no
representations or warranties under this paragraph (b) are made with
respect to statements or omissions made in reliance upon and in
conformity with written information furnished to the Company by you
with respect to Xxxxx & Co. expressly for use in connection with any
Preliminary Prospectus, the Registration Statement or Prospectus, or
any amendment thereof or supplement thereto.
(c) The Company and its subsidiary, Community Bank of
Dearborn, a Michigan banking corporation (the "Subsidiary"), have
good and marketable title in fee simple to, or valid and enforceable
leasehold estates in, all items of real and personal
2
property which are stated in the Registration Statement and
Prospectus to be owned or leased by them, in each case free and
clear of all liens, encumbrances, claims, security interests and
defects, other than those which are referred to in the Registration
Statement and the Prospectus and other than those which do not have
a material adverse effect on the business, condition or prospects of
the Company and the Subsidiary, taken as a whole.
(d) There is no litigation or governmental proceeding
pending or threatened against, or involving the assets, properties
or business of, or the franchises, permits, grants, approvals,
orders, or licenses of, the Company or the Subsidiary which might in
the aggregate materially and adversely affect the value or the
operations of any such properties, business or assets of the Company
and the Subsidiary, taken as a whole, except as referred to in the
Registration Statement and the Prospectus.
(e) The documents incorporated by reference in the
Registration Statement and the Prospectus, when they were filed with
the Commission, conformed in all material respects to the
requirements of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), and the rules and regulations of the Commission
thereunder, and none of such documents contained or, except as
modified or superseded by the Prospectus, contains an untrue
statement of a material fact or omitted or, except as modified or
superseded by the Prospectus, omits or will omit to state a material
fact therein or necessary to make the statements therein not
misleading.
(f) Except as otherwise disclosed in the notes thereto or
the reports thereon, the combined consolidated financial statements
and related schedules of the Company and its Subsidiary included in
the Registration Statement and Prospectus fairly present the
financial position and the consolidated results of operations of the
Company and its Subsidiary at the respective dates and for the
respective periods to which they apply; and such financial
statements and related schedules have been prepared in conformity
with generally accepted accounting principals, consistently applied
throughout the periods involved.
(g) Xxxxx Xxxxxxxx LLP, whose reports with respect to the
Company and its Subsidiary are filed with the Commission as a part
of the Registration Statement and the Prospectus, are independent
certified public accountants as required by the Act and the
Regulations.
(h) The Company has been duly organized and is validly
existing as a corporation in good standing under the laws of the
State of Michigan and the Subsidiary has been duly incorporated and
is validly existing as a banking corporation in good standing under
the laws of the State of Michigan. The Company owns, directly or
indirectly, all of the outstanding capital stock of the Subsidiary
and all such shares of stock so owned are validly issued and
outstanding, fully paid and nonassessable and are owned free and
clear of any liens, encumbrances or other restrictions. The Company
and the Subsidiary have been duly qualified as foreign corporations
for the transaction of business and are in good standing under the
laws of each other jurisdiction in which they
3
are required to be qualified, in light of the character or location
of their properties (owned or leased) or the nature of their
businesses, except for such jurisdictions where the failure to so
qualify does or would not subject the Company or the Subsidiary to
any material liability or disability as a result thereof. The
Company and the Subsidiary have all requisite corporate power and
authority, and all necessary authorizations, consents, approvals,
orders, licenses, grants, certificates, and permits of and from all
governmental regulatory officials and bodies, to own their
properties and to conduct their businesses as described in the
Prospectus, or are subject to no material liability or disability by
reason of the failure to have any such authorization, consent,
approval, order, license, grant, certificate or permit, and the
Company has all such power, authority, authorizations, consents,
approvals, orders, licenses, certificates, and permits appropriate
or desirable to enter into this Agreement and to carry out the
provisions and conditions hereof and the transactions contemplated
hereby. The Company and the Subsidiary own, or possess adequate
rights to use, all patents, trademarks, service marks, copyrights,
trademarks, trade secrets and rights necessary for the conduct of
their businesses as described in the Prospectus and none of them has
received any notice and is not otherwise aware of any conflict with
the asserted rights of others, and the Company knows no basis
therefor. The Company has no directly or indirectly held subsidiary
other than the Subsidiary.
(i) There has been no material adverse change in the
condition, prospects or business of the Company and the Subsidiary
taken as a whole, financial or otherwise, from that on the latest
dates as of which such condition, prospect or business is set forth
in the Registration Statement and the Prospectus except as referred
to therein; and the capitalization, prospects and the business of
the Company conform to the descriptions thereof contained in the
Registration Statement and Prospectus.
(j) No material default exists, and no event has occurred
which, with notice or lapse of time, or both, would constitute a
material default or result in an acceleration in the due performance
and observance of any material term, covenant or condition of any
indenture, mortgage, deed of trust, note, bank loan or credit
agreement or any other agreement, understanding or instrument to
which the Company or the Subsidiary is a party or by which any of
them or any of their properties may be bound or affected (which
breach or default would have a material adverse effect on the
Company or its Subsidiary or on the transactions contemplated
hereby).
(k) Neither the Company nor the Subsidiary is in violation
of any term or provision of its articles of incorporation or bylaws,
or in violation of any franchise, license, grant, permit, judgment,
decree, order, statute, rule or regulation, which violation would
have a material adverse effect on the Company or the Subsidiary or
on the transactions contemplated hereby.
(l) Neither the execution and delivery of this Agreement,
the consummation of the transactions herein contemplated, nor
compliance with the terms and provisions hereof, will conflict with,
result in a material breach of, or constitute a default under any
4
of the terms, provisions or conditions of, the articles of
incorporation or bylaws of the Company or the articles of
incorporation or bylaws of the Subsidiary or any material agreement
or instrument to which any of them is a party or by which any of
them is bound or violate any franchise, license, permit, grant,
judgment, decree, order, statute, rule or regulation of any
government, governmental instrumentality or court.
(m) The Company has authorized capital stock as set forth
in the Prospectus. No shares of preferred stock of the Company are
issued and outstanding. All of the issued shares of Common Stock of
the Company are duly and validly authorized, issued and outstanding,
fully paid and nonassessable, and free of preemptive rights, and the
Stock, when issued and delivered in accordance with this Agreement,
will be duly and validly authorized, issued and outstanding, fully
paid and nonassessable, and free of preemptive rights. The Company's
Common Stock and other securities conform to all statements in
relation thereto contained in the Registration Statement and
Prospectus.
(n) Subsequent to the respective dates as of which
information is given in the Registration Statement and the
Prospectus, and except as may otherwise be indicated or contemplated
herein or therein, neither the Company nor the Subsidiary, has (i)
issued any securities or incurred any liability or obligation,
direct or contingent, for borrowed money, other than in the ordinary
course of business, (ii) entered into any transaction not in the
ordinary course of business, (iii) entered into any transaction with
an affiliate of the Company required to be disclosed in the
Registration Statement, or (iv) declared or paid any dividend on its
shares of Common Stock.
(o) The Company has obtained from all of its officers,
directors and holders of 5% or more of the Company's Common Stock
their written agreement that for a period of 150 days from the date
of the Prospectus they will not, without your prior written consent,
sell, contract to sell or grant any option for the sale of or
otherwise dispose of, directly or indirectly, of any shares of
Common Stock of the Company (or any securities convertible into or
exercisable for such shares of Common Stock) owned by them, except
as provided herein or in the Registration Statement, and except for
bona fide gifts to persons who agree in writing with you to be bound
by this clause.
(p) No person holds a right (which has not been waived, in
writing), to (i) require or participate in the registration under
the Act of the Stock to be affected by the Registration Statement,
or (ii) require any other registration statement to be filed in
connection with any capital stock of the Company within 150 days
from the date of the Prospectus without your prior written consent.
(q) This Agreement has been duly and validly authorized,
executed and delivered by the Company.
5
(r) Neither the Company nor the Subsidiary is involved in
any labor dispute which would have a material adverse effect on the
Company or the Subsidiary or on the transactions contemplated
hereby, and no such dispute is threatened.
(s) The Company and the Subsidiary have filed all Federal,
state, local and foreign tax returns which are required to be filed
by any of them or have requested extensions thereof and have paid
all taxes shown on such returns and all assessments received by any
of them to the extent that the same have become due.
(t) Except for the order of the Commission declaring the
Registration Statement effective and permits and similar
authorizations required under the securities or Blue Sky laws of
certain jurisdictions, no consent, authorization, or approval is
required from any Federal, state or local governmental agency or
body in connection with this Agreement and the transactions
contemplated hereby other than such consents, authorizations or
approvals as have been obtained.
(u) Neither the Company, its Subsidiary nor any officer,
director or employee of the Company or its Subsidiary has made any
payment of funds of the Company or its Subsidiary or purchased any
property with funds of the Company or its Subsidiary in a manner
prohibited by law, and no funds of the Company or its Subsidiary or
property purchased with funds of the Company or its Subsidiary have
been set aside to be used for any payment prohibited by law.
(v) The Company has made an application to list the Stock
on the Nasdaq SmallCap Market (the "Market") and the Company has
reasonable assurance from the Market that such Common Stock,
including without limitation the Stock, will be approved for listing
thereon.
(w) Neither the Company nor the Subsidiary 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
Company's Common Stock in order to facilitate the sale or resale of
the Stock.
(x) Neither the Company nor the Subsidiary owns any shares
of stock or any securities of any corporation or has any equity
interest in any firm, partnership, association or other entity
except as referred to in the Registration Statement and the
Prospectus.
(y) The Company has filed all reports, proxy statements and
other information, and all amendments to previously filed reports,
proxy statements and other information, required to be filed by it
pursuant to Sections 13, 14 or 15(d) of the Exchange Act.
6
(z) 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.
3. Purchase, Sale and Delivery of the Stock. On the basis of the
representations and warranties herein contained, but subject to the terms and
conditions herein set forth, the Company agrees to sell to Xxxxx & Co., and
Xxxxx & Co. agrees to purchase from the Company, the Firm Stock at the
purchase price of $_______ per share, except as set forth in the next
paragraph.
On the basis of the representations and warranties herein contained,
but subject to the terms and conditions herein set forth, the policies of the
National Association of Securities Dealers, Inc. (the "NASD"), and pursuant
to directions from the Company, Xxxxx & Co. will offer to sell to each of the
persons listed on Exhibit A (who may purchase alone or with family members to
the extent permitted by the Free-Riding and Withholding Interpretation (the
"Interpretation") under the Rules of Fair Practice of the NASD) the number of
shares of Common Stock set forth opposite their respective names on Exhibit
A. To the extent such persons (alone or with such family members) offer to
buy such shares of Common Stock, Xxxxx & Co. agrees to purchase up to
_____________ of such shares of Common Stock at a purchase of $________ per
share. The parties agree that the securities purchased and sold under this
paragraph shall constitute "issuer directed securities" sold to the issuer's
employees or directors or other persons under the Interpretation.
Payment for the Firm Stock shall be made by [certified or official
bank check payable in Detroit Clearing House (next day) funds,] to the
Company at the offices of Xxxxxxxx Xxxxxx Xxxxxxxx and Xxxx, 0000 Xxxxx
Xxxxxxxx Xxxxxxxx, Xxxxxxx, Xxxxxxxx 00000 or at such other place as shall be
agreed upon among us, upon delivery of the Firm Stock to you for the account
of Xxxxx & Co. Such delivery and payments shall be made at 10:00 A.M.,
Detroit Time, on the third business day following the commencement of the
initial public offering of the Stock or at such other time as shall be agreed
upon among us. The hour and date of such delivery and payment are herein
called the "Closing Date."
Certificates for the Firm Stock shall be registered in such name or
names and in such authorized denominations as you may request in writing at
least two full business days prior to the Closing Date. The Company will make
said certificates available to you at the place of closing (or at such other
place as shall be acceptable to you), for examination and packaging at least
one full business day prior to the Closing Date.
In addition, on the basis of the representations and warranties
herein contained, but subject to the terms and conditions herein set forth,
the Company grants to Xxxxx & Co. the options to purchase up to 150,000
shares of the Additional Stock as may be necessary to cover over-allotments,
at the same purchase prices to be paid by Xxxxx & Co. to the Company for the
Firm Stock as set forth in the first paragraph of this Section 3. These
options may be exercised at any time (but not more than once) on or before
the thirtieth day following the effective date
7
of the Registration Statement by written notice by you to the Company. Such
notice shall set forth the aggregate number of shares of Additional Stock as
to which the options are being exercised, the name or names in which the
shares of Additional Stock are to be registered, the denominations in which
the Additional Stock are to be issued, and the date and time, as reasonably
determined by you, when the Additional Stock is to be delivered (such date
and time being herein sometimes referred to as the "Additional Closing
Date"); provided, however, that the Additional Closing Date shall not be
earlier than the Closing Date nor earlier than the second business day after
the date on which the option shall have been exercised nor later than the
eighth business day after the day on which the option shall have been
exercised.
Payment for the Additional Stock shall be made by [certified or
official bank check payable in Detroit Clearing House (next day) funds] to
the Company at the offices of Xxxxxxxx Xxxxxx Xxxxxxxx and Xxxx, 0000 Xxxxx
Xxxxxxxx Xxxxxxxx, Xxxxxxx, Xxxxxxxx 00000, or at such other place as shall
be agreed upon among us, upon delivery of the Additional Stock to you.
Certificates for the Additional Stock shall be registered in such
name or names and in such authorized denominations as you may request in
writing at least two full business days prior to the Additional Closing Date.
The Company will make said certificates available to you at the place of such
additional closing (or at such other place as shall be acceptable to you),
for examination and packaging, at least one full business day prior to the
Additional Closing Date.
The Company shall not be obligated to sell or deliver any shares of
Firm Stock or Additional Stock except upon tender of payment by you for all
the Firm Stock or Additional Stock, as the case may be, agreed to be
purchased by you hereunder.
4. Offering. Xxxxx & Co. is to make a public offering of the Stock
as soon, on or after the effective date of the Registration Statement, as you
deem it advisable so to do. The Stock is to be initially offered to the
public at the initial public offering prices set forth on the cover page of
the Prospectus (such prices being herein called the "public offering
prices"). You may from time to time increase or decrease the public offering
prices after the initial public offering to such extent as you may determine.
5. Covenants of the Company.
The Company covenants that it will:
(a) Use every reasonable effort to cause the Registration
Statement to become effective and will notify you immediately, and
confirm the notice in writing, (i) when the Registration Statement
and any post-effective amendment thereto becomes effective, (ii) of
the issuance by the Commission of any stop order or of the
initiation, or the threatening, of any proceedings for that purpose,
and (iii) of the receipt of any comments from the Commission. The
Company will make every reasonable effort to prevent the issuance of
a stop order, and, if the Commission shall enter a stop order at any
time, the Company
8
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 Act, comply so far as it is able with all
requirements imposed upon it by the Act, as now and hereafter
amended, and by the Regulations, as from time to time in force, so
far as necessary to permit the continuance of sales of or dealings
in the Stock in accordance with the provisions hereof and the
Prospectus. If at any time when a prospectus relating to the Stock
is required to be delivered under the Act any event shall have
occurred as a result of which, in the opinion of counsel for the
Company or counsel for Xxxxx & Co., the Registration Statement or
Prospectus as then amended or supplemented includes an untrue
statement of a material fact or omits to state any material fact
required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were
made, not misleading, or if it is necessary at any time to amend or
supplement the Registration Statement or Prospectus to comply with
the Act, the Company will notify you promptly and prepare and file
with the Commission an appropriate amendment or supplement in form
satisfactory to you. The cost of preparing, filing and delivering
copies of such amendment or supplement shall be paid by the Company,
unless such untrue statement or omission is made in reliance upon
and in conformity with the written information furnished to the
Company by you with respect to Xxxxx & Co. expressly for use in
connection with the Registration Statement or Prospectus.
(c) Deliver to Xxxxx & Co. such number of copies of each
Preliminary Prospectus as it may reasonably request and, as soon as
the Registration Statement, or any amendment or supplement thereto,
becomes effective, deliver to you one signed copy of the
Registration Statement, including exhibits, and all post-effective
amendments thereto and deliver to you such number of copies of the
Prospectus, the Registration Statement and supplements and
amendments thereto, if any, as you may reasonably request for the
purposes contemplated by the Act.
(d) Endeavor in good faith, in cooperation with you, at or
prior to the time the Registration Statement becomes effective, to
qualify the Stock for offering and sale under the securities laws
relating to the offering or sale of the Stock in such jurisdictions
as you may reasonably designate; provided that no such qualification
shall be required in any jurisdiction where, as a result thereof,
the Company would be subject to service of general process or
taxation or be required to qualify to do business as a foreign
corporation where it is not now so qualified. In each jurisdiction
where such qualification shall be affected, the Company will, unless
you agree that such action is not at the time necessary or
advisable, file and make statements or reports at such times as may
reasonably be required by the laws of such jurisdiction.
(e) Make generally available to its security holders as
soon as practicable, but not later than the first day of the
fifteenth full calendar month following the effective date of the
Registration Statement (as defined in Rule 158(c) of the
Regulations), an earning
9
statement of the Company (which need not be certified by independent
certified public accountants unless required by the Act or the
Regulations, but which shall satisfy the provisions of Section 11(a)
of the Act including, at the Company's option, Rule 158 of the
Regulations).
(f) For a period of 150 days after the date of the
Prospectus, not issue, sell, contract to sell, grant any option for
the sale of or otherwise dispose of, directly or indirectly, any
shares of Common Stock of the Company (or securities convertible
into or exercisable for such Common Stock) other than the Firm Stock
and Additional Stock (if applicable) being sold by the Company
without the prior written consent of Xxxxx & Co., other than options
and Common Stock granted and/or issued to officers, directors or
employees from time to time in the ordinary course of business
pursuant to employment agreements and stock option or stock bonus
plans currently in effect.
(g) For a period of five years from the effective date of
the Registration Statement furnish you with the following:
(i) as soon as practicable after they have been sent to
shareholders of the Company or filed with the Commission,
three copies of each annual and interim financial and other
report or communications sent by the Company to its
shareholders or filed with the Commission;
(ii) as soon as practicable, three copies of every press
release and every material news item and article in respect of
the Company or the affairs of the Company which was released
by the Company; and
(iii) such additional documents and information with
respect to the Company as you may from time to time reasonably
request, including without limitation, information to comply
with Rule 15c2-11 of the Rules and Section 4 of Schedule H of
the NASD By-laws, to the extent legally permissible.
(h) Apply the net proceeds from the offering received by it in
the manner set forth under "Use of Proceeds" in the Prospectus.
(i) Furnish to you as early as practicable prior to the
Closing Date, but not later than two full business days prior
thereto, a copy of the latest available unaudited interim
consolidated financial statements of the Company and its Subsidiary
which have been read by the Company's independent public accountants
as stated in their letters to be furnished pursuant to Section 7(f)
hereof.
(j) Not file any amendment or supplement to the Registration
Statement or Prospectus after the effective date of the Registration
Statement to which you shall reasonably object in writing after
being furnished a copy thereof.
10
(k) Use every reasonable effort to effect the listing of the
Common Stock, including, without limitation, the Firm Stock and the
Additional Stock, on the Market as promptly as practicable.
(l) Comply with all registration, filing and reporting
requirements of the Act or the Exchange Act which may from time to
time be applicable to the Company or its Subsidiary.
6. Payment of Expenses. The Company hereby agrees to pay all
expenses in connection with (i) the preparation, printing, filing and mailing
of the Registration Statement and the Prospectus and the printing and mailing
of this Agreement and related documents, including the cost of all copies
thereof and of the Preliminary Prospectus and of the Prospectus and any
amendments thereof or supplements thereto supplied to you in quantities as
hereinabove stated, (ii) the printing, engraving, issuance, transfer and
delivery of the Stock, including any transfer or other taxes payable thereon,
(iii) the qualification of the Stock under state securities or Blue Sky laws,
including the costs of printing and mailing the "Blue Sky Survey" and
disbursements and fees of counsel in connection therewith, (iv) the filing
fee payable to the NASD, and (v) the listing of the Firm Stock and the
Additional Stock on the Market. Notwithstanding anything to the contrary
contained above, upon completion of the offering, the Company shall not have
any obligation for the fees and disbursements of counsel for Xxxxx & Co. or
for any out-of-pocket expenses incurred by Xxxxx & Co. relating to the
Registration Statement, including but not limited to road shows, syndicate
expenses, sales literature and advertising. Xxxxx & Co. shall promptly
reimburse the Company for any amount paid or incurred by the Company in
connection with fees and disbursements of underwriter's counsel or
out-of-pocket expenses.
7. Conditions of Xxxxx & Co.'s Obligations. The obligations of
Xxxxx & Co. to purchase and pay for the Stock, as provided herein, shall be
subject to the continuing accuracy of the representations and warranties of
the Company as of the date hereof and as of the Closing Date, to the
performance by the Company of its obligations hereunder and to the following
conditions:
(a) The Registration Statement shall have become effective not
later than 5:00 P.M., Detroit Time, on the date of this Agreement or
such later date and time as shall be consented to in writing by you,
and, at the Closing Date, no stop order shall have been issued or
proceedings therefor initiated or threatened by the Commission.
(b) At the Closing Date, you shall have received the opinion
of Xxxxxxxxx Xxxxxx PLLC, counsel for the Company, dated the Closing
Date, addressed to Xxxxx & Co. and in form and scope reasonably
satisfactory to counsel for Xxxxx & Co., to the effect that:
(i) the Company (A) is a corporation organized and
validly existing as a corporation in good standing under the
laws of the State of Michigan, (B) has full corporate power
and authority to own its properties and to conduct its
business
11
as described in the Registration Statement and Prospectus, and
(C) has been qualified as a foreign corporation for the
transaction of business and is in good standing under the laws
of each other jurisdiction in which it owns or leases
properties, or conducts any business, where such qualification
is required, or is subject to no material liability or
disability by reason of failure to be so qualified in any such
jurisdiction.
(ii) the Subsidiary (A) is a banking corporation organized
and validly existing as a banking corporation in good standing
under the laws of the State of Michigan, (B) has full
corporate power and authority to own its properties and
conduct its business as described in the Registration
Statement and Prospectus, (C) has been qualified as a foreign
corporation for the transaction of business and is in good
standing under the laws of each other jurisdiction in which it
owns or leases properties, or conducts any business, where
such qualification is required, or is subject to no material
liability or disability by reason of failure to be so
qualified in any such jurisdiction, and (D) to the best of
such counsel's knowledge, the Company has no directly or
indirectly held subsidiary other than the Subsidiary;
(iii) the Company is the registered holder of all of the
outstanding capital stock of the Subsidiary as described in
the Prospectus and, to the best of such counsel's knowledge,
all such shares of stock so owned are validly issued and
outstanding, fully paid and nonassessable and are owned free
and clear of any liens, encumbrances or other claims or
restrictions whatsoever;
(iv) the Company has authorized and outstanding capital
stock as set forth in the Prospectus; all of the issued shares
of Common Stock, including without limitation the Stock (upon
receipt by the Company of full payment therefor), have been
duly and validly authorized and issued and are fully paid and
nonassessable and are not subject to preemptive rights; and
the Stock and any other capital stock of the Company conform
to the description thereof contained under the caption
"Description of Capital Stock" in the Registration Statement
and the Prospectus;
(v) the statements in the Registration Statement and the
Prospectus, insofar as they are descriptions of corporate
documents, stock option plans, contracts or agreements 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;
(vi) the certificates evidencing the Stock are in the form
approved by the Board of Directors of the Company and the
certificates evidencing the Stock comply with the articles of
incorporation and the bylaws of the Company and the laws of
the State of Michigan;
12
(vii) the Company is conveying to Xxxxx & Co. good and
valid title to the Stock that is issued in its name, free and
clear of any adverse claims, except to the extent that Xxxxx &
Co. has notice of any adverse claim;
(viii) this Agreement has been duly authorized, executed
and delivered by the Company, and is a valid and binding
agreement of the Company enforceable in accordance with its
terms;
(ix) there are, to the best of such counsel's knowledge,
(A) no contracts or other documents applicable to the Company
or the Subsidiary or to which the Company or the Subsidiary is
a party which are required to be filed as exhibits to the
Registration Statement other than those filed as exhibits
thereto, and (B) no legal or governmental proceedings pending
or threatened against, or involving the assets, properties or
business of, the Company or the Subsidiary, except as
disclosed and properly described in the Registration Statement
and Prospectus;
(x) the execution and delivery of this Agreement, the
consummation of the transactions herein contemplated and the
compliance with the terms and provisions hereof will not
conflict with or result in a breach of any of the material
terms and provisions or conditions of, or constitute a
material default (or an event which with notice or lapse of
time, or both, would constitute a material default or
acceleration) under, or result in the creation or imposition
of any lien, charge or encumbrance upon the Stock being sold
by the Company hereunder or any property or asset of the
Company pursuant to the terms of any agreement or instrument
known to such counsel (having made due inquiry with respect
thereto) to which the Company or the Subsidiary is a party or
by which the Company or the Subsidiary may be bound or to
which any of the properties or assets of the Company or the
Subsidiary is subject (which conflict, breach or default would
have a material adverse effect on the Company or the
Subsidiary or on the transactions contemplated hereby), nor
will such actions result in any violation of the provisions of
the articles of incorporation or bylaws of the Company or the
Subsidiary, or to the best of such counsel's knowledge, any
statute or any order, rule, or regulation applicable to the
Company or the Subsidiary of any court or of any Federal,
state, local or other regulatory authority or other
governmental body having jurisdiction over the Company or the
Subsidiary;
(xi) 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 or the Subsidiary in
connection with the execution and delivery of this Agreement
or the consummation of the transactions contemplated by this
Agreement, except the registration under the Act of the Stock
and such consents, approvals, authorizations, registrations or
qualifications as may be required under the Act or state
securities or Blue Sky laws;
13
(xii) to the best of such counsel's knowledge, (A) neither
the Company nor the Subsidiary is in breach of, or in default
(nor has an event occurred which, with notice or lapse of time
or both, would constitute a default or acceleration) under the
material terms and provisions or conditions of, any indenture,
mortgage, deed of trust, bank loan or credit agreement or any
other material agreement or instrument to which the Company or
the Subsidiary is a party or by which any of them or any of
their properties or assets may be bound or affected (which
breach or default would have a material adverse effect on the
Company and the Subsidiary or on the transactions contemplated
hereby); and (B) neither the Company nor the Subsidiary is in
violation of any term or provisions of its articles of
incorporation or bylaws, or of any franchise, license, grant,
permit, judgment, decree, order, statute, rule or regulation,
except as referred to in the Prospectus; and (C) neither the
Company nor the Subsidiary has received any notice of conflict
with the asserted rights of others in respect of patents,
trademarks, service marks, copyrights, trade names, trade
secrets and rights necessary for the conduct of any material
aspect of its business;
(xiii) the Registration Statement and the Prospectus and
any amendments or supplements thereto (other than the
financial statements, and other financial and statistical data
included therein, as to which no opinion need be rendered)
comply as to form in all material respects with the
requirements of the Act and the Regulations; and
(xiv) the Registration Statement is effective under the
Act, and, to the best of such counsel's knowledge, no
proceedings for a stop order are pending or threatened under
the Act.
In addition, such counsel shall state that, although such
counsel is not passing upon the accuracy, completeness or fairness
of the statements contained in the Registration Statement and
Prospectus (except to the extent stated in paragraph (x)), no facts
have come to the attention of such counsel that lead them to believe
that either the Registration Statement or any amendment thereto at
the time such Registration Statement or amendment became effective
contained an 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 that the Prospectus, as of
its date, or any supplement thereto, as of its date, contained an
untrue statement of a material fact or omitted to state a material
fact necessary in order to make the statements therein, in the light
of the circumstances under which they were made, not misleading (it
being understood that such counsel need express no view with respect
to the financial statements, schedules and other financial and
statistical data included therein).
Such opinion shall be to such further effect with respect
to other legal matters arising after the execution hereof relating
to this Agreement and the sale of the Stock hereunder as counsel for
you may reasonably request. In rendering the foregoing opinion,
14
such counsel may rely as to matters not governed by Federal law or
the laws of the State of Michigan on opinions of legal counsel
satisfactory to such counsel and upon which, in such counsel's
opinions, you are justified in relying, and as to matters of fact
upon certificates of public officials and officers of the Company.
Copies of all such opinions and certificates shall be furnished to
your counsel on the Closing Date. Such counsel's opinions may be
qualified to the extent that: (i) enforcement of any of the
documents mentioned therein may be limited by Title 11 of the United
States Code and other applicable bankruptcy, insolvency,
reorganization or other laws affecting or limiting the rights of
creditors (including, without limitation, laws pertaining to the
avoidance and/or recovery of preferences or fraudulent conveyances);
(ii) enforcement thereof may be subject to general principles of
equity (regardless of whether such enforceability is considered to
be in equity or at law); (iii) such counsel may express no opinion
as to any provisions purporting to obligate any party to pay
attorneys' fees or other costs of collection or relating to
indemnification against liabilities arising under Federal or state
securities laws; and (iv) the opinions of such counsel are not
intended and shall not be construed to be an opinion on choice of
law or conflicts of law, and such counsel may assume that the law of
the State of Michigan and the federal law of the United States shall
govern all matters which are the subject of this opinion.
(c) On or prior to the Closing Date, you shall have been
furnished such documents, certificates and opinions as you may
require for the purpose of enabling you to review the matters
referred to in subsection (b) of this Section 7, and in order to
evidence the accuracy, completeness or satisfaction of any of the
representations, warranties or conditions herein contained.
(d) Prior to the Closing Date, (i) there shall have been no
material adverse change in the condition or prospects or the
business activities, financial or otherwise, of the Company and the
Subsidiary from that as of the latest date as of which such
condition is set forth in the Registration Statement and Prospectus;
(ii) there shall have been no material transaction, not in the
ordinary course of business, entered into by the Company from the
latest date as of which the financial condition of the Company is
set forth in the Registration Statement and Prospectus, other than
transactions referred to or contemplated therein or to which you
have given your written consent; (iii) neither the Company nor the
Subsidiary shall be in default (nor shall an event have occurred
which, with notice or lapse of time, or both, would constitute a
default or acceleration) under any provision of any agreement,
understanding or instrument relating to any outstanding
indebtedness, which default could materially and adversely affect
the business, operations, prospects or financial condition or income
of the Company and the Subsidiary, taken as a whole; (iv) no
material amount of the assets of the Company and the Subsidiary
shall have been pledged or mortgaged, except as set forth in the
Registration Statement and Prospectus; (v) no action, suit or
proceeding, at law or in equity, shall have been pending or
threatened against the Company or the Subsidiary or affecting any of
their properties, assets or businesses before or by any court or
Federal, state or other commission, board or other administrative
agency having jurisdiction over the Company or the Subsidiary
15
wherein an unfavorable decision, ruling or finding could materially
adversely affect the business, operations, prospects or financial
condition or income of the Company and the Subsidiary, taken as a
whole, except as set forth in the Registration Statement and
Prospectus; (vi) neither the Company nor the Subsidiary shall have
been involved in any labor dispute nor, to the knowledge of the
Company, shall any dispute be threatened which could have a material
adverse effect on the Company and the Subsidiary, taken as a whole;
and (vii) no stop order shall have been issued under the Act with
respect to the Stock and no proceedings therefor shall have been
initiated or threatened by the Commission.
(e) At the Closing Date, you shall have received a
certificate of the President and the principal financial and
accounting officers of the Company, dated the Closing Date, to the
effect that the conditions set forth in subsection (d) above have
been satisfied and as to the accuracy, as of the Closing Date, of
the representations and warranties of the Company set forth in
Section 2 hereof.
(f) At the time this Agreement is executed and at the
Closing Date, you shall have received a letter, addressed to you and
in form and substance satisfactory to you in all respects (including
the non-material nature of the changes or decreases, if any,
referred to in clause (iii) below), from Xxxxx Xxxxxxxx LLP, dated
as of the date of this Agreement and as of the Closing Date:
(i) confirming that they are independent public
accountants with respect to the Company and its subsidiary
within the meaning of the Act and the applicable published
Regulations and stating that the answer to Item 10 of the
Registration Statement is correct insofar as it relates to
them;
(ii) stating that, in their opinion, the consolidated
financial statements and schedules of the Company audited
by them and the selected financial data to the extent
derived from financial statements examined by them included
in the Registration Statement comply as to form in all material
respects with the applicable accounting requirements of the
Act and the related published Regulations;
(iii) stating that, on the basis of procedures (but not an
examination made in accordance with generally accepted
auditing standards) which included a reading of the latest
available unaudited interim consolidated financial statements
of the Company and its subsidiary (with an indication of the
date of the latest available unaudited interim consolidated
financial statements), a reading of the latest available
minutes of the meetings of the shareholders and boards of
directors of the Company and its subsidiary and committees
of such boards and inquiries to certain officers and other
employees of the Company and its subsidiary responsible for
financial and accounting matters and other specified
procedures and inquiries, nothing has come to their attention
that would cause them to believe that (A) the unaudited
consolidated financial statements of the
16
Company and its subsidiary included in the Registration
Statement and Prospectus (i) do not comply as to form in all
material respects with the applicable accounting requirements
of the Act and the related published Regulations, or (ii) were
not fairly presented in conformity with generally accepted
accounting principles applied on a basis substantially
consistent with that of the audited consolidated financial
statements included in the Registration Statement and
Prospectus, (B) at a specified date not more than five
business days prior to the date of such letter, there was any
change in the capital stock long-term debt of the Company
or decrease in shareholders' equity of the Company and its
subsidiary as compared with the amounts shown on the
consolidated balance sheet of the Company included in the
Registration Statement and Prospectus, other than as set
forth in or contemplated by the Registration Statement and
Prospectus or, if there was any change or decrease, setting
forth the amount of such change or decrease, and (C) during
the period from January 1, 1998, to a specified date not more
than the five business days prior to the date of such letter,
there was any decrease in net interest income, net income or
income per share of the Company, as compared with the
corresponding period beginning January 1, 1997, other than as
set forth in or contemplated by the Registration Statement
and Prospectus, or, if there was any such decrease, setting
forth the amount of such decrease; and
(iv) stating that they have compared specific dollar
amounts, numbers of shares, percentages of revenues and
income and other financial information pertaining to the
Company set forth in the Prospectus, which have been specified
by you prior to the date of this Agreement, to the extent that
such amounts, numbers, percentages and information may be
derived from the general accounting records of the Company and
its subsidiary, and excluding any questions requiring an
interpretation by legal counsel, with the results obtained
from the application of specific readings, inquiries and other
appropriate procedures (which procedures do not constitute an
audit in accordance with generally accepted auditing
standards) set forth in the letter, and found them to be in
agreement.
(g) All proceedings taken in connection with the sale of
the Stock as herein contemplated shall be reasonably satisfactory in
form and substance to you and to counsel for you, and you shall have
received from said counsel for you a favorable opinion, dated as of
the Closing Date, with respect to such of the matters set forth
under subsection (b) of this Section 7, and with respect to such
other related matters arising after the date of execution hereof, as
you may reasonably require.
(h) There shall have been duly tendered to you certificates
representing all the Stock agreed to be sold by the Company on the
Closing Date.
(i) No order suspending the sale of the Stock prior to the
Closing Date in any jurisdiction designated by you pursuant to
subsection (d) of Section 5 hereof shall have
17
been issued on the Closing Date, and no proceedings for that purpose
shall have been instituted or to your knowledge or that of the
Company shall be contemplated.
(j) the NASD, upon review of the terms of the public
offering of the Stock, shall not as of the Closing Date have
objections with respect to the fairness and reasonableness of the
underwriting terms and arrangements.
Any certificate signed by the president or chief financial officer
of the Company and delivered to you or to counsel for you shall be deemed a
representation and warranty by the Company to you as to the statements made
therein. If any condition to your obligations hereunder to be fulfilled prior
to or at the Closing Date is not so fulfilled, you may terminate this
Agreement or, if you so elect, waive any such conditions which have not been
fulfilled or extend the time for their fulfillment.
8. Representations of Xxxxx & Co. Xxxxx & Co. represents and
warrants to the Company that the information furnished to the Company in
writing by it expressly for use in the Registration Statement or the
Prospectus does not, and any amendments thereof or supplements thereto thus
furnished will not contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading. The Company acknowledges that the
statements relating to the terms of the offering by Xxxxx & Co. in the ____
paragraph on the cover of, or under the caption "Underwriting" in, any
Preliminary Prospectus and the Prospectus constitute the only information
furnished in writing by or on behalf of Xxxxx & Co. for inclusion in any
Preliminary Prospectus and the Prospectus.
9. Indemnification.
(a) Subject to the conditions set forth below, the Company
agrees to indemnify and hold harmless Xxxxx & Co., and each person,
if any, who controls it within the meaning of Section 15 of the Act
or Section 20(a) of the Exchange Act, against any and all loss,
liability, claim, damage and expense whatsoever (including but not
limited to any and all expense whatsoever reasonably incurred in
investigating, preparing or defending against any litigation, or any
claim whatsoever) arising out of or based upon any untrue statement
or alleged untrue statement of a material fact contained (i) in any
Preliminary Prospectus, the Registration Statement or the Prospectus
(as from time to time amended and supplemented) or (ii) in any
application or other document (in this Section 9 collectively called
"application") 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 Stock under the securities laws
thereof or filed with the Commission, the Market or any securities
exchange, or the omission or alleged omission therefrom of a
material fact required to be stated therein or necessary to make the
statements therein not misleading; unless such statement or omission
was made in reliance upon and in conformity with written information
furnished to the Company with respect to Xxxxx & Co. by or on behalf
of it expressly for use in any Preliminary Prospectus, the
Registration
18
Statement or Prospectus, or any amendment or supplement thereof, or
in any application or in any communication to the Commission, as the
case may be. This indemnity agreement will be in addition to any
liability which the Company may otherwise have.
If any action or proceeding (including any governmental
investigation) is brought against Xxxxx & Co. or controlling person
in respect of which indemnity may be sought against the Company
pursuant to the foregoing paragraph, Xxxxx & Co. shall promptly
notify in writing the party or parties against whom indemnification
is to be sought of the institution of such action and the Company
shall assume the defense of such action, including the employment of
counsel (satisfactory to Xxxxx & Co. or such controlling person) and
payment of expenses. Xxxxx & Co. or such controlling person shall
have the right to employ its or their own counsel in any such case,
but the fees and expenses of such counsel shall be at the expense of
Xxxxx & Co. or such controlling person unless the employment of such
counsel shall have been authorized in writing by the Company in
connection with the defense of such action or the Company shall not
have employed counsel to have charge of the defense of such action,
or counsel for such indemnified party or parties shall have
reasonably concluded that there may be defenses available to it or
them which are different from or additional to those available to
the Company (in which case the Company shall not have the right to
direct the defense of such action on behalf of the indemnified party
or parties), in any of which events such fees and expenses shall be
borne by the Company (it being understood, however, that the Company
shall not, in connection with any one such action or proceeding, be
liable for the fees and expenses of more than one separate firm of
attorneys, together with appropriate local counsel, at any time for
all such indemnified parties, which firm shall be designated in
writing by you). Anything in this paragraph to the contrary
notwithstanding, the Company shall not be liable for any settlement
of any such claim or action effected without its written consent.
The Company agrees promptly to notify Xxxxx & Co. of the
commencement of any litigation or proceedings against the Company,
any of its officers or directors in connection with the issue and
sale of the Stock or in connection with such Preliminary Prospectus,
Registration Statement or Prospectus, or any amendment or supplement
thereof, or any such application.
(b) Xxxxx & Co. agrees to indemnify and hold harmless the
Company, each of the directors of the Company, each of the officers
of the Company who shall have signed the Registration Statement and
each other person, if any, who controls the Company within the
meaning of Section 15 of the Act or Section 20(a) of the Exchange
Act to the same extent as the foregoing indemnity from the Company
to Xxxxx & Co., but only with respect to statements or omissions, or
alleged statements or omissions, if any, made in any Preliminary
Prospectus, Registration Statement or Prospectus, or any amendment
or supplement thereto, or any application in reliance upon, and in
conformity with, written information furnished to the Company by you
by or on behalf of you expressly for use in any Preliminary
Prospectus, the Registration Statement or Prospectus or any
amendment or supplement thereto or in any application, as the case
may be. In case any action shall be brought against the Company, or
any other person so indemnified,
19
based on any Preliminary Prospectus, the Registration Statement or
Prospectus or any amendment or supplement thereto or any
application, and in respect of which indemnity may be sought against
Xxxxx & Co., Xxxxx & Co. shall have the rights and duties given to
the Company, and the Company, and each other person so indemnified
shall have the rights and duties given to Xxxxx & Co., by the
provisions of subsection (a) above. This indemnity will be in
addition to any liability which Xxxxx & Co. may otherwise have.
(c) If the indemnification provided for in this Section 9 is
unavailable to or insufficient to hold harmless an indemnified party
under subsection (a) or (b) 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 on the one hand and Xxxxx
& Co. on the other from the offering of the Stock. 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 on the
one hand and Xxxxx & Co. on the other in connection with the
statements or omissions which 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 Xxxxx & Co. 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 bear to the total underwriting discounts and commissions
received by Xxxxx & Co., in each case as set forth in the table on
the cover page of the Prospectus. The relative fault shall be
determined by reference to, among other things, whether the untrue
or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information
supplied by the Company on the one hand or Xxxxx & Co. on the other
and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission.
The Company and Xxxxx & Co. agree that it would not be just and
equitable if contribution pursuant to this subsection (c) were
determined by pro rata allocation or by any other method of
allocation which does not take account of the equitable
considerations referred to above in this subsection (c). 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 (c) 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 (c),
Xxxxx & Co. shall not be required to contribute any amount in excess
of the amount by which the total price at which the Stock
underwritten by it and distributed to the public was offered to the
public exceeds the amount of any damages which Xxxxx & Co. has
otherwise been required to pay by reason of such untrue or alleged
untrue statement or omission or alleged omission. No person guilty
of fraudulent misrepresentation (within the meaning of Section 11(f)
of the Act or Section
20
10(b) of the Exchange Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentations.
10. Representations and Agreements to Survive Delivery. Except as
the context otherwise requires, all representations, warranties and
agreements contained in this Agreement shall be deemed to be representations,
warranties and agreements at the Closing Date, and such representations,
warranties and agreements of Xxxxx & Co. and the Company, including the
indemnity and contribution agreements contained in Section 9 hereof, shall
remain operative and in full force and effect regardless of any investigation
made by or on behalf of Xxxxx & Co. or any controlling person, or by or on
behalf of the Company or any controlling person, and shall survive
termination of this Agreement and/or delivery of the Stock to Xxxxx & Co. In
addition, the covenants contained in Section 5 hereof, the agreements
contained in this Section 10 and in Sections 6, 11, 13 and 14 hereof and the
indemnity and contribution agreements contained in Section 9 hereof shall
survive termination of this Agreement, whether before or after the Closing
Date.
11. Effective Date of This Agreement and Termination Thereof.
(a) This Agreement shall become effective at the time of the
initial public offering by Xxxxx & Co. of the Stock. The time of the
initial public offering, for the purposes of this Section 11, shall
mean the time, after the Registration Statement becomes effective,
of the release by you for publication of the first newspaper
advertisement which is subsequently published relating to the Stock
or the time, after the Registration Statement becomes effective,
when the Stock is first released by you for offering by Xxxxx & Co.
or dealers by letter or facsimile, whichever shall first occur. You
or the Company may prevent this Agreement from becoming effective
without liability of any party to any other party, except as noted
below, by giving the notice indicated below in Section 11(c) before
the time this Agreement becomes effective.
(b) You shall have the right to terminate this Agreement at
any time prior to the Closing Date if: any domestic or international
event or act or occurrence has materially disrupted, or in your
opinion will in the immediate future materially disrupt, securities
markets; or 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 the United States shall have
become involved in a war or major hostilities; or if a banking
moratorium has been declared by a state or federal authority; or if
a moratorium in foreign exchange trading by major international
banks or persons has been declared; or if the Company shall have
sustained a material or substantial loss by fire, flood, accident,
hurricane, earthquake, theft, sabotage or other calamity or
malicious act which, whether or not said loss shall have been
insured, will in your opinion, make it inadvisable to proceed with
the delivery of the Stock; or if there shall have been such material
change in the condition, business operations or
21
prospects of the Company or the market for its and similar
securities as in your judgment would make it inadvisable to proceed
with the offering, sale and delivery of the Stock; or if the Company
shall have failed to comply with any of the provisions of this
Agreement on its part to be performed on or before the Closing Date;
or if any of the material conditions, agreements, representations or
warranties in this Agreement shall not have been fulfilled within
the respective times herein provided.
(c) If you elect to prevent this Agreement from becoming
effective or to terminate this Agreement as provided in this Section
11, the Company shall be notified promptly by you by telephone or
facsimile, confirmed by letter. If the Company elects to prevent
this Agreement from becoming effective, you shall be notified
promptly by the Company by telephone or facsimile, confirmed by
letter.
(d) If this Agreement is terminated pursuant to any of its
provisions, except as otherwise provided in this Agreement, the
Company shall not be under any liability to Xxxxx & Co. (other than
for obligations assumed in Section 5 hereof), and Xxxxx & Co. shall
not be under any liability to the Company; provided, however, that
if this Agreement is terminated by Xxxxx & Co. because of any
failure, refusal or inability on the part of the Company to comply
with the terms or to fulfill any of the conditions of this
Agreement, or for any reason provided in subparagraph (b) above, the
Company will reimburse Xxxxx & Co. for all accountable out-of-pocket
expenses (including, without limitation, road show expenses and fees
and disbursements of counsel to Xxxxx & Co.) up to a maximum of
$40,000 (including the $10,000 advance below) incurred by it in
connection with the proposed purchase and sale of the Stock or in
contemplation the performing its obligations hereunder. Xxxxx & Co.
acknowledges receipt of a $10,000 advance from the Company. If this
Agreement is terminated for any reason, Xxxxx & Co. shall be
entitled to retain such advance as reimbursement for its accountable
out-of-pocket expenses; provided, however, in the event that the
accountable out-of-pocket expenses to be reimbursed under this
paragraph are less than $10,000, Xxxxx & Co. shall pay the
difference to the Company. If this Agreement is not terminated, the
$10,000 shall be credited at closing against the underwriting
discount.
Notwithstanding any election hereunder or any termination of this
Agreement, and whether or not this Agreement is otherwise carried out, the
provisions of Section 9 shall not be in any way affected by such election or
termination or failure to carry out the terms of this Agreement or any part
hereof.
12. Notices. All 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 Xxxxx & Co.,
L.L.C., Xxx Xxxxxxxx, Xxxxxxx, Xxxxxxxx 00000 Attention: Xxxx X. Xxxxxxxx;
with a copy to Xxxxxx X. Xxxx, Esq., Xxxxxxxx Xxxxxx Xxxxxxxx and Xxxx, 0000
Xxxxx Xxxxxxxx Xxxxxxxx, Xxxxxxx, Xxxxxxxx 00000; if sent to the Company
shall be mailed, delivered or telegraphed and confirmed to Dearborn Bancorp,
Inc., 00000 Xxxxxxxx Xxxxxx, Xxxxxxxx,
00
Xxxxxxxx 00000, Attention: President, with a copy to Xxxxx X. Xxxxxxx XX,
Esq., Xxxxxxxxx Xxxxxx PLLC, 000 Xxxxxxxx Xxxxxx, Xxxxx 0000, Xxxxxxx,
Xxxxxxxx 00000-0000.
13. Parties. This Agreement shall inure solely to the benefit of,
and shall be binding upon, you, the Company, and the controlling persons,
directors and officers referred to in Section 9 hereof, and their respective
successors, legal representatives and assigns, and no other person shall have
or be construed to have any legal or equitable right, remedy or claim under
or in respect of or by virtue of this Agreement or any provision herein
contained.
14. Construction. The laws of the State of Michigan shall govern
this Agreement, its construction, and the determination of any rights, duties
or remedies of the parties arising out of or relating to this Agreement. The
parties acknowledge that the United States District Court for the Eastern
District of Michigan or the Michigan Circuit Court for the County of Xxxxx
shall have exclusive jurisdiction over any case or controversy arising out of
or relating to this Agreement and that all litigation arising out of or
relating to this Agreement shall be commenced in the United States District
Court for the Eastern District of Michigan or in the Xxxxx County (Michigan)
Circuit Court.
If the foregoing correctly sets forth the understanding among you
and the Company, please so indicate in the space provided below for that
purpose, whereupon this letter shall constitute a binding agreement among us.
Very truly yours,
DEARBORN BANCORP, INC.
By: _______________________
Its: __________________
Accepted as of the date first above written.
XXXXX & CO., L.L.C.
By: _____________________________
Xxxx X. Xxxxxxxx,
Director, Corporate Finance
23
