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EXHIBIT 1
XXXXXXX FINANCIAL SERVICES CORPORATION
1,000,000 SHARES*
COMMON STOCK
UNDERWRITING AGREEMENT
________, 1997
Xxxxx & Co., L.L.C.
As representative of the several Underwriters
named in Schedule I hereto,
c/x Xxxxx & Co., L.L.C.,
Xxx Xxxxxxxx
Xxxxxxx, Xxxxxxxx 00000
Ladies and Gentlemen:
Xxxxxxx Financial Services Corporation, a Michigan corporation (the
"Company"), proposes, subject to the terms and conditions stated herein, to
issue and sell to the Underwriters named in Schedule I hereto (the
"Underwriters") an aggregate of 1,000,000 shares (the "Firm Shares") of the
Company's Common Stock (the "Common Stock") and up to an aggregate of 150,000
shares (the "Optional Shares") of Common Stock (the Firm Shares and the
Optional Shares that the Underwriters elect to purchase pursuant to Section 2
hereof being collectively referred to as the "Shares").
1. (a) The Company represents and warrants to, and agrees
with, each of the Underwriters that:
(i) A registration statement on Form S-1 (File No.
333-34453) as amended by any pre-effective amendment thereto in
respect of the Shares (the "Initial Registration Statement") has been
filed with the Securities and Exchange Commission (the "Commission");
the Initial Registration Statement and any post-effective amendment
thereto, each in the form heretofore delivered to you, and, excluding
exhibits thereto, as the same may have been amended from time to time,
to each of the other Underwriters, have been declared effective by the
Commission in such form; other than a registration statement, if any,
increasing the size of the offering (a "Rule 462(b) Registration
Statement"), filed pursuant to Rule 462(b) under the Securities Act of
1933, as amended (the "Act"), which became effective upon filing, no
other document with respect to the Initial Registration Statement has
heretofore been filed with the Commission; and no stop
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*Plus an option to acquire from the Company up to 150,000 additional shares to
cover overallotments.
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order suspending the effectiveness of the Initial Registration
Statement, any post-effective amendment thereto or the Rule 462(b)
Registration Statement, if any, has been issued and no proceeding for
that purpose has been initiated or, to the knowledge of the Company,
threatened by the Commission (any preliminary prospectus included in
the Initial Registration Statement or filed with the Commission
pursuant to Rule 424(a) of the rules and regulations of the Commission
under the Act, as amended, is hereinafter called a "Preliminary
Prospectus;" the various parts of the Initial Registration Statement
and the Rule 462(b) Registration Statement, if any, including all
exhibits thereto and including the information contained in the form
of final prospectus filed with the Commission pursuant to Rule 424(b)
under the Act in accordance with Section 5(a) hereof and deemed by
virtue of Rule 430A under the Act to be part of the Initial
Registration Statement at the time it was declared effective or such
part of the Rule 462(b) Registration Statement, if any, became or
hereafter becomes effective, each as amended at the time such part of
the registration statement became effective, is hereinafter
collectively called the "Registration Statement;" and such final
prospectus, in the form first filed pursuant to Rule 424(b) under the
Act, is hereinafter called the "Prospectus");
(ii) No order preventing or suspending the use of any
Preliminary Prospectus has been issued by the Commission, and each
Preliminary Prospectus, at the time of filing thereof, conformed in
all material respects to the requirements of the Act and the rules and
regulations of the Commission thereunder, and did not contain an
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made,
not misleading; provided, however, that this representation and
warranty shall not apply to any statements or omissions made in
reliance upon and in conformity with information furnished in writing
to the Company by an Underwriter through Xxxxx & Co., L.L.C.
expressly for use therein; and
(iii) The Registration Statement conforms, and the
Prospectus and any further amendments or supplements to the
Registration Statement or the Prospectus will conform, in all material
respects to the requirements of the Act and the rules and regulations
of the Commission thereunder and do not and will not, as of the
applicable effective date of the Registration Statement and any
amendment thereto, and as of the applicable filing date of the
Prospectus and any amendment or supplement thereto, 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; provided, however, that this representation and warranty
shall not apply to any statements or omissions made in reliance upon
and in conformity with information furnished in writing to the Company
by an Underwriter through Xxxxx & Co., L.L.C. expressly for use
therein;
(b) The Company represents and warrants to, and agrees with, each
of the Underwriters that:
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(i) Since the respective dates as of which information is
given in the Registration Statement and the Prospectus, there has not
been any material adverse change in or affecting the general affairs,
management, financial position, stockholders' equity, results of
operations or prospects of the Company, otherwise than as set forth or
contemplated in the Prospectus;
(ii) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State
of Michigan, with power and authority (corporate and other) to own its
properties and conduct its business as described in the Prospectus,
and has been duly qualified as a foreign corporation for the
transaction of business and is in good standing under the laws of each
other jurisdiction in which it owns or leases properties, or conducts
any business so as to require such qualification or is subject to no
material liability or disability by reason of the failure to be so
qualified in any such jurisdiction;
(iii) The Company has an authorized capitalization as set
forth in the Prospectus, and all of the issued shares of capital stock
of the Company have been duly and validly authorized and issued and
are fully paid and nonassessable;
(iv) The Shares have been duly and validly authorized and,
when issued and delivered against payment therefor as provided herein,
will be duly and validly issued and fully paid and nonassessable and
will conform in all material respects to the description of the Common
Stock contained in the Prospectus;
(v) The issue and sale of the Shares by the Company and
the compliance by the Company with all of the provisions of this
Agreement and the consummation of the transactions herein contemplated
will not conflict with or result in a breach or violation of any of
the terms or provisions of, or constitute a default under, any
indenture, mortgage, deed of trust, loan agreement or other agreement
or instrument to which the Company is a party or by which the Company
is bound or to which any of the property or assets of the Company is
subject, nor will such action result in any violation of the
provisions of the Articles of Incorporation (or other charter
document) or By-laws of the Company or any statute or any order, rule
or regulation of any court or governmental agency or body having
jurisdiction over the Company or any of its properties; and no
consent, approval, authorization, order, registration or qualification
of or with any such court or governmental agency or body is required
for the issue and sale of the Shares or the consummation by the
Company of the transactions contemplated by this Agreement, except the
registration under the Act and such consents, approvals,
authorizations, registrations or qualifications as may be required
under state securities or Blue Sky laws in connection with the
purchase and distribution of the Shares by the Underwriters;
(vi) The Company is not in violation of its Articles of
Incorporation or By-laws or in default in the performance or
observance of any material obligation, agreement, covenant or
condition contained in any indenture, mortgage, deed of trust, loan
agreement,
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lease or other agreement or instrument to which it is a party or by
which it or any of its properties may be bound;
(vii) The statements set forth in the Prospectus under the
captions of "Description of Capital Stock," insofar as they purport to
constitute a summary of the terms of the capital stock of the Company,
and under the captions "The Business--Formation and Structure,"
"--Operations," "--Financing," "--Regulation and Supervision,"
"Certain Transactions" and "Underwriting," insofar as they purport to
describe the provisions of the laws and documents referred to therein,
are accurate, complete in all material respects and fair;
(viii) Other than as set forth in the Prospectus, there are
no legal or governmental proceedings pending to which the Company is a
party or of which any property of the Company is the subject which, if
determined adversely to the Company would individually or in the
aggregate have a material adverse effect on the financial position,
stockholders' equity or results of operations of the Company; and, to
the best of the Company's knowledge, no such proceedings are
threatened or contemplated by any governmental authorities or
threatened by others;
(ix) Each of the agreements listed in Annex II hereto has
been duly authorized, executed and delivered by the Company and
constitutes the valid and legally binding obligation of the Company
and is enforceable in accordance with its terms, subject to
bankruptcy, insolvency, reorganization, moratorium and similar laws of
general applicability relating to or affecting creditors' rights;
(x) The Company is not and, after giving effect to the
offering and sale of the Shares, will not be an "investment company"
or an entity "controlled" by an "investment company," as such terms
are defined in the Investment Company Act of 1940, as Amended (the
"Investment Company Act");
(xi) The Company does not do business with the government
of Cuba or with any person or affiliate located in Cuba within the
meaning of Section 517.075, Florida Statutes;
(xii) Coopers & Xxxxxxx L.L.P., who have certified certain
financial statements of the Company, are independent public
accountants as required by the Act and the rules and regulations of
the Commission thereunder;
(xiii) This Agreement has been duly authorized, executed and
delivered by the Company;
(xiv) There are no contracts or documents which are
required to be described in the Registration Statement or the
Prospectus or to be filed as exhibits thereto which have not been so
described and filed as required;
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(xv) No filing with, or authorization, approval, consent,
license, order, registration, qualification or decree of, any court or
governmental authority or agency is necessary or required for the
performance by the Company of its obligations hereunder, in connection
with the offering, issuance or sale of the Common Stock hereunder or
the consummation of the transactions contemplated by this Agreement,
except such as have been already obtained or as may be required under
the Act or the rules and regulations thereunder or state securities
laws;
(xvi) The Company possesses such permits, licenses,
approvals, consents, and other authorizations (collectively
"Governmental Licenses") issued by the appropriate federal, state,
local or foreign regulatory agencies or bodies necessary to conduct
the business now operated by it; the Company is in compliance with the
terms and conditions of all such Governmental Licenses, except where
the failure so to comply would not have a material adverse effect on
the financial position, stockholders' equity or results of operations
of the Company; all of the Governmental Licenses are valid and in full
force and effect, except where the invalidity of such Governmental
Licenses or the failure of such Governmental Licenses to be in full
force and effect would not have a material adverse effect on the
financial position, stockholders' equity or results of operations of
the Company; the Company has not received any notice of proceedings
relating to the revocation or modification of any such Governmental
Licenses which singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would result in a material
adverse effect on the financial position, stockholders' equity or
results of operations of the Company;
(xvii) Except as described in the Registration Statement,
there are no persons with registration rights or other similar rights
to have any securities registered pursuant to the Registration
Statement or otherwise registered by the Company under the Act; and
2. Subject to the terms and conditions herein set forth, (a) the
Company agrees to issue and sell to each of the Underwriters, and each of the
Underwriters agrees, severally and not jointly, to purchase from the Company,
at a purchase price per share of $[ ] the number of Firm Shares set forth
opposite the name of such Underwriter in Schedule I hereto and (b) in the event
and to the extent that the Underwriters shall exercise the election to purchase
Optional Shares as provided below, the Company agrees to issue and sell to each
of the Underwriters, and each of the Underwriters agrees, severally and not
jointly, to purchase from the Company, at the purchase price per share set
forth in clause (a) of this Section 2, that portion of the number of Optional
Shares as to which such election shall have been exercised (to be adjusted by
you so as to eliminate fractional shares) determined by multiplying such number
of Optional Shares by a fraction, the numerator of which is the maximum number
of Optional Shares which such Underwriter is entitled to purchase as set forth
opposite the name of such Underwriter in Schedule I hereto and the denominator
of which is the maximum number of Optional Shares that all of the Underwriters
are entitled to purchase hereunder.
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The Company hereby grants to the Underwriters the right to purchase at
their election up to 150,000 Optional Shares, at the purchase price per share
set forth in the paragraph above, for the sole purpose of covering
overallotments in the sale of the Firm Shares. Any such election to purchase
Optional Shares may be exercised only by written notice from you to the
Company, given within a period of 30 business days after the date of this
Agreement, setting forth the aggregate number of Optional Shares to be
purchased and the date on which such Optional Shares are to be delivered, as
determined by you.
As compensation to the Underwriters for their commitments hereunder,
the Company at each Time of Delivery (as defined in Section 4 hereof) will pay
to Xxxxx & Co., L.L.C., for the accounts of the several Underwriters, an amount
equal to $.70 per share for the Shares to be delivered by the Company hereunder
at such Time of Delivery; provided that, with regard to the 25,000 Firm Shares
which have been reserved for sale to Sun Communities, Inc., the Company will
pay to Xxxxx & Co., L.L.C., for the account of the several Underwriters, an
amount equal to $.10 per share and with regard to the 75,000 Firm Shares which
have been reserved for sale to certain officers and directors of Sun
Communities, Inc., the Company will pay to Xxxxx & Co., L.L.C., for the account
of the several Underwriters, an amount equal to $.30 per share.
3. Upon the authorization by you of the release of the Firm
Shares, the several Underwriters propose to offer the Firm Shares for sale upon
the terms and conditions set forth in the Prospectus.
4. (a) The Shares to be purchased by each Underwriter
hereunder will be represented by one or more definitive certificates registered
in the name of Xxxxx & Co., L.L.C. which will be deposited by or on behalf of
the Company with The Depository Trust Company ("DTC") or its designated
custodian. The Company will deliver the Shares to Xxxxx & Co., L.L.C., for the
account of each Underwriter, against payment by or on behalf of such
Underwriter of the purchase price therefor by wire transfer to the account
specified by the Company in Federal (same day) funds, by causing DTC to credit
the Shares to the account of Xxxxx & Co., L.L.C. at DTC. The Company will
cause the certificates representing the Shares to be made available to Xxxxx &
Co., L.L.C. for checking at least twenty-four hours prior to the Time of
Delivery at the office of DTC or its designated custodian (the "Designated
Office"). The time and date of such delivery and payment shall be, with
respect to the Firm Shares, 9:30 A.M., Detroit time, on ______________, 1997 or
such other time and date as Xxxxx & Co., L.L.C. and the Company may agree upon
in writing, and, with respect to the Optional Shares, 9:30 A.M., Detroit time,
on the date specified by Xxxxx & Co., L.L.C. in the written notice given by
Xxxxx & Co., L.L.C. of the Underwriters' election to purchase such Optional
Shares, or such other time and date as Xxxxx & Co., L.L.C. and the Company may
agree upon in writing. Such time and date for delivery of the Firm Shares is
herein called the "First Time of Delivery," such time and date for delivery of
the Optional Shares, if not the First Time of Delivery, is herein called the
"Second Time of Delivery," and each such time and date for delivery is herein
called a "Time of Delivery."
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(b) The documents to be delivered at each Time of Delivery by or
on behalf of the parties hereto pursuant to Section 8 hereof, including the
cross-receipt for the Shares and any additional documents requested by the
Underwriters pursuant to Section 7(i) hereof, will be delivered at the offices
of Xxxxxxxx Xxxxxx Xxxxxxxx and Xxxx, 0000 Xxxxx Xxxxxxxx Xxxxxxxx, Xxxxxxx, XX
00000-0000 (the "Closing Location"), the Shares will be delivered at the
Designated Office, and the wire transfers will be made to the specified
accounts, all at such Time of Delivery. A meeting will be held at the Closing
Location at 2:00 P.M., Detroit time, on the Detroit Business Day next preceding
such Time of Delivery, at which meeting the final drafts of the documents to be
delivered pursuant to the preceding sentence will be available for review by
the parties hereto. For the purposes of this Section 4, "Detroit Business Day'
shall mean each Monday, Tuesday, Wednesday, Thursday and Friday which is not a
day on which banking institutions in Detroit are generally authorized or
obligated by law or executive order to close.
5. The Company agrees with each of the Underwriters:
(a) To prepare the Prospectus in a form approved by you and to
file such Prospectus pursuant to Rule 424(b) under the Act not later than the
Commission's close of business on the second business day following the
execution and delivery of this Agreement, or, if applicable, such earlier time
as may be required by Rule 430A(a)(3) under the Act; to make no further
amendment or any supplement to the Registration Statement or Prospectus which
shall be disapproved by you promptly after reasonable notice thereof; to advise
you, promptly after it receives notice thereof, of the time when any amendment
to the Registration Statement has been filed or becomes effective or any
supplement to the Prospectus or any amended Prospectus has been filed and to
furnish you with copies thereof; to advise you, promptly after it receives
notice thereof, of the issuance by the Commission of any stop order or of any
order preventing or suspending the use of any Preliminary Prospectus or
prospectus, of the suspension of the qualification of the Shares for offering
or sale in any jurisdiction, of the initiation or threatening of any proceeding
for any such purpose, or of any request by the Commission for the amending or
supplementing of the Registration Statement or Prospectus or for additional
information; and, in the event of the issuance of any stop order or of any
order preventing or suspending the use of any Preliminary Prospectus or
prospectus or suspending any such qualification, promptly to use every
reasonable effort to obtain the withdrawal of such order;
(b) Promptly from time to time to take such action as you may
reasonably request to qualify the Shares for offering and sale under the
securities laws of such jurisdictions as you may request and to comply with
such laws so as to permit the continuance of sales and dealings therein in such
jurisdictions for as long as may be necessary to complete the distribution of
the Shares, provided that in connection therewith the Company shall not be
required to qualify as a foreign corporation or to file a general consent to
service of process in any jurisdiction;
(c) As soon after the execution and delivery of this Agreement as
possible and thereafter from time to time for such period as delivery of a
Prospectus is required in connection with the offering or sale of the Shares,
to furnish the Underwriters with copies of the Prospectus in Detroit in such
quantities as you may from time to time reasonably request, and, if the
delivery
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of a prospectus is required at any time prior to the expiration of nine months
after the time of issue of the Prospectus in connection with the offering or
sale of the Shares and if at such time any event shall have occurred as a
result of which the Prospectus as then amended or supplemented would include an
untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made when such Prospectus is delivered, not
misleading, or, if for any other reason it shall be necessary during such
period to amend or supplement the Prospectus in order to comply with the Act,
to notify you and upon your request to prepare and furnish without charge to
each Underwriter and to any dealer in securities as many copies as you may from
time to time reasonably request of an amended Prospectus or a supplement to the
Prospectus which will correct such statement or omission or effect such
compliance, and in case any Underwriter is required to deliver a prospectus in
connection with sales of any of the Shares at any time nine months or more
after the time of issue of the Prospectus, upon your request but at the expense
of such Underwriter, to prepare and deliver to such Underwriter as many copies
as you may reasonably request of an amended or supplemented Prospectus
complying with Section 10(a)(3) of the Act;
(d) To make generally available to the Company's security holders
as soon as practicable, but in any event not later than eighteen months after
the effective date of the Registration Statement (as defined in Rule 158(c)
under the Act), an earnings statement of the Company complying with Section
11(a) of the Act and the rules and regulations thereunder (including, at the
option of the Company, Rule 158);
(e) During the period beginning from the date hereof and
continuing to and including the date 90 days after the date of the Prospectus,
not to offer, sell, contract to sell or otherwise dispose of, except as
provided hereunder, any securities of the Company that are substantially
similar to the Shares;
(f) To the extent necessary to comply with the NASD OTC Bulletin
Board rules and regulations or the rules and regulations of any other exchange
on which the Shares are listed, to furnish to holders of the Shares as soon as
practicable after the end of each fiscal year an annual report (including a
balance sheet and statements of income, stockholders, equity and cash flows of
the Company certified by independent public accountants) and, as soon as
practicable after the end of each of the first three quarters of each fiscal
year (beginning with the fiscal quarter ending after the effective date of the
Registration Statement), consolidated summary financial information of the
Company for such quarter in reasonable detail;
(g) During a period of three years from the effective date of the
Registration Statement, to furnish to you copies of all reports or other
communications (financial or other) furnished to stockholders of the Company,
and to deliver to you (i) as soon as they are available, copies of any reports
and financial statements furnished to or filed with the Commission or any
national securities exchange on which any class of securities of the Company is
listed; and (ii) such additional information concerning the business and
financial condition of the Company as you may from time to time reasonably
request (such financial statements to be on a consolidated
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basis to the extent the accounts of the Company and its subsidiaries (if any)
are consolidated in reports furnished to their stockholders generally or to the
Commission);
(h) To use the net proceeds received by it from the sale of the
Shares pursuant to this Agreement in the manner specified in the Prospectus
under the caption "Use of Proceeds;"
(i) If the Company elects to rely upon Rule 462(b), the Company
shall file a Rule 462(b) Registration Statement with the Commission in
compliance with Rule 462(b) by 5:00 P.M., Washington, D.C. time, on the date of
this Agreement, and the Company shall at the time of filing either pay to the
Commission the filing fee for the Rule 462(b) Registration Statement or give
irrevocable instructions for the payment of such fee pursuant to Rule 111(b)
under the Act;
(j) To file with the Commission such reports on Form SR as may be
required by Rule 463 under the Act.
6. The Company covenants and agrees with the several Underwriters
to pay or cause to be paid the following: (i) the fees, disbursements and
expenses of the Underwriters' 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, any
Preliminary Prospectus and the Prospectus and amendments and supplements
thereto and the mailing and delivering of copies thereof to the Underwriters
and dealers; (ii) the cost of printing or producing any Agreement among
Underwriters, this Agreement and Blue Sky Memoranda, closing documents
(including any compilations thereof) and any other documents in connection with
the offering, purchase, sale and delivery of the Shares; (iii) all expenses in
connection with the qualification of the Shares for offering and sale under
state securities laws, including the fees and disbursements of counsel for the
Underwriters, if any, in connection with such qualification and in connection
with the Blue Sky surveys; (iv) all fees and expenses in connection with
listing the Shares on the NASD OTC Bulletin Board; (v) the cost of preparing
stock certificates; (vi) the cost and charges of any transfer agent or
registrar; (vii) the cost and charges of DTC; (vii) the out-of-pocket expenses
of the Underwriters, including without limitation, road show expenses and the
Underwriter's legal fees and expenses (provided that the Company's obligation
to pay such out- of-pocket expenses shall not exceed the amount of $50,000) and
(viii) all other costs and expenses incident to the performance of its
obligations hereunder which are not otherwise specifically provided for in this
Section. The out-of-pocket expenses of the Underwriters, including the
Underwriters' legal fees and the fees and disbursements in connection with
qualification of the Shares for offering and sale under state securities laws
shall be paid regardless of whether the offering contemplated hereby is
consummated or not consummated for any reason unless the offering is not
consummated due to a willful breach of this Agreement by the Underwriters or
because of the Underwriters' inability to perform their obligations under this
Agreement. Upon consummation of the offering, the Underwriters' agree to
credit such out-of- pocket expenses (up to a maximum of $50,000) against the
fees paid pursuant to Section 2 hereof.
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7. The obligations of the Underwriters hereunder, as to the
Shares to be delivered at each Time of Delivery, shall be subject, in their
discretion, to the condition that all representations and warranties and other
statements of the Company herein are, at and as of such Time of Delivery, true
and correct, the condition that the Company shall have performed all of their
respective obligations hereunder theretofore to be performed, and the following
additional conditions:
(a) The Prospectus shall have been filed with the Commission
pursuant to Rule 424(b) within the applicable time period prescribed for such
filing by the rules and regulations under the Act and in accordance with
Section 5(a) hereof; no stop order suspending the effectiveness of the
Registration Statement or any part thereof shall have been issued and no
proceeding for that purpose shall have been initiated or threatened by the
Commission; and all requests for additional information on the part of the
Commission shall have been complied with to your reasonable satisfaction; if
the Company has elected to rely upon Rule 462(b), the Rule 462(b) Registration
Statement shall have become effective by 5:00 P.M., Washington, D.C. time, on
the date of this Agreement;
(b) Xxxxxxxx Xxxxxx Xxxxxxxx and Xxxx, counsel for the
Underwriters, shall have furnished to you such opinion or opinions, dated as of
such Time of Delivery, with respect to the validity of the Shares as well as
such other related matters as you may reasonably request, and such counsel
shall have received such papers and information as they may reasonably request
to enable them to pass upon such matters;
(c) Jaffe, Raitt, Heuer & Xxxxx, P.C., counsel for the Company,
shall have furnished to you their written opinion, dated such Time of Delivery,
in form and substance satisfactory to you, to the effect that:
(i) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State
of Michigan with power and authority (corporate and other) to own its
properties and conduct its business as described in the Prospectus;
(ii) The Company has an authorized capitalization as set
forth in the Prospectus, and all of the issued shares of capital stock
of the Company (including, when delivered and paid for as provided in
this Agreement, the Shares being delivered at such Time of Delivery)
have been duly and validly authorized and issued and are fully paid
and non-assessable; and the Shares conform in all material respects to
the description of the Common Stock contained in the Prospectus;
(iii) To the knowledge of such counsel and other than as
set forth in the Prospectus there are no legal or governmental
proceedings pending to which the Company is a party or of which any
property of the Company is the subject which, if determined adversely
to the Company, would individually or in the aggregate have a material
adverse effect on the current or future consolidated financial
position, stockholders' equity or
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results of operations of the Company; and, to the knowledge of such
counsel, no such proceedings are threatened or contemplated by
governmental authorities or threatened by others;
(iv) This Agreement has been duly authorized, executed and
delivered by the Company;
(v) The issue and sale of the Shares being delivered at
such Time of Delivery by the Company and the compliance by the Company
with all of the provisions of this Agreement and the consummation of
the transactions herein contemplated will not conflict with or result
in a breach or violation of any of the terms or provisions of, or
constitute a default under, any indenture, mortgage, deed of trust,
loan agreement or other agreement or instrument known to such counsel
to which the Company is a party or by which the Company is bound or to
which any of the property or assets of the Company is subject, nor
will such action result in any violation of the provisions of the
Articles of Incorporation (or other charter document) or By-laws of
the Company or any statute or any order, rule or regulation known to
such counsel of any court or governmental agency or body having
jurisdiction over the Company or any of its properties;
(vi) No consent, approval, authorization, order,
registration or qualification of or with any such court or
governmental agency or body is required for the issue and sale of the
Shares or the consummation by the Company of the transactions
contemplated by this Agreement and the agreements listed in Annex II
hereto, except the registration under the Act of the Shares and such
consents, approvals, authorizations, registrations or qualifications
as may be required under, state securities or Blue Sky laws in
connection with the purchase and distribution of the Shares by the
Underwriters;
(vii) The Company is not, to the knowledge of such counsel,
(i) in violation of its Articles of Incorporation (or other charter
documents) or By-laws or (ii) in default in the performance or
observance of any material obligation, agreement, covenant or
condition contained in any indenture, mortgage, deed of trust, loan
agreement, lease or other agreement or instrument to which it is a
party or by which it or any of its properties may be bound;
(viii) The statements set forth in the Prospectus under the
captions, "Description of Capital Stock," insofar as they purport to
constitute a summary of the terms of the capital stock of the Company,
and under the captions "The Business--Formation and Structure,"
"--Operations," "--Financing," "--Regulation and Supervision,"
"Certain Transactions" insofar as they constitute or purport to
describe matters of law or legal conclusions, provisions of laws and
documents referred to therein, have been reviewed by such counsel, are
accurate in all material respects and present fairly the information
required to be shown therein;
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(ix) Each of the agreements listed in Annex II hereto has
been duly authorized, executed and delivered by the Company and the
other parties thereto and constitutes the valid and legally binding
obligation of the Company enforceable in accordance with its terms,
subject to bankruptcy, insolvency, reorganization, moratorium and
similar laws of general applicability relating to or affecting
creditors' rights;
(x) The Company is not an "investment company" or an
entity "controlled" by an "investment company," as such terms are
defined in the Investment Company Act;
(xi) The Registration Statement and the Prospectus and any
further amendments and supplements thereto made by the Company prior
to such Time of Delivery (other than the financial statements, related
schedules and other financial data therein, as to which such counsel
need express no opinion) comply as to form in all material respects
with the requirements of the Act and the rules and regulations
thereunder; although such counsel does not assume any responsibility
for the accuracy, completeness or fairness of the statements contained
in the Registration Statement or the Prospectus, except as otherwise
indicated in its opinion, such counsel has no reason to believe that,
as of its effective date, the Registration Statement or any further
amendment thereto made by the Company prior to such Time of Delivery
(other than the financial statements, related schedules and other
financial data therein, as to which such counsel need express no
opinion) 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, as of its date,
the Prospectus or any further amendment or supplement thereto made by
the Company prior to such Time of Delivery (other than the financial
statements, related schedules and other financial data therein, as to
which such counsel need express no opinion) contained an untrue
statement of a material fact or omitted to state a material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading or that, as
of such Time of Delivery, either the Registration Statement or the
Prospectus or any further amendment or supplement thereto made by the
Company prior to such Time of Delivery (other than the financial
statements, related schedules and other financial data therein, as to
which such counsel need express no opinion) contains an untrue
statement of a material fact or omits to state a material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; and they do
not know of any amendment to the Registration Statement required to be
filed or of any contracts or other documents of a character required
to be filed as an exhibit to the Registration Statement or required to
be described in the Registration Statement or the Prospectus which are
not filed or described as required; and
(d) On the date of the Prospectus at a time prior to the execution
of this Agreement, at 9:30 A.M., Detroit time, on the effective date of any
post-effective amendment to the Registration Statement filed subsequent to the
date of this Agreement and also at each Time of Delivery, Coopers & Xxxxxxx
L.L.P. shall have furnished to you a letter or letters, dated the respective
dates of delivery thereof, in form and substance satisfactory to you, to the
effect set forth in Annex I hereto (the executed copy of the letter delivered
prior to the execution of this
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Agreement is attached as Annex I(a) hereto and a draft of the form of letter to
be delivered on the effective date of any post-effective amendment to the
Registration Statement and as of each Time of Delivery is attached as Annex
I(b) hereto);
(e) (i) The Company shall not have sustained since the date
of the latest audited financial statements included in the Prospectus, any loss
or interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor dispute or
court or governmental action, order or decree, otherwise than as set forth or
contemplated in the Prospectus, and (ii) since the respective dates as of which
information is given in the Prospectus there shall not have been any change in
the capital stock or long-term debt of the Company or any change in or
affecting the general affairs, management, financial position, stockholders'
equity, results of operations of the Company, otherwise than as set forth or
contemplated in the Prospectus, the effect of which, in any such case described
in clause (i) or (ii), is in the judgment of the Representative after
discussion with the Company so material and adverse as to make it impracticable
or inadvisable to proceed with the public offering or the delivery of the
Shares being delivered at such Time of Delivery on the terms and in the manner
contemplated in the Prospectus;
(f) (x) On or after the date hereof (i) trading in securities
generally on the NASD OTC Bulletin Board shall not have been suspended or
materially limited, (ii) trading in the Shares on the NASD OTC Bulletin Board
shall not have been suspended, (iii) a general moratorium on commercial banking
activities in Detroit shall not have been declared by Federal or Detroit
authorities, (iv) there shall not have occurred any outbreak of hostilities or
escalation thereof or other calamity or crisis having an adverse effect on the
financial markets of the United States or (v) there shall not have occurred any
material adverse development in any of the real estate markets in which the
mortgaged properties are located and (y) the occurrence or consequences of any
one or more of such events shall have, in the reasonable judgment of the
Underwriters, made it impracticable to market the Shares on the terms and in
the manner contemplated by the Prospectus;
(g) The Shares to be sold at such Time of Delivery shall have been
duly listed, subject to notice of issuance, on the NASD OTC Bulletin Board;
(h) The Company shall have complied with the provisions of Section
5(c) hereof with respect to the furnishing of Prospectuses;
(i) The Company shall furnish or cause to be furnished to you at
such Time of Delivery certificates of officers of the Company satisfactory to
you as to the accuracy of the representations and warranties of the Company
herein at and as of such Time of Delivery, as to the performance by the Company
of all of its obligations hereunder to be performed at or prior to such Time of
Delivery, as to the matters set forth in subsections (a) and (e) of this
Section and as to such other matters as you may reasonably request; and
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(j) The Company and its executive officers and directors shall
have executed and delivered Lock-Up Agreements substantially in the form
attached hereto as Annex III.
8. (a) The Company will indemnify and hold harmless each
Underwriter against any losses, claims, damages or liabilities, joint or
several, to which such Underwriter may become subject, under the Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions
in respect thereof) arise out of or are based upon an untrue statement or
alleged untrue statement of a material fact contained in any Preliminary
Prospectus, the Registration Statement, the Prospectus, or any amendment or
supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, and will reimburse
each Underwriter for any legal or other expenses reasonably incurred by such
Underwriter in connection with investigating or defending any such action or
claim as such expenses are incurred; provided, however, that the Company shall
not be liable in any such case to the extent that any such loss, claim, damage
or liability arises out of or is based upon an untrue statement or alleged
untrue statement or omission or alleged omission made in any Preliminary
Prospectus, the Registration Statement, the Prospectus, or any such amendment
or supplement thereto in reliance upon and in conformity with written
information furnished to the Company by any Underwriter through Xxxxx & Co.,
L.L.C. expressly for use therein; and provided, further, that with respect to
any untrue statement or omission or alleged untrue statement or omission made
in any Preliminary Prospectus, the indemnity agreement contained in this
subsection (a) shall not inure to the benefit of any Underwriter to the extent
that any such loss, claim, damage or liability of such Underwriter results from
the fact that a copy of the Prospectus was not sent or given to any person at
or prior to the written confirmation of the sale of such securities to such
person; and the Underwriters will reimburse the Company for any legal or other
expenses reasonably incurred by the Company in connection with investigating or
defending any such action or claim as such expenses are incurred.
(b) Each Underwriter will indemnify and hold harmless the Company
against any losses, claims, damages or liabilities to which the Company may
become subject, under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are
based upon an untrue statement or alleged untrue statement of a material fact
contained in any Preliminary Prospectus, the Registration Statement, the
Prospectus, or any amendment or supplement thereto, or arise out of or are
based on the omission or alleged omission to state therein a material fact
required be stated therein or necessary to make the statements therein not
misleading, in each case to the extent, but only to the extent, that such
untrue statement, alleged untrue statement or omission or alleged omission was
made in any Preliminary Prospectus, the Registration Statement, the Prospectus,
or any such amendment or supplement thereto in reliance upon and in conformity
with written information furnished to the Company by such Underwriter through
Xxxxx & Co., L.L.C. expressly for use therein.
(c) Promptly after receipt by an indemnified party under
subsections (a) or (b) above of notice of the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made against an
indemnifying party under such subsection, notify the
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indemnifying party in writing of the commencement thereof; but the omission so
to notify the indemnifying party shall not relieve it from any liability which
it may have to any indemnified party otherwise than under such subsection. In
case any such action shall be brought against any indemnified party and it has
notified the indemnifying party of the commencement thereof, the indemnifying
party shall be entitled to participate therein and, to the extent that it may
wish, jointly with any other indemnifying party similarly notified, to assume
the defense thereof, with counsel satisfactory to such indemnified party, and,
after notice from the indemnifying party to such indemnified party of its
election to assume the defense thereof, the indemnifying party shall not be
liable to such indemnified party under such subsection for any legal expenses
of other counsel or any other expenses, in each case subsequently incurred by
such indemnified party, in connection with the defense thereof other than
reasonable costs of investigation. No indemnifying party shall, without the
written consent of the indemnified party, effect the settlement or compromise
of, or consent to the entry of any judgment with respect to, any pending or
threatened action or claim in respect of which indemnification or contribution
may be sought hereunder unless such settlement, compromise or judgment (i)
includes a conditional release of the indemnified party from all liability
arising out of such action or claim and (ii) does not include a statement as
to, or an admission of, fault, culpability or a failure to act, by or on behalf
of any indemnified party.
(d) If the indemnification provided for in this Section 8 is
unavailable or insufficient to hold harmless an indemnified party under
subsections (a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to therein, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities
(or actions in respect thereof) such proportion as is appropriate to reflect
the relative benefits received by the Company on the one hand and the
Underwriters on the other from the offering of the Shares. If, however, the
allocation provided for by the immediately preceding sentence is not permitted
by applicable law or if the indemnified party failed to give the notice
required under subsection (c) above, then each indemnifying party shall
contribute to such amount paid or payable by such indemnified party in such
proportion as is appropriate to reflect not only such relative benefits but
also the relative fault of the Company on the one hand and the Underwriters on
the other in connection with the statements or omissions which resulted in such
losses, claims, damages or liabilities (or actions in respect thereof), as well
as any other relevant equitable considerations. The relative benefits received
by the Company on the one hand and the Underwriters on the other shall be
deemed to be in the same proportion the total net proceeds from the offering
(before deducting expenses) received by the Company bear to the total
underwriting commissions received by the Underwriters, in each case as set
forth in the table on the cover page of the Prospectus. The relative fault
shall be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged omission
to state a material fact relates to information supplied by the Company on the
one hand or the Underwriters on the other and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The Company and the Underwriters agree that it would
not be just and equitable if contributions pursuant to this section (d) were
determined by pro rata allocation (even if the Underwriters are treated as one
entity for such purpose) or by any other
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method of allocation which does not take account of the equitable
considerations referred to above in this subsection (d). The amount paid or
payable by an indemnified party as a result of the losses, claims, damages or
liabilities (or actions in respect thereof) referred to above in this
subsection (d) shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such action or claim. Notwithstanding the provisions of this
subsection (d), no Underwriter shall be required to contribute any amount in
excess of the amount by which the total price at which the Shares underwritten
by it and distributed to the public were offered to the public exceeds the
amount of any damages which such Underwriter has otherwise been required to pay
by reason of such untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. The Underwriters'
obligations in this subsection (d) to contribute are several in proportion to
their respective underwriting obligations and not joint.
(e) The obligations of the Company under this Section 8 shall be
in addition to any liability which the Company may otherwise have and shall
extend, upon the same terms and conditions, to each person, if any, who
controls any Underwriter within the meaning of the Act; and the obligations of
the Underwriters under this Section 8 shall be in addition to any liability
which the respective Underwriters may otherwise have and shall extend, upon the
same terms and conditions, to each officer and director of the Company and to
each person, if any, who controls the Company within the meaning of the Act.
9. (a) If any Underwriter shall default in its obligation to
purchase the Shares which it has agreed to purchase hereunder at a Time of
Delivery, you may in your discretion arrange for you or another party or other
parties to purchase such Shares on the terms contained herein. If within
thirty-six hours after such default by any Underwriter you do not arrange for
the purchase of such Shares, then the Company shall be entitled to a further
period of thirty-six hours within which to procure another party or other
parties satisfactory to you to purchase such Shares on such terms. In the
event that, within the respective prescribed periods, you notify the Company
that you have so arranged for the purchase of such Shares, or the Company
notifies you that it has so arranged for the purchase of such Shares, you or
the Company shall have the right to postpone such Time of Delivery for a period
of not more than seven days, in order to effect whatever changes may thereby be
made necessary in the Registration Statement or the Prospectus, or in any other
documents or arrangements, and the Company agrees to file promptly any
amendments to the Registration Statement or the Prospectus which in your
opinion may thereby be made necessary. The term "Underwriter" as used in this
Agreement shall include any person substituted under this Section with like
effect as if such person had originally been a party to this Agreement with
respect to such Shares.
(b) If, after giving effect to any arrangements for the purchase
of the Shares of a defaulting Underwriter or Underwriters by you and the
Company as provided in subsection (a) above, the aggregate number of such
Shares which remains unpurchased does not exceed one-tenth of the aggregate
number of all the Shares to be purchased at such Time of Delivery, then
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the Company shall have the right to require each non-defaulting Underwriter to
purchase the number of shares which such Underwriter agreed to purchase
hereunder at such Time of Delivery and, in addition, to require each
non-defaulting Underwriter to purchase its pro rata share (based on the number
of Shares which such Underwriter agreed to purchase hereunder) of the Shares of
such defaulting Underwriter or Underwriters for which such arrangements have
not been made, but nothing herein shall relieve a defaulting Underwriter from
liability for its default.
(c) If, after giving effect to any arrangements for the purchase
of the Shares of a defaulting Underwriter or Underwriters by you and the
Company as provided in subsection (a) above, the aggregate number of such
Shares which remains unpurchased exceeds one-tenth of the aggregate number of
all the Shares to be purchased at such Time of Delivery, or if the Company
shall not exercise the right described in subsection (b) above to require
non-defaulting Underwriters to purchase Shares of a defaulting Underwriter or
Underwriters, then this Agreement (or, with respect to the Second Time of
Delivery, the obligations of the Underwriters to purchase and of the Company to
sell the Optional Shares) shall thereupon terminate, without liability on the
part of any non-defaulting Underwriter or, the Company, except for the expenses
to be borne by the Company and the Underwriters as provided in Section 6 hereof
and the indemnity and contribution agreements in Section 8 hereof; but nothing
herein shall relieve a defaulting Underwriter from liability for its default.
10. The respective indemnities, agreements, representations,
warranties and other statements of the Company and the several Underwriters, as
set forth in this Agreement or made by or on behalf of them, respectively,
pursuant to this Agreement, shall remain in full force and effect, regardless
of any investigation (or any statement as to the results thereof) made by or on
behalf of any Underwriter or any controlling person of any Underwriter, or the
Company, or any officer or director or controlling person of the Company, and
shall survive delivery of and payment for the Shares.
11. If this Agreement shall be terminated pursuant to Section 9
hereof, the Company shall not then be under any liability to any Underwriter
except as provided in Sections 6 and 8 hereof; but, if for any other reason,
any Shares are not delivered by or on behalf of the Company as provided herein,
the Company will reimburse the Underwriters through you for all out-of-pocket
expenses approved in writing by you, including fees and disbursements of
counsel, reasonably incurred by the Underwriters in making preparations for the
purchase, sale and delivery of the Shares not so delivered, but the Company
shall then be under no further liability to any Underwriter except as provided
in Sections 6 and 8 hereof.
12. In all dealings hereunder, you shall act on behalf of each of
the Underwriters, and the parties hereto shall be entitled to act and rely upon
any statement, request, notice or agreement on behalf of any Underwriter made
or given by you.
All statements, requests, notices and agreements hereunder shall be in
writing, and if to the Underwriters shall be delivered or sent by mail, telex
or facsimile transmission to Xxxxx & Co., L.L.C. at Xxx Xxxxxxxx, Xxxxxxx,
Xxxxxxxx 00000, Attention Syndicate Department; and if
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to the Company shall be delivered or sent by mail to the address of the
Company, respectively set forth in the Registration Statement, Attention:
Xxxxxxx X. Xxxxxxxx, CEO; provided, however, that any notice to an Underwriter
pursuant to Section 8(c) hereof shall be delivered or sent by mail, telex or
facsimile transmission to such Underwriter at its address set forth in its
Underwriters' Questionnaire, or telex constituting such Questionnaire, which
address will be supplied to the Company by you upon request. Any such
statements, requests, notices or agreements shall take effect upon receipt
thereof.
13. This Agreement shall be binding upon, and inure solely to the
benefit of, the Underwriters and the Company, and, to the extent provided in
Sections 8 and 10 hereof, the officers and directors of the Company, and each
person who controls the Company or any Underwriter, and their respective heirs,
executors, administrators, successors and assigns, and no other person shall
acquire or have any right under or by virtue of this Agreement. No purchaser
of any of the Shares from any Underwriter shall be deemed a successor or assign
by reason merely of such purchase.
14. As used herein, the term "business day" shall mean any day
when the Commission's office in Washington, D.C. is open for business.
15. This Agreement shall be governed by and construed in
accordance with the laws of the State of Michigan.
16. This Agreement may be executed by any one or more of the
parties hereto in any number of counterparts, each of which shall be deemed to
be an original, but all such counterparts shall together constitute one and the
same instrument.
If the foregoing is in accordance with your understanding, please sign
and return to us one counterpart for the Company plus one for each counsel
thereof, and upon the acceptance hereof by you, on behalf of each of the
Underwriters, this letter and such acceptance hereof shall constitute a binding
agreement between each of the Underwriters, the Company. It is understood that
your acceptance of this letter on behalf of each of the Underwriters is
pursuant to the authority set forth in a form of Agreement among Underwriters,
the form of which shall be
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submitted to the Company for examination upon request, but without warranty on
your part as to the authority of the signers thereof.
Very truly yours,
Xxxxxxx Financial Services Corporation
By:_____________________________________
Name:
Title:
Accepted as of the date hereof:
Xxxxx & Co., L.L.C.
By:_________________________________
Name:
Title:
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SCHEDULE I
Number of Optional
Shares to be
Total Number of Purchased if
Shares to be Maximum Option
Underwriter Purchased Exercised
----------- --------------- ------------------
Xxxxx & Co, L.L.C. . . . . .
_________ _________
Total 1,000,000 150,000
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ANNEX I
ANNEX 1 (a)
ANNEX 1 (b)
22
ANNEX II
Participants Support Agreement
Administration Agreement
Subordinated Loan Agreement
23
ANNEX III
FORM OF LOCK-UP AGREEMENT
23
