EXHIBIT 1.1
1,000,000 SHARES*
MERCANTILE BANK CORPORATION
COMMON STOCK
UNDERWRITING AGREEMENT
St. Petersburg, Florida
September __, 2003
Xxxxxxx Xxxxx & Associates, Inc.
As Representative of the Several Underwriters
listed on Schedule I hereto
000 Xxxxxxxx Xxxxxxx
Xx. Xxxxxxxxxx, Xxxxxxx 00000
Ladies and Gentlemen:
Mercantile Bank Corporation, a Michigan corporation (the "Company"),
proposes, subject to the terms and conditions stated herein, to issue and sell
to the several Underwriters named in Schedule I hereto (the "Underwriters"), an
aggregate of 1,000,000 shares of its Common Stock, no par value (the "Common
Stock"). The aggregate of 1,000,000 shares to be purchased from the Company are
called the "Firm Shares." In addition, the Company has agreed to sell to the
Underwriters, upon the terms and conditions stated herein, up to an additional
150,000 shares of Common Stock (the "Additional Shares") to cover
over-allotments by the Underwriters, if any. The Firm Shares and the Additional
Shares are collectively referred to in this Agreement as the "Shares." Xxxxxxx
Xxxxx & Associates, Inc. is acting as the representative of the several
Underwriters and in such capacity is referred to in this Agreement as the
"Representative."
The Company wishes to confirm as follows its agreement with you and the
other several Underwriters, on whose behalf you are acting, in connection with
the several purchases of the Shares from the Company.
1. Registration Statement and Prospectus. The Company has prepared and
filed with the Securities and Exchange Commission (the "Commission") in
accordance with the provisions of the Securities Act of 1933, as amended, and
the rules and regulations of the Commission thereunder (collectively, the
"Act"), a registration statement on Form S-3 (File No. 333-107814), including a
prospectus subject to completion, relating to the Shares. Such registration
statement, as amended, including the financial statements, exhibits and
schedules thereto, at the time when it becomes effective and as thereafter
amended by any post-effective amendment, is referred to
------------------
* Plus an additional 150,000 shares subject to Underwriter's over-allotment
option.
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in this Agreement as the "Registration Statement." The prospectus in the form
included in the Registration Statement or, if the prospectus included in the
Registration Statement omits certain information in reliance upon Rule 430A
under the Act and such information is thereafter included in a prospectus filed
with the Commission pursuant to Rule 424(b) under the Act or as part of a
post-effective amendment to the Registration Statement after the Registration
Statement becomes effective, the prospectus as so filed, is referred to in this
Agreement as the "Prospectus." If the Company files another registration
statement with the Commission to register a portion of the Shares pursuant to
Rule 462(b) under the Act (the "Rule 462 Registration Statement"), then any
reference to "Registration Statement" herein shall be deemed to include the
registration statement on Form S-3 (File No. 333-107814) and the Rule 462
Registration Statement, as each such registration statement may be amended
pursuant to the Act. The prospectus subject to completion in the form included
in the Registration Statement at the time of the initial filing of such
Registration Statement with the Commission and as such prospectus is amended
from time to time until the date of the Prospectus is referred to in this
Agreement as the "Preliminary Prospectus." All references in this Agreement to
the Registration Statement, the Rule 462 Registration Statement, a Preliminary
Prospectus or the Prospectus, or any amendments or supplements to any of the
foregoing, shall include any copy thereof filed with the Commission pursuant to
its Electronic Data Gathering, Analysis and Retrieval System ("XXXXX"). Any
reference in this Agreement to the Registration Statement, any Preliminary
Prospectus or the Prospectus shall be deemed to refer to and include the
documents incorporated by reference therein, as of the date of the Registration
Statement, such Preliminary Prospectus or the Prospectus, as the case may be,
and any reference to any amendment or supplement to the Registration Statement,
any Preliminary Prospectus or the Prospectus shall be deemed to refer to and
include any documents filed after such date under the Securities Exchange Act of
1934, as amended (the "Exchange Act") that, upon filing, are incorporated by
reference therein. As used herein, the term "Incorporated Documents" means the
documents that at the time of filing are incorporated by reference in the
Registration Statement, any Preliminary Prospectus, the Prospectus or any
amendment or supplement thereto.
2. Agreements to Sell and Purchase. The Company hereby agrees to issue
and sell the Firm Shares to the Underwriters and, upon the basis of the
representations, warranties and agreements of the Company herein contained and
subject to all the terms and conditions set forth herein, each Underwriter
agrees, severally and not jointly, to purchase from the Company at a purchase
price of $[______] per Share (the "purchase price per Share"), the number of
Firm Shares set forth opposite the name of such Underwriter in Schedule I
hereto.
The Company hereby also agrees to sell to the Underwriters, and, upon
the basis of the representations, warranties and agreements of the Company
herein contained and subject to all the terms and conditions set forth herein,
the Underwriters shall have the right for 30 days from the date of the
Prospectus to purchase from the Company up to 150,000 Additional Shares at the
purchase price per Share for the Firm Shares. The Additional Shares may be
purchased solely for the purpose of covering over-allotments, if any, made in
connection with the offering of the Firm Shares. If any Additional Shares are to
be purchased, each Underwriter, severally and not jointly, agrees to purchase
the number of Additional Shares (subject to such adjustments as you may
determine to avoid fractional shares) that bears the same proportion to the
total number of Additional Shares to be purchased by the Underwriters as the
number of Shares set forth opposite the name of such Underwriter in Schedule I
hereto bears to the total number of Shares.
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The option to purchase Additional Shares may be exercised at any time within 30
days after the date of the Prospectus, but no more than once.
3. Terms of Public Offering. The Company has been advised by you that
the Underwriters propose to make a public offering of their respective portions
of the Shares as soon after the Registration Statement and this Agreement have
become effective as in your judgment is advisable and initially to offer the
Shares upon the terms set forth in the Prospectus.
Not later than 12:00 p.m. on the second business day following the date
the Shares are released by the Underwriters for sale to the public, the Company
shall deliver or cause to be delivered copies of the Prospectus in such
quantities and at such places as the Representative shall request.
4. Delivery of the Shares and Payment Therefor. Delivery to the
Underwriters of the Firm Shares and payment therefor shall be made at the
offices of Vedder, Price, Xxxxxxx & Kammholz, P.C., 000 Xxxxx XxXxxxx Xxxxxx,
Xxxxxxx, Xxxxxxxx, at 10:00 a.m., Chicago, Illinois time, on [_________], or
such other place, time and date as the Representative shall designate by notice
to the Company (the time and date of such closing are called the "Closing
Date"). The place of closing for the Firm Shares and the Closing Date may be
varied by agreement between the Representative and the Company. The Company
hereby acknowledges that circumstances under which the Representative may
provide notice to postpone the Closing Date as originally scheduled include any
determination by the Company or the Representative to recirculate to the public
copies of an amended or supplemented Prospectus or a delay as contemplated by
the provisions of Section 11 hereof.
Delivery to the Underwriters of and payment for any Additional Shares
to be purchased by the Underwriters shall be made at the offices of Vedder,
Price, Xxxxxxx & Kammholz, P.C., 000 Xxxxx XxXxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx, at
10:00 a.m., Chicago, Illinois time,, on such date or dates (the "Additional
Closing Date") (which may be the same as the Closing Date, but shall in no event
be earlier than the Closing Date nor earlier than three nor later than ten
business days after the giving of the notice hereinafter referred to) as shall
be specified in a written notice, from the Representative on behalf of the
Underwriters to the Company, of the Underwriters' determination to purchase a
number, specified in such notice, of Additional Shares. Such notice may be given
at any time within 30 days after the date of the Prospectus and must set forth
(i) the aggregate number of Additional Shares as to which the Underwriters are
exercising the option and (ii) the names and denominations in which the
certificates for which the Additional Shares are to be registered. The place of
closing for the Additional Shares and the Additional Closing Date may be varied
by agreement between you and the Company.
Certificates for the Firm Shares and for any Additional Shares to be
purchased hereunder shall be registered in such names and in such denominations
as you shall request prior to 1:00 p.m., Chicago, Illinois time, not later than
the second full business day preceding the Closing Date or the Additional
Closing Date, as the case may be. Such certificates shall be made available to
you in Chicago, Illinois for inspection and packaging not later than 8:30 a.m.,
Chicago, Illinois time, on the business day immediately preceding the Closing
Date or the Additional Closing Date, as the case may be. The certificates
evidencing the Firm Shares and any Additional Shares to be purchased hereunder
shall be delivered to you on the Closing Date
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or the Additional Closing Date, as the case may be, against payment of the
purchase price therefore to the Company by wire transfer of immediately
available funds to an account specified in writing by the Company.
The Representative has advised the Company that the Representative has
been authorized, for its own account and the accounts of the several
Underwriters, to accept delivery of and receipt for, and make payment of the
purchase price per Share for the Firm Shares and the Additional Shares, if any,
that the Underwriters have agreed to purchase. Xxxxxxx Xxxxx & Associates, Inc.,
individually and not as Representative of the Underwriters, may, but shall not
be obligated to, make payment for any Shares to be purchased by any Underwriter
whose funds shall not have been received by the Representative by the Closing
Date or the Additional Closing Date, as the case may be, for the account of such
Underwriter, but any such payment shall not relieve such Underwriter from any of
its obligations under this Agreement.
5. Covenants and Agreements of the Company.
The Company covenants and agrees with the several Underwriters as
follows:
(a) The Company will use its best efforts to cause the
Registration Statement and any amendments thereto to become effective, if it has
not already become effective, and will advise you promptly and, if requested by
you, will confirm such advice in writing (i) when the Registration Statement has
become effective and the time and date of any filing of any post-effective
Registration Statement or any amendment or supplement to any Preliminary
Prospectus or the Prospectus and the time and date that any post-effective
amendment to the Registration Statement becomes effective, (ii) if Rule 430A
under the Act is used, when the Prospectus has been timely filed pursuant to
Rule 424(b) under the Act, (iii) of the receipt of any comments of the
Commission, or any request by the Commission for amendments or supplements to
the Registration Statement, any Preliminary Prospectus or the Prospectus or for
additional information, (iv) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or of the suspension
of qualification of the Shares for offering or sale in any jurisdiction or the
initiation of any proceeding for such purposes and (v) within the period of time
referred to in Section 5(e) below, of any change in the Company's condition
(financial or other), business, prospects, properties, net worth or results of
operations, or of any event that comes to the attention of the Company that
makes any statement made in the Registration Statement or the Prospectus (as
then amended or supplemented) untrue in any material respect or that requires
the making of any additions thereto or changes therein in order to make the
statements therein (in the case of the Prospectus, in light of the circumstances
under which they were made) not misleading in any material respect, or of the
necessity to amend or supplement the Prospectus (as then amended or
supplemented) to comply with the Act or any other law. If at any time the
Commission shall issue any stop order suspending the effectiveness of the
Registration Statement, the Company will use its best efforts to obtain the
withdrawal or lifting of such order at the earliest possible time. The Company
will provide the Underwriters with copies of the form of Prospectus, in such
number as the Underwriters may reasonably request, and file with the Commission
such Prospectus in accordance with Rule 424(b) of the Act before the close of
business on the first business day immediately following the date hereof.
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(b) The Company will furnish to you, without charge, two
signed duplicate originals of the Registration Statement as originally filed
with the Commission and of each amendment thereto, including financial
statements and all exhibits thereto, and will also furnish to you, without
charge, such number of conformed copies of the Registration Statement as
originally filed and of each amendment thereto as you may reasonably request.
(c) The Company will not file any Rule 462 Registration
Statement or any amendment to the Registration Statement or make any amendment
or supplement to the Prospectus unless (i) you and your counsel shall have
previously been advised thereof and been given a reasonable opportunity to
review such filing, amendment or supplement and (ii) you or your counsel have
not reasonably objected to such filing, amendment or supplement after being so
advised and having been given a reasonable opportunity to review such filing,
amendment or supplement.
(d) Prior to the execution and delivery of this Agreement, the
Company has delivered or will deliver to you, without charge, in such quantities
as you have requested or may hereafter reasonably request, copies of each form
of the Preliminary Prospectus. Consistent with the provisions of Section 5(e)
hereof, the Company consents to the use, in accordance with the provisions of
the Act and with the securities or Blue Sky laws of the jurisdictions in which
the Shares are offered by the several Underwriters and by dealers, prior to the
date of the Prospectus, of each Preliminary Prospectus so furnished by the
Company.
(e) As soon after the execution and delivery of this Agreement
as is practicable and thereafter from time to time for such period as in the
reasonable opinion of counsel for the Underwriters a prospectus is required by
the Act to be delivered in connection with sales by any Underwriter or a dealer
(the "Prospectus Delivery Period"), and for so long a period as you may request
for the distribution of the Shares, the Company will deliver to each Underwriter
and each dealer, without charge, as many copies of the Prospectus (and of any
amendment or supplement thereto) as they may reasonably request. The Company
consents to the use of the Prospectus (and of any amendment or supplement
thereto) in accordance with the provisions of the Act and with the securities or
Blue Sky laws of the jurisdictions in which the Shares are offered by the
several Underwriters and by all dealers to whom Shares may be sold, both in
connection with the offering and sale of the Shares and for such period of time
thereafter as the Prospectus is required by the Act to be delivered in
connection with sales by any Underwriter or dealer. If at any time prior to the
later of (i) the completion of the distribution of the Shares pursuant to the
offering contemplated by the Registration Statement or (ii) the expiration of
prospectus delivery requirements with respect to the Shares under Section 4(3)
of the Act and Rule 174 thereunder, any event shall occur that in the judgment
of the Company or in the opinion of counsel for the Underwriters is required to
be set forth in the Prospectus (as then amended or supplemented) or should be
set forth therein in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or if it is necessary
to supplement or amend the Prospectus to comply with the Act or any other law,
the Company will forthwith prepare and, subject to Sections 5(a) and 5(c)
hereof, file with the Commission and use its best efforts to cause to become
effective as promptly as possible an appropriate supplement or amendment
thereto, and will furnish to each Underwriter who has previously requested
Prospectuses, without charge, a reasonable number of copies thereof.
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(f) The Company will cooperate with you and counsel for the
Underwriters in connection with the registration or qualification of the Shares
for offering and sale by the several Underwriters and by dealers under the
securities or Blue Sky laws of such jurisdictions as you may reasonably
designate and will file such consents to service of process or other documents
as may be reasonably necessary in order to effect and maintain such registration
or qualification for so long as required to complete the distribution of the
Shares; provided that in no event shall the Company be obligated to qualify to
do business in any jurisdiction where it is not now so qualified or to take any
action that would subject it to general service of process in suits, other than
those arising out of the offering or sale of the Shares, as contemplated by this
Agreement and the Prospectus, in any jurisdiction where it is not now so
subject. In the event that the qualification of the Shares in any jurisdiction
is suspended, the Company shall so advise you promptly in writing. The Company
will use its best efforts to qualify or register its Common Stock for sale in
non-issuer transactions under (or obtain exemptions from the application of) the
Blue Sky laws of each state where necessary to permit market making transactions
and secondary trading and will comply with such Blue Sky laws and will continue
such qualifications, registrations and exemptions in effect for a period of 5
years after the date hereof.
(g) The Company will make generally available to its security
holders a consolidated earnings statement (in form complying with the provisions
of Rule 158), which need not be audited, covering a twelve-month period
commencing after the effective date of the Registration Statement, and ending
not later than 15 months thereafter, as soon as practicable after the end of
such period, which consolidated earnings statement shall satisfy the provisions
of Section 11(a) of the Act.
(h) During the Prospectus Delivery Period, the Company will
file all documents required to be filed with the Commission pursuant to Sections
13, 14 and 15 of the Exchange Act in the manner and within the time periods
required by the Exchange Act.
(i) During the period ending five years from the date hereof,
the Company will furnish to you and, upon your request, to each of the other
Underwriters, (i) as soon as available, a copy of each proxy statement,
quarterly or annual report or other report of the Company mailed to its
shareholders or filed with the Commission, the National Association of
Securities Dealers, Inc. (the "NASD") or the Nasdaq National Market ("NASDAQ")
or any national securities exchange and (ii) from time to time such other
information concerning the Company as you may reasonably request.
(j) If this Agreement shall terminate or shall be terminated
after execution pursuant to any provision hereof (except pursuant to a
termination under Section 12 hereof, in which case the provisions of this
paragraph shall not apply) or if this Agreement shall be terminated by the
Underwriters because of any inability, failure or refusal on the part of the
Company to perform in all material respects any agreement herein or to comply in
all material respects with any of the terms or provisions hereof or to fulfill
in all material respects any of the conditions of this Agreement, the Company
agrees to reimburse you and the other Underwriters for all out-of-pocket
expenses (including travel expenses and reasonable fees and expenses of counsel
for the Underwriters, but excluding wages and salaries paid by you) reasonably
incurred by you in connection herewith.
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(k) The Company will apply the net proceeds from the sale of
the Shares to be sold by it hereunder in accordance in all material respects
with the statements under the caption "Use of Proceeds" in the Prospectus.
(l) If Rule 430A under the Act is employed, the Company will
timely file the Prospectus pursuant to Rule 424(b) under the Act.
(m) For a period of 90 days after the date of the Prospectus
first filed pursuant to Rule 424(b) under the Act, without your prior written
consent, the Company will not, (i) directly or indirectly, issue, sell, offer or
contract to sell or otherwise dispose of or transfer any shares of Common Stock
or securities convertible into or exchangeable or exercisable for shares of
Common Stock (collectively, "Company Securities") or any rights to purchase
Company Securities, or file any registration statement under the Act with
respect to any of the foregoing or (ii) enter into any swap or other agreement
that transfers, in whole or in part, directly or indirectly, the economic
consequences of ownership of Company Securities whether any such swap or
transaction is to be settled by delivery of Common Stock or other securities, in
cash or otherwise, except to the Underwriters pursuant to this Agreement and
except for the issuance, sale or grant of options or shares of Common Stock
pursuant to the Company's stock option, stock purchase or dividend reinvestment
plans in effect as of the date hereof ("Permitted Plans") and described in the
Prospectus and except for issuances of shares of Common Stock upon the exercise
of options under such plans.
(n) Prior to the Closing Date or the Additional Closing Date,
as the case may be, the Company will furnish to you, as promptly as practicable,
copies of any unaudited interim consolidated financial statements of the Company
and its Subsidiaries for any period subsequent to the periods covered by the
financial statements appearing in the Prospectus.
(o) The Company will comply with all provisions of any
undertakings contained in the Registration Statement.
(p) The Company will not at any time, directly or indirectly,
take any action designed, or which might reasonably be expected to cause or
result in, or which will constitute, stabilization or manipulation of the price
of the shares of Common Stock to facilitate the sale or resale of any of the
Shares.
(q) The Company will timely file with NASDAQ all documents and
notices required by the NASDAQ of companies that have or will issue securities
that are traded on the NASDAQ.
6. Representations and Warranties of the Company.
The Company hereby represents and warrants to each Underwriter on the
date hereof, and shall be deemed to represent and warrant to each Underwriter on
the Closing Date and the Additional Closing Date, as the case may be, that:
(a) The Company satisfies all of the requirements of the Act
for use of Form S-3 for the offering of Shares contemplated hereby. Each
Preliminary Prospectus included as part of the Registration Statement as
originally filed or as part of any amendment or
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supplement thereto, or filed pursuant to Rule 424(a) under the Act, complied as
to form when so filed in all material respects with the provisions of the Act,
except that this representation and warranty does not apply to statements in or
omissions from such Preliminary Prospectus (or any amendment or supplement
thereto) made in reliance upon and in conformity with information relating to
any Underwriter furnished to the Company in writing by or on behalf of any
Underwriter through you or your counsel expressly for use therein. The
Commission has not issued any order preventing or suspending the use of any
Preliminary Prospectus and no proceeding for that purpose has been instituted or
threatened by the Commission or the securities authority of any state or other
jurisdiction.
(b) The Company has prepared the Registration Statement, and
any post-effective amendment thereto, and the Prospectus and any amendments or
supplements thereto. The Registration Statement in the form in which it became
effective and also in such form as it may be when any post-effective amendment
thereto shall become effective, and the Prospectus, and any supplement or
amendment thereto when filed with the Commission under Rule 424(b) under the
Act, complied or will comply as to form in all material respects with the
provisions of the Act and did not and will not at any such times 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,
except that this representation and warranty does not apply to statements in or
omissions from the Registration Statement or the Prospectus (or any amendment or
supplement thereto) made in reliance upon and in conformity with information
relating to any Underwriter furnished to the Company in writing by or on behalf
of any Underwriter through you or your counsel expressly for use therein.
(c) Each Preliminary Prospectus and the Prospectus, filed by
electronic transmission pursuant to XXXXX (except as may be permitted by
Regulation S-T under the Act), was identical to the copy thereof delivered to
the Underwriters for use in connection with the offer and sale of the Shares.
(d) The Incorporated Documents heretofore filed, when they
were filed (or, if any amendment with respect to any such document was filed,
when such amendment was filed), conformed in all material respects with the
requirements of the Exchange Act and the rules and regulations thereunder, and
any other Incorporated Documents so filed will, when they are filed, conform in
all material respects to the requirements of the Exchange Act and the rules and
regulations thereunder; no such Incorporated Document when it was filed (or, if
an amendment with respect to any such document was filed, when such amendment
was filed), contained an untrue statement of a material fact or omitted to state
a material fact required to be stated therein or necessary in order to make the
statements therein not misleading; and no such other Incorporated Document, when
it is filed, will contain an untrue statement of a material fact or will omit to
state a material fact required to be stated therein or necessary in order to
make the statements therein not misleading.
(e) The capitalization of the Company is and will be as set
forth in the Prospectus as of the date set forth therein. All the outstanding
shares of Common Stock of the Company have been, and as of the Closing Date and
the Additional Closing Date, as the case may be, will be, duly authorized and
validly issued, are fully paid and nonassessable and are free of any preemptive
or similar rights; except as set forth in the Prospectus or pursuant to
Permitted
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Plans described in the Prospectus, the Company is not a party to or bound by any
outstanding options, warrants or similar rights to subscribe for, or contractual
obligations to issue, sell, transfer or acquire, any of its capital stock or any
securities convertible into or exchangeable for any of such capital stock; the
Shares to be issued and sold to the Underwriters by the Company hereunder have
been duly authorized and, when issued and delivered to the Underwriters against
full payment therefor in accordance with the terms hereof will be validly
issued, fully paid and nonassessable and free of any preemptive or similar
rights; the capital stock of the Company conforms to the description thereof in
the Registration Statement and the Prospectus (or any amendment or supplement
thereto); and the delivery of certificates for the Shares being sold by the
Company against payment therefor pursuant to the terms of this Agreement will
pass valid title to the Shares being sold by the Company, free and clear of any
claim, encumbrance or defect in title, to the several Underwriters purchasing
such shares in good faith and without notice of any lien, claim or encumbrance.
Any certificates issued for the Shares being sold by the Company will be in
valid and sufficient form.
(f) The only direct or indirect subsidiaries of the Company
are as set forth on Schedule II to this Agreement (each a "Subsidiary", and
together, the "Subsidiaries"). Each of the Company and its Subsidiaries is a
corporation duly organized and validly existing as a corporation in good
standing under the laws of the state of its incorporation with full corporate
power and authority to own, lease and operate its properties and to conduct its
business as presently conducted and as described in the Registration Statement
and the Prospectus (and any amendment or supplement thereto). Each of the
Company and its Subsidiaries is duly registered and qualified to conduct its
business and is in good standing in each jurisdiction or place where the nature
of its properties or the conduct of its business requires such registration or
qualification, except where the failure to so register or qualify has not had or
will not have a material adverse effect on the condition (financial or other),
business, properties, net worth, results of operations or prospects of the
Company and its Subsidiaries, taken as a whole (a "Material Adverse Effect").
The Company is duly registered as a bank holding company under the Bank Holding
Company Act of 1956, as amended (the "BHC"). The deposit accounts of Mercantile
Bank of West Michigan (the "Bank") are insured by the Bank Insurance Fund
administered by the Federal Deposit Insurance Corporation (the "FDIC") up to the
maximum amount provided by law, and no proceedings for the modification,
termination or revocation of any such insurance are pending or, to the knowledge
of the Company, threatened.
(g) The issued shares of capital stock of each of the
Company's Subsidiaries have been duly authorized and validly issued, are fully
paid and nonassessable, except to the extent such shares may be deemed
assessable under 12 U.S.C. 1831o or under applicable state banking laws, and are
owned, directly or indirectly, by the Company free and clear of any security
interests, liens, encumbrances, equities or claims. The Company does not have
any Subsidiaries and does not own a material interest in or control, directly or
indirectly, any other corporation, partnership, joint venture, association,
trust or other business organization, except as set forth on Schedule II
attached hereto.
(h) There are no legal or governmental proceedings pending or,
to the best knowledge of the Company, threatened, against the Company or its
Subsidiaries or to which the Company or its Subsidiaries or any of their
properties are subject, that are required to be described in the Registration
Statement or the Prospectus (or any amendment or supplement
9
thereto) but are not described as required. Except as described in the
Prospectus, there is no action, suit, inquiry, proceeding or investigation by or
before any court or governmental or other regulatory or administrative agency or
commission pending or, to the best knowledge of the Company, threatened, against
or involving the Company or its Subsidiaries, which would reasonably be expected
individually or in the aggregate to prevent or adversely affect the transactions
contemplated by this Agreement or result in a Material Adverse Effect, nor to
the Company's knowledge, is there any basis for any such action, suit, inquiry,
proceeding or investigation. There are no agreements, contracts, indentures,
leases or other instruments that are required to be described in the
Registration Statement or the Prospectus (or any amendment or supplement
thereto) or to be filed as an exhibit to the Registration Statement that are not
described, filed or incorporated by reference in the Registration Statement and
the Prospectus as required by the Act. All such contracts to which the Company
or any of its Subsidiaries is a party have been duly authorized, executed and
delivered by the Company or the applicable Subsidiary, constitute valid and
binding agreements of the Company or the applicable Subsidiary and are
enforceable by the Company or the applicable Subsidiary in accordance with the
terms thereof, except as enforceability thereof may be limited by (i) the
application of bankruptcy, reorganization, insolvency and other laws affecting
creditors' rights generally and (ii) equitable principles being applied at the
discretion of a court before which any proceeding may be brought, and except
where the failure to be enforceable would not have a Material Adverse Effect.
Neither the Company nor the applicable Subsidiary has received notice or been
made aware that any other party is in breach of or default to the Company under
any of such contracts.
(i) Neither the Company nor any of its Subsidiaries is (i) in
violation of (A) its articles of incorporation or bylaws, or other
organizational documents, (B) any federal, state or local statute, law,
ordinance, administrative or governmental rule or regulation as now in effect
and applicable to the Company or any of its Subsidiaries, or (C) any decree of
any court or governmental agency or body having jurisdiction over the Company or
any of its Subsidiaries, where in any such case under (B) or (C) the violation
would have a Material Adverse Effect; or (ii) in breach of or default in any
material respect in the performance of any obligation, agreement or condition
contained in (A) any bond, debenture, note or any other evidence of indebtedness
or (B) any agreement, indenture, lease or other instrument (each of (A) and (B),
an "Existing Instrument") to which the Company or any of its Subsidiaries is a
party or by which any of their properties may be bound, which breach or default
would have a Material Adverse Effect; and there does not exist any state of
facts that constitutes an event of default on the part of the Company or any of
its Subsidiaries as defined in such documents that would have a Material Adverse
Effect, or that, with notice or lapse of time or both, would constitute such an
event of default. Neither the Company nor any non-banking Subsidiary engages
directly or indirectly in any activity prohibited by the Board of Governors of
the Federal Reserve System (the "FRB") or the BHC Act or the regulations
promulgated thereunder. Neither the Company nor any Subsidiary is subject to a
directive from the Commission, the FDIC, the FRB, Michigan Banking Regulators or
any other governmental authority to make any material changes in the method of
conducting its business and no such directive is pending or threatened by such
authorities.
(j) The Company's execution and delivery of this Agreement and
the performance by the Company of its obligations under this Agreement have been
duly and validly authorized by the Company and has been duly executed and
delivered by the Company, and this
10
Agreement constitutes a valid and legally binding agreement of the Company,
enforceable against the Company in accordance with its terms, except to the
extent enforceability may be limited by (i) the application of bankruptcy,
reorganization, insolvency and other laws affecting creditors' rights generally
and (ii) equitable principles being applied at the discretion of a court before
which any proceeding may be brought, except as rights to indemnity and
contribution hereunder may be limited by federal or state securities laws, rules
of the Commission or public policy.
(k) None of the issuance and sale of the Shares by the
Company, the execution, delivery or performance of this Agreement by the Company
nor the consummation by the Company of the transactions contemplated hereby (i)
requires any consent, approval, authorization or other order of or registration
or filing with, any court, regulatory body, administrative agency or other
governmental body, agency or official (except such as may be required for the
registration of the Shares under the Act, the listing of the Shares for trading
on NASDAQ, the registration of the Common Stock under the Exchange Act and the
rules and regulations of the Commission thereunder and compliance with the
securities or Blue Sky laws of various jurisdictions, all of which will be, or
have been, effected in accordance with this Agreement and except for the NASD's
clearance of the underwriting terms of the offering contemplated hereby as
required under the NASD's Rules of Fair Practice), (ii) conflicts with or will
conflict with or constitutes or will constitute a breach of, or a default under,
the Company's articles of incorporation or the Company's bylaws or any
agreement, indenture, lease or other instrument to which the Company or any of
its Subsidiaries is a party or by which any of its properties may be bound,
(iii) violates any statute, law, regulation, ruling, filing, judgment,
injunction, order or decree applicable to the Company or any of its Subsidiaries
or any of their properties, or (iv) results in a breach of, or default under, or
results in the creation or imposition of any lien, charge or encumbrance upon
any property or assets of the Company or any of its Subsidiaries pursuant to, or
requires the consent of any other party to, any Existing Instrument, except for
such conflicts, breaches, defaults, liens, charges or encumbrances that will
not, individually or in the aggregate, result in a Material Adverse Effect.
(l) Except as described in the Prospectus, and except pursuant
to Permitted Plans described in the Prospectus, neither the Company nor any of
its Subsidiaries has outstanding and at the Closing Date and the Additional
Closing Date, as the case may be, will have outstanding any options to purchase,
or any warrants to subscribe for, or any securities or obligations convertible
into, or any contracts or commitments to issue or sell, any shares of Common
Stock or any such warrants or convertible securities or obligations. No holder
of securities of the Company has rights to the registration of any securities of
the Company as a result of or in connection with the filing of the Registration
Statement or the consummation of the transactions contemplated hereby that have
not been satisfied or heretofore waived in writing.
(m) Xxxxx Xxxxxx and Company LLC, the certified public
accountants who have certified the financial statements (including the related
notes thereto and supporting schedules) filed as part of the Registration
Statement and the Prospectus (or any amendment or supplement thereto), are
independent public accountants as required by the Act and the Exchange Act. The
Company has not engaged Xxxxx Xxxxxx and Company LLC to provide any services to
the Company that are impermissible under the Exchange Act, except to as
permissible under the Exchange Act at the time such services were provided. All
such services have been approved by
11
the Audit Committee of the Company's Board of Directors or one of its members
duly authorized by the Audit Committee, as required by the Exchange Act.
(n) The financial statements, together with related schedules
and notes, included in the Registration Statement and the Prospectus (and any
amendment or supplement thereto), present fairly the financial condition,
results of operations, cash flows and changes in financial position of the
Company on the basis stated in the Registration Statement at the respective
dates or for the respective periods to which they apply; such statements and
related schedules and notes have been prepared in accordance with generally
accepted accounting principles consistently applied throughout the periods
involved, except as disclosed therein; and the other financial and statistical
information and data set forth in the Registration Statement and Prospectus (and
any amendment or supplement thereto) is accurately presented and prepared on a
basis consistent with such financial statements and the books and records of the
Company.
(o) Except as disclosed in the Registration Statement and the
Prospectus (or any amendment or supplement thereto), subsequent to the
respective dates as of which such information is given in the Registration
Statement and the Prospectus (or any amendment or supplement thereto), (i)
neither the Company nor any of its Subsidiaries has incurred any material
liabilities or obligations, indirect, direct or contingent, or entered into any
transaction that is not in the ordinary course of business, (ii) neither the
Company nor any of its Subsidiaries has sustained any material loss or
interference with its business or properties from fire, flood, windstorm,
accident or other calamity, whether or not covered by insurance, (iii) neither
the Company nor any of its Subsidiaries has paid or declared any dividends or
other distributions with respect to its capital stock and the Company is not in
default under the terms of any class of capital stock of the Company or any
outstanding debt obligations, (iv) there has not been any change in the
authorized or outstanding capital stock of the Company except changes to the
outstanding capital stock made as a result of the issuance of stock pursuant to
Permitted Plans as described in the Prospectus, or any material change in the
indebtedness of the Company (other than in the ordinary course of business) and
(v) there has not been any material adverse change, or any development involving
or that may reasonably be expected to result in a Material Adverse Effect, in
the condition (financial or otherwise), business, properties, net worth or
result of operations of the Company.
(p) All offers and sales of the Company's capital stock and
other debt or other securities prior to the date hereof were made in compliance
with or were the subject of an available exemption from the Act and all other
applicable state and federal laws or regulations, or any actions under the Act
or any state or federal laws or regulations in respect of any such offers or
sales are effectively barred by effective waivers or statutes of limitation.
(q) The Common Stock (including the Shares) is registered
pursuant to Section 12(g) of the Exchange Act and is listed for quotation on
NASDAQ under the symbol "MBWM", and the Company has taken no action, nor has
failed to take any action, designed to, or likely to have the effect of,
terminating the registration of the Common Stock under the Exchange Act or
delisting the Common Stock from NASDAQ, nor has the Company received any
notification that the Commission or the NASD is contemplating terminating such
registration or listing.
12
(r) The Company has not distributed and will not distribute,
and has not authorized the Underwriters to distribute, any offering material in
connection with the offering and sale of the Shares other than the Preliminary
Prospectus, the Prospectus or other offering material, if any, as permitted by
the Act.
(s) Other than excepted activity pursuant to Regulation M
under the Exchange Act, the Company has not taken and will not take, directly or
indirectly, any action that constituted, or any action designed to, or that
might reasonably be expected to cause or result in or constitute, under the Act
or otherwise, stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the Shares or for any other purpose.
(t) The Company and each of its Subsidiaries have filed all
tax returns required to be filed (other than certain state or local tax returns,
as to which the failure to file, individually or in the aggregate, would not
have a Material Adverse Effect), which returns are complete and correct, and
neither the Company nor any Subsidiary is in default in the payment of any taxes
that were payable pursuant to said returns or any assessments with respect
thereto. Except as disclosed in the Prospectus, all deficiencies asserted as a
result of any federal, state, local or foreign tax audits have been paid or
finally settled and no issue has been raised in any such audit that, by
application of the same or similar principles, reasonably could be expected to
result in a proposed deficiency for any other period not so audited. There are
no outstanding agreements or waivers extending the statutory period of
limitation applicable to any federal, state, local or foreign tax return for any
period. On the Closing Date and the Additional Closing Date, as the case may be,
all stock transfer and other taxes that are required to be paid in connection
with the sale of the shares to be sold by the Company to the Underwriters will
have been fully paid by the Company and all laws imposing such taxes will have
been complied with.
(u) Except as set forth in the Prospectus, there are no
transactions with "affiliates" (as defined in Rule 405 promulgated under the
Act) or any officer, director or security holder of the Company (whether or not
an affiliate) that are required by the Act to be disclosed in the Registration
Statement. Additionally, no relationship, direct or indirect, exists between the
Company or any of its Subsidiaries on the one hand, and the directors, officers,
shareholders, customers or suppliers of the Company or any Subsidiary on the
other hand that is required by the Act to be disclosed in the Registration
Statement and the Prospectus that is not so disclosed.
(v) The Company is not an "investment company" or an
"affiliated person" of, or "promoter" or "principal underwriter" for, an
investment company within the meaning of the Investment Company Act of 1940, as
amended.
(w) Each of the Company and its Subsidiaries has good and
valid title to all property (real and personal) described in the Prospectus as
being owned by it, free and clear of all liens, claims, security interests or
other encumbrances except as described in the Prospectus or as will not result
in a Material Adverse Effect to the use of the property or the conduct of the
business of the Company. All property (real and personal) held under lease by
the Company and its Subsidiaries is held by it under valid, subsisting and, to
the best knowledge of the Company, enforceable leases with only such exceptions
as in the aggregate are not materially burdensome
13
and do not have or result in a Material Adverse Effect to the use of the
property or the conduct of the business of the Company.
(x) Except as otherwise disclosed in the Prospectus, each of
the Company and its Subsidiaries has all permits, licenses, franchises,
approvals, consents and authorizations of governmental or regulatory authorities
(hereinafter "permit" or "permits") as are necessary to own its properties and
to conduct its business in the manner described in the Prospectus, subject to
such qualifications as may be set forth in the Prospectus, except where the
failure to have obtained any such permit has not had and will not have a
Material Adverse Effect; each of the Company and its Subsidiaries has operated
and is operating its business in material compliance with and not in material
violation of all of its obligations with respect to each such permit, except
where the failure to be in compliance or such a material violation has not had
and will not have a Material Adverse Effect.
(y) The Company and its Subsidiaries maintain a system of
internal accounting controls and disclosure controls and procedures sufficient
to provide reasonable assurances that (i) transactions are executed in
accordance with management's general or specific authorizations, (ii)
transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles and to
maintain accountability for assets, (iii) access to assets is permitted only in
accordance with management's general or specific authorizations, (iv) the
recorded accountability for assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences, and (v) information and financial data required to be disclosed in
the reports the Company files or submits under the Exchange Act is recorded,
processed, summarized and reported within the time periods specified by the
Commission's rules and forms.
(z) Neither the Company nor any of its Subsidiaries, nor, to
the Company's knowledge, any employee or agent of the Company or any of its
Subsidiaries, has, directly or indirectly, (i) made any unlawful contribution to
any candidate for political office, or failed to disclose fully any contribution
in violation of law or (ii) made any payment to any federal, state, local or
foreign governmental official, or other person charged with similar public or
quasi-public duties, other than payments required or permitted by the laws of
the United States or any jurisdiction thereof or applicable foreign
jurisdictions.
(aa) Except as otherwise disclosed in the Prospectus, each of
the Company and its Subsidiaries owns and has full right, title and interest in
and to, or has valid licenses to use, each material trade name, trademark,
service xxxx, patent, copyright, approval, trade secret and other similar rights
(collectively "Intellectual Property") under which the Company and its
Subsidiaries conduct all or any material part of its business, and the Company
has not created any lien or encumbrance on, or granted any right or license with
respect to, any such Intellectual Property except where the failure to own, have
full right, title or interest, or obtain a license or right to use any such
Intellectual Property has not and will not have a Material Adverse Effect; there
is no claim pending against the Company or its Subsidiaries with respect to any
Intellectual Property and the Company and its Subsidiaries have not received
notice or otherwise become aware that any material Intellectual Property that it
uses or has used in the conduct of its business infringes upon or conflicts with
the rights of any third party, where such infringement of conflict will have a
Material Adverse Effect.
14
(bb) The Company has procured Lock-Up Agreements, in
substantially the form of Exhibit A attached hereto, from each of the Company's
executive officers and directors.
(cc) Except as described in the Prospectus, to the Company's
knowledge, no officer or director of the Company has a direct or indirect
affiliation or association with any member of the NASD.
(dd) Except as otherwise disclosed in the Prospectus, the
Company and each of its Subsidiaries are insured by insurers of recognized
financial responsibility against such losses and risks and in such amounts as
are prudent and customary in the businesses in which it is engaged. The Company
and the Bank maintain insurance of the types and in the amounts required by the
rules and regulations of the FRB and by Michigan banking regulations. Neither
the Company nor any of its Subsidiaries has reason to believe that it will not
be able to renew its existing insurance coverage as and when such coverage
expires or to obtain similar coverage from similar insurers as may be necessary
to continue its business at a comparable cost.
(ee) Except as otherwise disclosed in the Prospectus, the
Company and its Subsidiaries are (i) in compliance with any and all applicable
federal, state, local and foreign laws and regulations relating to the
protection of human health and safety, the environment or hazardous or toxic
substances or wastes, pollutants or contaminants ("Environmental Laws"), (ii)
have received all permits, licenses or other approvals required of them under
applicable Environmental Laws to conduct their respective businesses and (iii)
are in compliance with all terms and conditions of any such permit, license or
approval, except where such noncompliance with Environmental Laws, failure to
receive required permits, licenses or other approvals or failure to comply with
the terms and conditions of such permits, licenses or other approvals would not,
individually or in the aggregate, have a Material Adverse Effect. Except as set
forth in the Prospectus, neither the Company nor any of its Subsidiaries has
been named as a "potentially responsible party" under the Comprehensive
Environmental Response Compensation and Liability Act of 1980, as amended.
Neither the Company nor any of its Subsidiaries owns, leases or occupies any
property that appears on any list of hazardous sites compiled by any state or
local governmental agency.
(ff) Except as otherwise disclosed in the Prospectus, the
Company and its Subsidiaries and any "employee benefit plan" (as defined under
the Employee Retirement Income Security Act of 1974, as amended, and the
regulations and published interpretations thereunder (collectively, "ERISA"))
established or maintained by the Company, its Subsidiaries or their "ERISA
Affiliates" (as defined below) are in compliance in all material respects with
ERISA and all other applicable state and federal laws. "ERISA Affiliate" means,
with respect to the Company or a Subsidiary, any member of any group or
organization described in Sections 414(b), (c), (m) or (o) of the Code of which
the Company or such Subsidiary is a member. No "reportable event" (as defined in
ERISA) has occurred or is reasonably expected to occur with respect to any
"employee benefit plan" established or maintained by the Company, its
Subsidiaries or any of their ERISA Affiliates. No "employee benefit plan"
established or maintained by the Company, its Subsidiaries or any of their ERISA
Affiliates, if such "employee benefit plan" were terminated, would have any
"amount of unfunded benefit liabilities" (as defined in ERISA). Neither the
Company, its Subsidiaries nor any of their ERISA Affiliates has incurred or
reasonably expects to incur any liability under (i) Title IV of ERISA with
respect to
15
termination of, or withdrawal from, any "employee benefit plan" or (ii) Sections
412, 4971, 4975 or 4980B of the Code. Each "employee benefit plan" established
or maintained by the Company, its Subsidiaries or any of their ERISA Affiliates
that is intended to be qualified under Section 401(a) of the Code is so
qualified and nothing has occurred, whether by action or failure to act, that
would cause the loss of such qualification.
7. Expenses. Whether or not the transactions contemplated hereby are
consummated or this Agreement becomes effective or is terminated, the Company
agrees to pay or cause to be paid the following: (i) the fees, disbursements and
expenses of the Company's counsel and accountants in connection with the
registration of the Shares under the Act and all other expenses in connection
with the preparation, printing and filing of the Registration Statement and the
Prospectus and amendments and supplements thereto and the mailing and delivering
of copies thereof and of any Preliminary Prospectus to the Underwriters and
dealers; (ii) the printing and delivery (including postage, air freight charges
and charges for counting and packaging) of such copies of the Registration
Statement, the Prospectus, each Preliminary Prospectus, the Blue Sky memoranda,
the Master Agreement Among Underwriters, this Agreement, the Selected Dealers
Agreement and all amendments or supplements to any of them as may be reasonably
requested for use in connection with the offering and sale of the Shares; (iii)
consistent with the provisions of Section 5.1(f), all expenses in connection
with the qualification of the Shares for offering and sale under state
securities laws or Blue Sky laws, including reasonable attorneys' fees and
out-of-pocket expenses of the counsel for the Underwriters in connection
therewith; (iv) the filing fees incident to securing any required review by the
NASD of the fairness of the terms of the sale of the Shares and the reasonable
fees and disbursements of the Underwriters' counsel relating thereto; (v) the
fees and expenses associated with listing the Shares on NASDAQ; (vi) the cost of
preparing stock certificates; (vii) the costs and charges of any transfer agent
or registrar; (viii) the cost of the tax stamps, if any, in connection with the
issuance and delivery of the Shares to the respective Underwriters; (ix) all
other fees, costs and expenses referred to in Item 14 of the Registration
Statement; and (x) the transportation, lodging, graphics and other expenses
incidental to the Company's preparation for and participation in the "roadshow"
for the offering contemplated hereby. Except as provided in this Section 7 and
in Section 8 hereof, the Underwriters shall pay their own expenses, including
the fees and disbursements of their counsel. In addition, in the event that the
proposed offering is terminated for the reasons set forth in Section 5.1(i)
hereof, the Company agrees to reimburse the Underwriters as provided in Section
5.1(i).
8. Indemnification and Contribution. Subject to the limitations in this
paragraph below, the Company agrees to indemnify and hold harmless you and each
other Underwriter, the directors, officers, employees and agents of each
Underwriter, and each person, if any, who controls any Underwriter within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act from and
against any and all losses, claims, damages, liabilities and expenses, including
reasonable costs of investigation and attorneys' fees and expenses
(collectively, "Damages") arising out of or based upon (i) any untrue statement
or alleged untrue statement of a material fact contained in any Preliminary
Prospectus or in the Registration Statement or the Prospectus or in any
amendment or supplement thereto, or any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein (in the case of the Prospectus, in light of the circumstances
under which they were made) not misleading, except to the extent that any such
Damages arise out of or are based upon an
16
untrue statement or omission or alleged untrue statement or omission that has
been made therein or omitted therefrom in reliance upon and in conformity with
the information furnished in writing to the Company by or on behalf of any
Underwriter through you or your counsel, expressly for use in connection
therewith or (ii) any inaccuracy in or breach of the representations and
warranties of the Company contained herein or any failure of the Company to
perform its obligations hereunder or under law; provided, however, that with
respect to any untrue statement or omission made in any Preliminary Prospectus,
the indemnity agreement contained in this paragraph shall not inure to the
benefit of any Underwriter (or to the benefit of any person controlling such
Underwriter or to any officer, director, employee or agent of any Underwriter)
from whom the person asserting any such Damages purchased the Shares concerned
if both (A) a copy of the Prospectus was not sent or given to such person at or
prior to the written confirmation of the sale of such Shares to such person as
required by the Act and (B) the untrue statement or omission in the Preliminary
Prospectus was corrected in the Prospectus. This indemnification shall be in
addition to any liability that the Company may otherwise have.
In addition to its other obligations under this Section 8, the Company
agrees that, as an interim measure during the pendency of any claim, action,
investigation, inquiry or other proceeding arising out of or based upon any
statement or omission, or any inaccuracy in the representations and warranties
of the Company herein or failure to perform its obligations hereunder, all as
set forth in this Section 8, the party against whom indemnification is being
sought will reimburse each Underwriter on a monthly basis for all reasonable
legal or other out-of-pocket expenses incurred in connection with investigating
or defending any such claim, action, investigation, inquiry or other proceeding
(to the extent documented by reasonably itemized invoices therefor),
notwithstanding the absence of a judicial determination as to the propriety and
enforceability of the obligation of the Company to reimburse each Underwriter
for such expenses and the possibility that such payments might later be held to
have been improper by a court of competent jurisdiction. To the extent that any
such interim reimbursement payment is so held to have been improper, each
Underwriter shall promptly return it to the person(s) from whom it was received.
Any such interim reimbursement payments that are not made to the Underwriters
within 30 days of a request for reimbursement shall bear interest compounded
daily at a rate determined on the basis of the base lending rate announced from
time to time by The Wall Street Journal from the date of such request.
If any action or claim shall be brought against any Underwriter or any
person controlling any Underwriter in respect of which indemnity may be sought
against the Company, such Underwriter or such controlling person shall promptly
notify in writing the party(s) against whom indemnification is being sought (the
"indemnifying party" or "indemnifying parties"), and such indemnifying party(s)
shall assume the defense thereof, including the employment of counsel reasonably
acceptable to such Underwriter or such controlling person and the payment of all
reasonable fees of and expenses incurred by such counsel. Such Underwriter or
any such controlling person shall have the right to employ separate counsel in
any such action and participate in the defense thereof, but the fees and
expenses of such counsel shall be at the expense of such Underwriter or such
controlling person, unless (i) the indemnifying party(s) has (have) agreed in
writing to pay such fees and expenses, (ii) the indemnifying party(s) has (have)
failed to assume the defense and employ counsel reasonably acceptable to the
Underwriter or such controlling person or (iii) the named parties to any such
action (including any impleaded parties) include both such Underwriter or such
controlling person and the indemnifying party(s),
17
and such Underwriter or such controlling person shall have been advised by its
counsel that one or more legal defenses may be available to the Underwriter that
may not be available to the Company, or that representation of such indemnified
party and any indemnifying party(s) by the same counsel would be inappropriate
under applicable standards of professional conduct (whether or not such
representation by the same counsel has been proposed) due to actual or potential
differing interests between them (in which case the indemnifying party(s) shall
not have the right to assume the defense of such action on behalf of such
Underwriter or such controlling person (but the Company shall not be liable for
the fees and expenses of more than one counsel for the Underwriters and such
controlling persons)). The indemnifying party(s) shall not be liable for any
settlement of any such action effected without its (their several) written
consent, but if settled with such written consent, or if there be a final
judgment for the plaintiff in any such action, the indemnifying party(s)
agree(s) to indemnify and hold harmless any Underwriter and any such controlling
person from and against any loss, claim, damage, liability or expense by reason
of such settlement or judgment, but in the case of a judgment only to the extent
stated in the first paragraph of this Section 8.
Each Underwriter agrees, severally and jointly, to indemnify and hold
harmless the Company, its directors, its officers who sign the Registration
Statement and any person who controls the Company within the meaning of Section
15 of the Act or Section 20 of the Exchange Act, to the same extent as the
foregoing several indemnity from the Company to each Underwriter, but only with
respect to information furnished in writing by or on behalf of such Underwriter
through you or your counsel expressly for use in the Registration Statement, the
Prospectus or any Preliminary Prospectus, or any amendment or supplement
thereto. If any action or claim shall be brought or asserted against the
Company, any of its directors, any of its officers or any such controlling
person based on the Registration Statement, the Prospectus or any Preliminary
Prospectus, or any amendment or supplement thereto, and in respect of which
indemnity may be sought against any Underwriter pursuant to this paragraph, such
Underwriter shall have the rights and duties given to the Company by the
immediately preceding paragraph (except that if the Company shall have assumed
the defense thereof such Underwriter shall not be required to do so, but may
employ separate counsel therein and participate in the defense thereof, but the
fees and expenses of such counsel shall be at such Underwriter's expense), and
the Company, its directors, any such officers and any such controlling persons,
shall have the rights and duties given to the Underwriters by the immediately
preceding paragraph.
In any event, the Company will not, without the prior written consent
of the Representative, settle or compromise or consent to the entry of any
judgment in any proceeding or threatened claim, action, suit or proceeding in
respect of which the indemnification may be sought hereunder (whether or not the
Representative or any person who controls the Representative within the meaning
of Section 5 of the Act or Section 20 of the Exchange Act is a party to such
claim, action, suit or proceeding) unless such settlement, compromise or consent
includes an unconditional release of all Underwriters and such controlling
persons from all liability arising out of such claim, action, suit or
proceeding.
If the indemnification provided for in this Section 8 is unavailable or
insufficient for any reason whatsoever to an indemnified party in respect of any
Damages referred to herein, then an indemnifying party, in lieu of indemnifying
such indemnified party, shall contribute to the amount paid or payable by such
indemnified party as a result of such Damages (i) in such
18
proportion as is appropriate to reflect the relative benefits received by the
Company on the one hand, and the Underwriters on the other hand, from the
offering and sale of the Shares or (ii) if the allocation provided by clause (i)
above is not permitted by applicable law, in such proportion as is appropriate
to reflect not only the relative benefits referred to in clause (i) above but
also the relative and several fault of the Company on the one hand, and the
Underwriters on the other hand, in connection with the statements or omissions
that resulted in such Damages as well as any other relevant equitable
considerations. The relative and several 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 net 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 in the table
on the cover page of the Prospectus; provided that, in the event that the
Underwriters shall have purchased any Additional Shares hereunder, any
determination of the relative benefits received by the Company or the
Underwriters from the offering of the Shares shall include the net proceeds
(before deducting expenses) received by the Company and the underwriting
discounts and commissions received by the Underwriters, from the sale of such
Additional Shares, in each case computed on the basis of the respective amounts
set forth in the notes to the table on the cover page of the Prospectus. The
relative fault of the Company on the one hand, and the Underwriters on the other
hand, 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 by the Underwriters on the other hand and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission.
The Company and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section 8 was determined by a pro
rata 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 in the immediately preceding paragraph.
The amount paid or payable by an indemnified party as a result of the Damages
referred to in the immediately preceding paragraph shall be deemed to include,
subject to the limitations set forth above, 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
Section 8, no Underwriter shall be required to contribute any amount in excess
of the amount of the underwriting commissions received by such underwriter in
connection with the Shares underwritten by it and distributed to the public. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The Underwriters' obligations to
contribute pursuant to this Section 8 are several in proportion to the
respective numbers of Firm Shares set forth opposite their names in Schedule I
hereto (or such numbers of Firm Shares increased as set forth in Section 10
hereof) and not joint.
Notwithstanding the second paragraph of this Section 8, any Damages for
which an indemnified party is entitled to indemnification or contribution under
this Section 8 shall be paid by the indemnifying party to the indemnified party
as Damages are incurred after receipt of reasonably itemized invoices therefor.
The indemnity, contribution and reimbursement agreements contained in this
Section 8 and the representations and warranties of the Company
19
set forth in this Agreement shall remain operative and in full force and effect,
regardless of (i) any investigation made by or on behalf of any Underwriter or
any person controlling any Underwriter, the Company, its directors or officers
or any person controlling the Company, (ii) acceptance of any Shares and payment
therefor hereunder and (iii) any termination of this Agreement. A successor to
any Underwriter or any person controlling any Underwriter, or to the Company,
its directors or officers or any person controlling the Company, shall be
entitled to the benefits of the indemnity, contribution and reimbursement
agreements contained in this Section 8.
It is agreed that any controversy arising out of the operation of the
interim reimbursement arrangements set forth in the second paragraph of this
Section 8, including the amounts of any requested reimbursement payments and the
method of determining such amounts, shall be settled by arbitration conducted
pursuant to the Code of Arbitration Procedure of the NASD. Any such arbitration
must be commenced by service of a written demand for arbitration or written
notice of intention to arbitrate, therein electing the arbitration tribunal. In
the event the party demanding arbitration does not make such designation of an
arbitration tribunal in such demand or notice, then the party responding to said
demand or notice is authorized to do so. Such an arbitration would be limited to
the operation of the interim reimbursement provisions contained in the second
and fourth paragraphs of this Section 8, and would not resolve the ultimate
propriety or enforceability of the obligation to reimburse expenses that is
created by the provisions of the second paragraph of this Section 8.
9. Conditions of Underwriters' Obligations. The several obligations of
the Underwriters to purchase the Firm Shares hereunder are subject to the
following conditions:
(a) The Registration Statement shall have become effective not
later than 12:00 noon, New York City time, on the date hereof, or at such later
date and time as shall be consented to in writing by the Representative, and all
filings required by Rules 424(b), 430A and 462 under the Act shall have been
timely made.
(b) You shall be reasonably satisfied that since the
respective dates as of which information is given in the Registration Statement
and Prospectus, (i) there shall not have been any change in the capital stock of
the Company other than pursuant to Permitted Plans described in the Prospectus
or any material change in the indebtedness (other than in the ordinary course of
business) of the Company, (ii) except as set forth or contemplated by the
Registration Statement or the Prospectus, no material oral or written agreement
or other transaction shall have been entered into by the Company that is not in
the ordinary course of business or that could reasonably be expected to result
in a material reduction in the future earnings of the Company, (iii) no loss or
damage (whether or not insured) to the property of the Company shall have been
sustained that had or could reasonably be expected to have a Material Adverse
Effect, (iv) no legal or governmental action, suit or proceeding affecting the
Company or any of its properties that is material to the Company or that affects
or could reasonably be expected to affect the transactions contemplated by this
Agreement shall have been instituted or threatened and (v) there shall not have
been any material change in the condition (financial or otherwise), business,
management, results of operations or prospects of the Company or its
Subsidiaries that makes it impractical or inadvisable in your judgment to
proceed with the public offering or purchase of the Shares as contemplated
hereby.
20
(c) You shall have received on the Closing Date (and the
Additional Closing Date, if any) an opinion of Xxxxxxxxx Xxxxxx PLLC, counsel to
the Company, substantially to the effect that:
(i) The Company has been duly incorporated and is
validly existing and in good standing under the laws of the State of
Michigan, and is duly registered as a bank holding company under the
BHC Act. Each of Mercantile Bank of West Michigan, Mercantile Bank
Mortgage Company, Mercantile BIDCO, Inc. and Mercantile Insurance
Center, Inc. (the "Michigan Subsidiaries") is validly existing and in
good standing under the laws of the State of Michigan. To our
knowledge, neither the Company nor any of the Michigan Subsidiaries is
qualified to transact business in any jurisdiction other than the State
of Michigan. Each of the Company and the Michigan Subsidiaries has full
corporate power and authority to own or lease its properties and to
conduct its business as such business is described in the Prospectus.
To our knowledge, all outstanding shares of capital stock of each of
the Michigan Subsidiaries have been duly authorized and validly issued
and are fully paid and nonassessable except to the extent such shares
of capital stock of the Bank may be deemed assessable under 12 U.S.C.
Section 1831o, or Sections 3803 and 3807 of the Michigan Banking Code,
and are owned by the Company directly or indirectly through one or more
subsidiaries, free and clear of any perfected security interest or any
other lien, adverse claim, equity or other encumbrance and, to our
knowledge, except as disclosed in the Prospectus, there are no
outstanding rights, options or warrants to purchase any such shares or
securities convertible into or exchangeable for any such shares. MBWM
Capital Trust I (the "Trust") is not required to be authorized to
transact business in the State of Michigan in order to engage in the
activities contemplated in the Amended and Restated Trust Agreement
dated as of September 17, 1999 (the "Trust Agreement"). To our
knowledge, all of the issued and outstanding common securities of the
Trust are owned by the Company, free and clear of any perfected
security interest or any other lien, adverse claim, equity or other
encumbrance. To our knowledge, the Trust is not a party to or otherwise
bound by any agreement other than those contemplated by the Trust
Agreement.
(ii) The authorized capital stock of the Company as
of June 30, 2003, is as set forth under the caption "Capitalization" in
the Prospectus. To our knowledge, the capital stock of the Company
outstanding immediately prior to the issuance of the Shares has been
duly authorized and validly issued, and is fully paid and
nonassessable, and to our knowledge, is not subject to any preemptive
or similar rights to subscribe for or purchase any Shares upon the
issuance thereof by the Company. The form of certificates which may be
used to evidence the Shares has been approved by the Company and is in
due and proper form and complies with all applicable requirements. To
our knowledge, there are no outstanding rights, options or warrants to
purchase, no other outstanding securities convertible into or
exchangeable for, and no commitments, existing approved plans or
arrangements to issue, any shares of capital stock of the Company
except as described in or contemplated by the Prospectus or pursuant to
[__________] (the "Company Plans") described in the Prospectus.
(iii) All necessary corporate action required to be
taken by the Company for the authorization, issuance, sale and delivery
of the Shares in accordance
21
with the terms and conditions set forth in this Underwriting Agreement
have been duly authorized, validly and sufficiently taken. The Shares
have been duly and validly authorized, and when issued and sold in
accordance with this Underwriting Agreement, the Shares will be fully
paid and nonassessable. The Common Stock of the Company has been
approved for quotation on NASDAQ, and no further action is required to
render the Shares eligible for trading therein upon issuance. There are
no preemptive or, except pursuant to Company Plans, other rights to
subscribe for or to purchase, and other than as disclosed in the
Prospectus, no restrictions upon the voting or transfer of, any shares
of capital stock or equity securities of the Company or the Michigan
Subsidiaries pursuant to the articles of incorporation or by-laws of
the Company or the Michigan Subsidiaries, or, to our knowledge, any
agreement or other instrument to which either the Company or any of the
Michigan Subsidiaries is a party or by which either the Company or any
of the Michigan Subsidiaries may be bound; except those restrictions
set forth in sections [___________] of the Subordinated Indenture,
dated as of September 17, 1999, between the Company as issuer and
Wilmington Trust Company as trustee, relating to the Company's 9.60%
junior subordinated debentures due 2029.
(iv) The Company has all requisite corporate power to
enter into and perform its obligations under this Underwriting
Agreement and to issue, sell and deliver the Shares to be sold by it to
the Underwriters as provided herein, and this Underwriting Agreement
has been duly and validly authorized, executed and delivered by the
Company.
(v) To our knowledge, neither the Company nor any of
the Michigan Subsidiaries is in violation of its respective articles of
incorporation or by-laws, to the extent, in each case, that any
violation would reasonably be expected to have a material adverse
effect on the Company and the Subsidiaries taken as a whole. The
execution, delivery and performance by the Company of this Underwriting
Agreement and the consummation of the transactions contemplated by this
Underwriting Agreement (a) do not violate the respective articles of
incorporation and by-laws of the Company or the Michigan Subsidiaries,
and (b) to our knowledge, will not result in the imposition of any
lien, charge, encumbrance or restriction upon any property or assets of
the Company or the Michigan Subsidiaries, or constitute a breach of or
default under, with or without notice or lapse of time or both, any
material contract, indenture, mortgage, deed of trust, loan or credit
agreement, note, lease, or other agreement known to us, to which the
Company or any Michigan Subsidiary is a party or by which any of their
respective properties is bound, or to our knowledge, constitute a
violation of any order, decree, judgment, rule, or regulation of any
court, arbitrator, government, or governmental agency or
instrumentality, domestic or foreign, known to us having jurisdiction
over the Company or the Michigan Subsidiaries, or any of their
respective properties, to the extent, in each case, that any such
violation, conflict, default or lien would reasonably be expected to
have a material adverse effect on the Company and the Subsidiaries
taken as a whole. To our knowledge, the execution and delivery of this
Underwriting Agreement by the Company and the sale of the Shares by the
Company to the Underwriters as contemplated by this Underwriting
Agreement does not constitute a violation of any laws applicable to the
Company.
22
(vi) To our knowledge, holders of securities of the
Company either do not have any right that, if exercised, would require
the Company to cause such securities to be included in the Registration
Statement or have waived such right. To our knowledge, the Company is
not a party to any agreement or other instrument which grants rights
for or relating to the registration of any securities of the Company.
(vii) Except as set forth in the Registration
Statement and the Prospectus, and to our knowledge, (i) no action,
suit, investigation or proceeding at law or in equity is pending or
threatened in writing to which the Company, the Michigan Subsidiaries
or the Trust is or is threatened to be made a party, and (ii) no
action, suit or proceeding is pending or threatened in writing against
or affecting the Company, the Michigan Subsidiaries or the Trust or any
of their respective properties, before or by any court or governmental
official, commission, board or other administrative agency, authority
or body, or any arbitrator, wherein an unfavorable decision, ruling or
finding is reasonably expected and would have a material adverse effect
on the consummation of this Underwriting Agreement or the issuance and
sale of the Shares as contemplated by this Underwriting Agreement or
the financial condition, earnings, affairs, business, or results of
operations of the Company and the Subsidiaries on a consolidated basis
or which is required to be disclosed in the Registration Statement or
the Prospectus and is not so disclosed.
(viii) No authorization, approval, consent or order
of or filing, registration or qualification with any person, court,
governmental body, agency or authority is required in connection with
the transactions contemplated by the Underwriting Agreement, the
Registration Statement and the Prospectus, except such as have been
obtained under the Act, the Exchange Act, or state securities laws, and
except such as may be required under Interpretations or Rules of the
NASD in connection with the purchase and distribution of the Shares by
the Underwriters and from or with NASDAQ relating to the listing of the
Shares.
(ix) The Registration Statement and the Prospectus
and any amendments or supplements thereto (other than the financial
statements or other financial data included therein or omitted
therefrom and Underwriters' Information, as to which we express no
opinion) comply as to form in all material respects with the
requirements of the Act as of their respective dates of effectiveness
or issuance; the conditions for the use by the Company of Form S-3 have
been satisfied; and, as of the date they were filed with the
Commission, the documents incorporated by reference into the Prospectus
complied as to form in all material respects with the requirements of
the Exchange Act.
(x) To our knowledge, there are no contracts,
agreements, leases or other documents of a character required to be
disclosed in the Registration Statement or Prospectus or to be filed as
exhibits to the Registration Statement that are not so disclosed or
filed.
(xi) The statements under the captions "Business --
Regulation and Supervision" in the Company's Form 10-K for the fiscal
year ended December 31, 2002, insofar as such statements constitute a
summary of legal and regulatory matters,
23
documents or instruments referred to therein, are accurate descriptions
of the matters purported to be summarized therein in all material
respects and fairly present the information called for with respect to
such legal matters, documents and instruments.
(xii) We have been orally advised by the staff of the
Commission that the Registration Statement has become effective under
the Act; any required filing of the Prospectus pursuant to Rule 424(b)
under the Act has been made within the time period required by Rule
424(b); to our knowledge, no stop order suspending the effectiveness of
the Registration Statement has been issued and no proceedings for a
stop order are pending or threatened by the Commission.
(xiii) Except as described in or contemplated by the
Prospectus, to our knowledge, there are no contractual encumbrances or
restrictions, or material legal restrictions required to be described
therein on the legal right of (a) the Company or the Michigan
Subsidiaries to pay dividends or make any other distributions on its
capital stock or to pay indebtedness owed to the Company; (b) the Bank
to make any loans or advances to, or investments in, the Company or (c)
the Michigan Subsidiaries to transfer any of their property or assets
to the Company.
(xiv) The Company is not and, after giving effect to
the offering and sale of the Shares and the application of the proceeds
thereof as described in the Prospectus, the Company will not be, an
"investment company" as defined in the Investment Company Act of 1940.
(xv) To our knowledge: (a) the Company and the
Michigan Subsidiaries possess all Permits that are required under the
BHC Act, the Federal Deposit Insurance Act, the Michigan Banking Code,
the Michigan Insurance Code, the Michigan BIDCO Act, the Michigan
Mortgage Brokers, Lenders and Servicers Licensing Act and all rules and
regulations, respectively promulgated under each such statute
(collectively, "Permit Laws"), to conduct their respective businesses
as described in the Prospectus and that are material to the Company and
the Subsidiaries on a consolidated basis, except in those instances
where the loss thereof or non-compliance therewith would not reasonably
be expected to have a material adverse effect on the financial
condition, earnings, affairs, business, or results of operations of the
Company and the Subsidiaries on a consolidated basis; (b) all Permits
referred to in clause (a) are valid and in full force and effect; and
(c) no action, suit or proceeding is pending or overtly threatened
which may lead to the revocation, termination, suspension or
non-renewal of any Permit referred to in clause (a), except in those
instances where the loss thereof or non-compliance therewith would not
materially impair the ability of the Company or the Subsidiaries to
conduct their respective businesses.
In rendering such opinion, counsel may rely, to the extent they deem
such reliance proper, as to matters of fact upon certificates of officers of the
Company and of government officials. Copies of all such certificates shall be
furnished to you and your counsel on the Closing Date and the Additional Closing
Date, as the case may be.
24
In addition to the opinion set forth above, such counsel shall state
that during the course of his participation in the preparation of the
Registration Statement and the Prospectus and the amendments thereto, nothing
has come to the attention of such counsel that has caused him to believe that
the Registration Statement or the Prospectus or any amendment thereto (except
for the financial statements and other financial and accounting information
contained therein or omitted therefrom as to which no opinion need be
expressed), at the date thereof, 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 Registration
Statement or the Prospectus as of the date of the opinion (except as aforesaid),
contains an 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.
(d) You shall have received on the Closing Date or Additional
Closing Date, as the case may be, an opinion of Vedder, Price, Xxxxxxx &
Kammholz, P.C., as counsel for the Underwriters, dated the Closing Date or
Additional Closing Date, as the case may be, with respect to the issuance and
sale of the Shares, the Registration Statement and other related matters as you
may reasonably request, and the Company shall have furnished or shall cause to
have been furnished to your counsel such documents as they may reasonably
request for the purpose of enabling them to pass upon such matters.
(e) You shall have received letters addressed to you and dated
the date hereof and the Closing Date or the Additional Closing Date, as the case
may be, from (i) the firm of Xxxxx Xxxxxx and Company LLC, independent certified
public accountants and (ii) the Chief Executive Officer and Chief Financial
Officer of the Company, substantially in the forms heretofore approved by you.
(f) (i) No stop order suspending the effectiveness of the
Registration Statement shall have been issued by the Commission and no
proceedings for that purpose shall be pending or, to the knowledge of the
Company, shall be threatened or contemplated by the Commission at or prior to
the Closing Date or Additional Closing Date, as the case may be; (ii) no order
suspending the effectiveness of the Registration Statement or the qualification
or registration of the Shares under the securities or Blue Sky laws of any
jurisdiction shall be in effect and no proceeding for such purpose shall be
pending or, to the knowledge of the Company, threatened or contemplated by the
authorities of any jurisdiction; (iii) any request for additional information on
the part of the staff of the Commission or any such authorities shall have been
complied with to the satisfaction of the staff of the Commission or such
authorities; (iv) after the date hereof, no amendment or supplement to the
Registration Statement or the Prospectus shall have been filed unless a copy
thereof was first submitted to you and your counsel and you and your counsel did
not object thereto in good faith; and (v) all of the representations and
warranties of the Company contained in this Agreement shall be true and correct
in all material respects (except for such representations and warranties
qualified by materiality, which representations and warranties shall be true and
correct in all respects) on and as of the date hereof and on and as of the
Closing Date or Additional Closing Date, as the case may be, as if made on and
as of the Closing Date or Additional Closing Date, as the case may be, and you
shall have received a certificate, dated the Closing Date and signed by the
chief executive officer and the chief financial officer of the Company (or such
other officers as are acceptable to you) to the effect set forth in this Section
9(f) and in Sections 9(b) and 9(g) hereof.
25
(g) The Company shall not have failed in any material respect
at or prior to the Closing Date or the Additional Closing Date, as the case may
be, to have performed or complied with any of its agreements herein contained
and required to be performed or complied with by it hereunder at or prior to the
Closing Date or Additional Closing Date, as the case may be.
(h) The Company shall have furnished or caused to have been
furnished to you such further certificates and documents as you shall have
reasonably requested.
(i) At or prior to the Closing Date, you shall have received
the written Lock-Up Agreements from each of the Company's executive officers and
directors not to directly or indirectly (i) sell, offer or contract to sell or
otherwise dispose of or transfer any shares of Company Securities, whether now
owned or acquired after the date hereof, or with respect to which the power of
disposition is acquired after the date of the Prospectus, or file any
registration statement under the Act with respect to the foregoing or (ii) enter
into any swap or any other agreement that transfers, in whole or in part,
directly or indirectly, the economic consequences of ownership of Company
Securities whether any such swap or transaction is to be settled by delivery of
Company Securities, in cash or otherwise, other than as provided in such written
commitment, before the expiration of 90 days from the effective date of the
Registration Statement, without the prior written consent of Xxxxxxx Xxxxx &
Associates, Inc.
(j) At or prior to the effective date of the Registration
Statement, you shall have received a letter from the Corporate Financing
Department of the NASD confirming that such Department has determined to raise
no objections with respect to the fairness or reasonableness of the underwriting
terms and arrangements of the offering contemplated hereby.
All such opinions, certificates, letters and other documents will be in
compliance with the provisions hereof only if they are reasonably satisfactory
in form and substance to you and your counsel.
The several obligations of the Underwriters to purchase Additional
Shares hereunder are subject to the satisfaction on and as of the Additional
Closing Date of the conditions set forth in this Section 9, except that, if the
Additional Closing Date is other than the Closing Date, the certificates,
opinions and letters referred to in this Section 9 shall be dated as of the
Additional Closing Date and the opinions called for by paragraphs (c) and (d)
shall be revised to reflect the sale of Additional Shares.
If any of the conditions hereinabove provided for in this Section 9
shall not have been satisfied when and as required by this Agreement, this
Agreement may be terminated by you by notifying the Company of such termination
in writing or by telegram at or prior to such Closing Date, but you shall be
entitled to waive any of such conditions.
10. Effective Date of Agreement. This Agreement shall become effective
upon the later of (a) the execution and delivery hereof by the parties hereto
and (b) release of notification of the effectiveness of the Registration
Statement by the Commission; provided, however, that the provisions of Sections
7 and 8 shall at all times be effective.
26
11. Defaulting Underwriters. If any one or more of the Underwriters
shall fail or refuse to purchase Firm Shares that it or they have agreed to
purchase hereunder, and the aggregate number of Firm Shares that such defaulting
Underwriter or Underwriters agreed but failed or refused to purchase is not more
than one-tenth of the aggregate number of the Firm Shares, each non-defaulting
Underwriter shall be obligated, severally, in the proportion in which the number
of Firm Shares set forth opposite its name in Schedule I hereto bears to the
aggregate number of Firm Shares set forth opposite the names of all
non-defaulting Underwriters or in such other proportion as you may specify in
the Agreement Among Underwriters, to purchase the Firm Shares that such
defaulting Underwriter or Underwriters agreed, but failed or refused to
purchase. If any Underwriter or Underwriters shall fail or refuse to purchase
Firm Shares and the aggregate number of Firm Shares with respect to which such
default occurs is more than one-tenth of the aggregate number of Firm Shares and
arrangements satisfactory to you and the Company for the purchase of such Firm
Shares are not made within 48 hours after such default, this Agreement will
terminate without liability on the part of any non-defaulting Underwriter or the
Company. In any such case that does not result in termination of this Agreement,
either you or the Company shall have the right to postpone the Closing Date, but
in no event for longer than seven (7) days, in order that the required changes,
if any, in the Registration Statement and the Prospectus or any other documents
or arrangements may be effected. Any action taken under this paragraph shall not
relieve any defaulting Underwriter from liability in respect of any such default
of any such Underwriter under this Agreement.
12. Termination of Agreement. This Agreement shall be subject to
termination in your absolute discretion, without liability on the part of any
Underwriter to the Company by notice to the Company, if prior to the Closing
Date or the Additional Closing Date (if different from the Closing Date and then
only as to the Additional Shares), as the case may be, in your sole judgment,
(i) trading in the Company's Common Stock shall have been suspended by the
Commission or NASDAQ, (ii) trading in securities generally on the NYSE or NASDAQ
shall have been suspended or materially limited, or minimum or maximum prices
shall have been generally established on such exchange, or additional material
governmental restrictions, not in force on the date of this Agreement, shall
have been imposed upon trading in securities generally by any such exchange or
by order of the Commission or any court or other governmental authority, (iii) a
general moratorium on commercial banking activities shall have been declared by
either federal, Michigan or New York State authorities or (iv) there shall have
occurred any outbreak or escalation of hostilities or other international or
domestic calamity, crisis or change in political, financial or economic
conditions or other material event the effect of which on the financial markets
of the United States is such as to make it, in your judgment, impracticable or
inadvisable to market the Shares or to enforce contracts for the sale of the
Shares. Notice of such cancellation shall be promptly given to the Company and
its counsel by telegraph, telecopy or telephone and shall be subsequently
confirmed by letter.
13. Information Furnished by the Underwriters. The Company acknowledges
that (i) the last paragraph on the cover page of the Prospectus and (ii) the
table following the first paragraph, and the third, tenth and eleventh
paragraphs and the twelve paragraph, except for the second sentence, under the
caption "Underwriting" in the Prospectus, constitute the only information
furnished by or on behalf of the Underwriters through you or on your behalf as
such information is referred to in Sections 6.1(a), 6.1(b) and 8 hereof.
27
14. Miscellaneous. Except as otherwise provided in Sections 5 and 12
hereof, notice given pursuant to any of the provisions of this Agreement shall
be in writing and shall be delivered
(i) to the Company
Mercantile Bank Corporation
0000 Xxxxx Xxxxxx Xxx., X.X.
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxx, Xx.
with a copy to
Xxxxxxxxx Xxxxxx PLLC
000 Xxxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxxx
(ii) to the Underwriters
Xxxxxxx Xxxxx & Associates, Inc.
000 Xxxx Xxxxxxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxx
with a copy to
Vedder, Price, Xxxxxxx & Kammholz, P.C.
000 Xxxxx XxXxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000-0000
Attention: Xxxxxxxx X. Xxxxx
This Agreement has been and is made solely for the benefit of the
several Underwriters, the Company and its directors and officers.
15. Applicable Law; Counterparts. This Agreement shall be governed by
and construed in accordance with the laws of the State of Florida without
reference to choice of law principles thereunder.
This Agreement may be signed in various counterparts, which together
shall constitute one and the same instrument.
This Agreement shall be effective when, but only when, at least one
counterpart hereof shall have been executed on behalf of each party hereto.
28
The Company and the Underwriters each hereby irrevocably waive any
right they may have to a trial by jury in respect to any claim based upon or
arising out of this Agreement or the transactions contemplated hereby.
Please confirm that the foregoing correctly sets forth the agreement
among the Company and the several Underwriters.
Very truly yours,
MERCANTILE BANK CORPORATION
---------------------------------------
Xxxxxx X. Xxxxxxx, Xx.
Chairman and Chief Executive Officer
CONFIRMED and AGREED as of the date first above
mentioned, on behalf of the Representative
and the other several Underwriters named in
Schedule I hereto.
XXXXXXX XXXXX & ASSOCIATES, INC.
By:
------------------------------------
Authorized Representative
29
SCHEDULE I
Number
Name Firm Shares
---- -----------
Xxxxxxx Xxxxx & Associates, Inc...........................................................
Xxxxxx, Xxxxxxxx & Company, Incorporated..................................................
Xxxxxxxxxxx & Co. Inc.....................................................................
---------
TOTAL: 1,000,000
=========
30
SCHEDULE II
SUBSIDIARIES OF THE COMPANY
State or Jurisdiction of
Name Incorporation or Charter
---- ------------------------
Mercantile Bank of West Michigan Michigan
Mercantile Bank Mortgage Company Michigan
Mercantile BIDCO, Inc. Michigan
Mercantile Insurance Center, Inc. Michigan
MBWM Capital Trust I Delaware
31
EXHIBIT A
September __, 2003
MERCANTILE BANK CORPORATION
0000 Xxxxx Xxxxxx Xxx., X.X.
Xxxxxxx, Xxxxxxxx 00000
XXXXXXX XXXXX & ASSOCIATES, INC.
As Representative of the Several Underwriters
c/o Raymond Xxxxx & Associates, Inc.
000 Xxxxxxxx Xxxxxxx
Xx. Xxxxxxxxxx, XX 00000
RE: MERCANTILE BANK CORPORATION (THE "COMPANY") -- LOCK-UP
AGREEMENT
Ladies and Gentlemen:
This letter is delivered to you pursuant to the Underwriting Agreement
(the "Underwriting Agreement") to be entered into by the Company, as issuer, and
Xxxxxxx Xxxxx & Associates, Inc., the representative (the "Representative") of
certain underwriters (the "Underwriters") to be named therein. Upon the terms
and subject to the conditions of the Underwriting Agreement, the Underwriters
intend to effect a public offering of Common Stock, no par value, of the Company
(the "Shares"), as described in and contemplated by the registration statement
of the Company on Form S-3, File No. 333-107814 (as the same may be hereafter
amended, the "Registration Statement"), as filed with the Securities and
Exchange Commission on August 8, 2003 (the "Offering").
The undersigned recognizes that it is in the best financial interests
of the undersigned, as an officer or director, or an owner of stock, options,
warrants or other securities of the Company (the "Company Securities"), that the
Company complete the proposed Offering.
The undersigned further recognizes that the Company Securities held by
the undersigned are, or may be, subject to certain restrictions on
transferability, including those imposed by United States federal securities
laws. Notwithstanding these restrictions, the undersigned has agreed to enter
into this letter agreement to further assure the Underwriters that the Company
Securities of the undersigned, now held or hereafter acquired, will not enter
the public market at a time that might impair the underwriting effort.
Therefore, as an inducement to the Underwriters to execute the
Underwriting Agreement, the undersigned hereby acknowledges and agrees that the
undersigned will not (i) directly or indirectly, offer, sell, contract to sell,
pledge, grant any option to purchase or otherwise dispose of (collectively, a
"Disposition") any Company Securities, or any securities convertible into or
exercisable or exchangeable for, or any rights to purchase or otherwise acquire,
any Company Securities held or owned of record or beneficially by the
undersigned on or acquired by the undersigned after the date hereof,
(collectively, the "Lock-Up Shares"), for a period commencing on the date hereof
and ending 90 days after the effective date of the Registration Statement,
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inclusive (the "Lock-Up Period"), without the prior written consent of Xxxxxxx
Xxxxx & Associates, Inc. or (ii) exercise or seek to exercise or effectuate in
any manner any rights of any nature that the undersigned has or may have
hereafter to require the Company to register under the Act the undersigned's
sale, transfer or other disposition of any of the Lock-Up Shares or other
securities of the Company held by the undersigned, or to otherwise participate
as a selling securityholder in any manner in any registration effected by the
Company under the Act, including under the Registration Statement, during the
Lock-Up Period. The foregoing restrictions are expressly agreed to preclude the
undersigned from engaging in any hedging, collar (whether or not for any
consideration) or other transaction that is designed to or reasonably expected
to lead or result in a Disposition of Lock-Up Shares during the Lock-Up Period,
even if such Lock-Up Shares would be disposed of by someone other than such
holder. Such prohibited hedging or other transactions as referred to in the
prior sentence would include any short sale or any purchase, sale or grant of
any right (including any put or call option or reversal or cancellation thereof)
with respect to any Lock-Up Shares or with respect to any security (other than a
broad-based market basket or index) that includes, relates to or derives any
significant part of its value from Lock-Up Shares.
Notwithstanding the agreement not to make any Disposition during the
Lock-Up Period, you have agreed that the foregoing restrictions shall not apply
to:
(1) the Company Securities being offered in the prospectus included in
the Registration Statement;
(2) any grant or exercise of options pursuant to the Company's stock
option plans, or the surrender of Company Securities to the Company as
consideration paid to exercise any or all of the undersigned's options to
purchase Company Securities granted by the Company; or
(3) any Company Securities transferred by the undersigned pursuant to a
bona fide gift, provided that the donee agrees to be bound by the terms of this
Lock-up Agreement unless otherwise agreed to by the Representative.
It is understood that, if the Underwriting Agreement (other than the
provisions thereof that survive termination) shall terminate or be terminated
prior to payment for and delivery of the Shares, you will release the
undersigned from the obligations under this letter agreement.
In furtherance of the foregoing, the Company and its transfer agent are
hereby authorized to decline to make any transfer of Lock-Up Shares if such
transfer would constitute a violation or breach of this letter. This letter
shall be binding on the undersigned and the respective successors, heirs,
personal representatives and assigns of the undersigned. Capitalized terms used
but not defined herein have the respective meanings assigned to such terms in
the Underwriting Agreement.
Very truly yours,
Signature of Securityholder
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