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EXHIBIT 1
Draft: 11/16/98
1,100,000 SHARES
COMMUNITY SHORES BANK CORPORATION
COMMON STOCK
UNDERWRITING AGREEMENT
, 1998
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Xxxxx Capital Markets,
a division of First Chicago
Capital Markets, Inc.
Xxx Xxxxxxxx
Xxxxxxx, Xxxxxxxx 00000
Dear Sirs:
Community Shores Bank Corporation, a Michigan corporation (the
"Company"), proposes to issue and sell 1,100,000 shares (the "Firm Shares") of
its authorized but unissued Common Stock (the "Common Stock") to Xxxxx Capital
Markets, a division of First Chicago Capital Markets, Inc. ("Xxxxx" or the
"Underwriter"). In addition, the Company proposes to grant to the Underwriter an
option to purchase up to an additional 165,000 shares (the "Optional Shares") to
cover over-allotments. The Firm Shares and the Optional Shares are called,
collectively, the "Shares."
1. SALE AND PURCHASE OF THE SHARES.
(a) On the basis of the representations, warranties and
agreements of the Company contained in, and subject to the terms and
conditions of, this Agreement, the Company agrees to issue and sell to
the Underwriter, and the Underwriter agrees to purchase, the Firm
Shares at a purchase price of $____ per Share, except as set forth in
Section 1(b) below.
(b) On the basis of the representations, warranties and
agreements of the Company contained in, and subject to the terms and
conditions of, this Agreement, the policies of the National Association
of Securities Dealers, Inc. (the "NASD"), and pursuant to directions
from the Company, the Underwriter will offer to sell to each of the
persons listed on Exhibit A (who may purchase alone or with family
members to the extent permitted by the Free-Riding and Withholding
Interpretation (the "Interpretation") under the Rules of Fair Practice
of the NASD) the number of Shares set forth opposite their respective
names on
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Exhibit A. To the extent such persons (alone or with such family
members) offer to buy such Shares, the Underwriter agrees to
purchase up to 300,000 of such Shares at a purchase price of $____ per
Share. The parties agree that the securities purchased and sold under
this subparagraph shall constitute "issuer directed securities" sold to
the issuer's employees or directors or other persons under the
Interpretation.
(c) On the basis of the representations, warranties and
agreements of the Company contained in, and subject to the terms and
conditions of, this Agreement, the Company grants to the Underwriter an
option to purchase all or any part of the Optional Shares at a price
per Share of $____. The over-allotment option may be exercised only to
cover over-allotments in the sale of the Firm Shares by the Underwriter
and may be exercised in whole or in part at any time or times on or
before 12:00 noon, Detroit time, on the day before the Firm Shares
Closing Date (as defined in Section 2 below), and only once at any time
after that date and within 30 days after the Effective Date (as defined
in Section 4 below), in each case upon written or transmitted facsimile
notice, or verbal notice confirmed by transmitted facsimile, written or
telegraphic notice, by Xxxxx to the Company no later than 12:00 noon,
Detroit time, on the day before the Firm Shares Closing Date or at
least three but not more than five full business days before the
Optional Shares Closing Date (as defined in Section 2 below), as the
case may be, setting forth the number of Optional Shares to be
purchased and the time and date (if other than the Firm Shares Closing
Date) of such purchase.
2. DELIVERY AND PAYMENT. Delivery by the Company of the Firm
Shares to Xxxxx and payment of the purchase price by certified or official bank
check payable in Detroit Clearing House (next day) funds to the Company, shall
take place at the offices of Xxxxxxxxx Xxxxxx PLLC, 000 Xxxxxxxx Xxxxxx, Xxxxx
0000, Xxxxxxx, Xxxxxxxx 00000, at 10:00 a.m., Detroit time, at such time and
date, not later than the third (or, if the Firm Shares are priced, as
contemplated by Rule 15c6-1(c) under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), after 4:30 p.m., Washington, D.C. time, the
fourth) full business day following the first date that any of the Shares are
released by the Underwriter for sale to the public, as Xxxxx shall designate by
at least 48 hours prior notice to the Company (the "Firm Shares Closing Date");
provided, however, that if the Prospectus (as defined in Section 4 below) is at
any time prior to the Firm Shares Closing Date recirculated to the public, the
Firm Shares Closing Date shall occur upon the later of the third or fourth, as
the case the may be, full business day following the first date that any of the
Shares are released by the Underwriter for sale to the public or the date that
is 48 hours after the date that the Prospectus has been so recirculated.
To the extent the option with respect to the Optional Shares
is exercised, delivery by the Company of the Optional Shares, and payment of the
purchase price by certified or official bank check payable in Detroit Clearing
House (next day) funds to the Company, shall take place at the offices of
Xxxxxxxxx Xxxxxx PLLC specified above at the time and on the date (which may be
the Firm Shares Closing Date) specified in the notice referred to in Section
1(c)
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(such time and date of delivery and payment are called the "Optional Shares
Closing Date"). The Firm Shares Closing Date and the Optional Shares Closing
Date are called, individually, a "Closing Date" and, collectively, the "Closing
Dates."
Certificates representing the Firm Shares shall be registered
in such names and shall be in such denominations as Xxxxx shall request at
least two full business days before the Firm Shares Closing Date or, in the
case of the Optional Shares, on the day of notice of exercise of the option as
described in Section 1(c), and shall be made available to Xxxxx for checking
and packaging, at such place as is designated by Xxxxx, at least one full
business day before the Closing Date.
3. PUBLIC OFFERING. The Company understands that the Underwriter
proposes to make a public offering of the Shares, as set forth in and pursuant
to the Prospectus, as soon after the Effective Date as Xxxxx xxxxx advisable.
The Company hereby confirms that the Underwriter and dealers have been
authorized to distribute each preliminary prospectus and are authorized to
distribute the Prospectus (as from time to time amended or supplemented).
4. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company represents and warrants to the Underwriter and
agrees with the Underwriter as follows:
(a) The Company has carefully prepared in conformity with
the requirements of the Securities Act of 1933, as amended (the
"Securities Act") and the rules and regulations adopted by the
Securities and Exchange Commission (the "Commission") thereunder (the
"Rules"), a registration statement on Form SB-2 (No. 333- ),
including a preliminary prospectus, and has filed with the Commission
the registration statement and such amendments thereof as may have been
required to the date of this Agreement. Copies of such registration
statement (including all amendments thereof) and of the related
preliminary prospectus have heretofore been delivered by the Company to
you. The term "preliminary prospectus" means any preliminary prospectus
(as defined in Rule 430 of the Rules) included at any time as a part of
the registration statement. The registration statement as amended
(including any supplemental registration statement under Rule 462(b) or
any amendment under Rule 462(c) of the Rules) at the time and on the
date it becomes effective (the "Effective Date"), including the
prospectus, financial statements, schedules, exhibits, and all other
documents incorporated by reference therein or filed as a part thereof,
is called the "Registration Statement;" provided, however, that
"Registration Statement" shall also include all Rule 430A Information
(as defined below) deemed to be included in such Registration Statement
at the time such Registration Statement becomes effective as provided
by Rule 430A of the Rules. The term "Prospectus" means the Prospectus
as filed with the Commission pursuant to Rule 424(b) of the Rules or,
if no filing pursuant to Rule 424(b) of the Rules is required, means
the form of final prospectus included in the Registration Statement at
the time such
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Registration Statement becomes effective. The term "Rule 430A
Information" means information with respect to the Shares and the
offering thereof permitted to be omitted from the Registration
Statement when it becomes effective pursuant to Rule 430A of the Rules.
Reference made herein to any preliminary prospectus or to the
Prospectus shall be deemed to refer to and include any document
attached as an exhibit thereto or incorporated by reference therein, as
of the date of such preliminary prospectus or the Prospectus, as the
case may be. The Company will not file any amendment of the
Registration Statement or supplement to the Prospectus to which Xxxxx
shall reasonably object in writing after being furnished with a copy
thereof.
(b) Each preliminary prospectus, at the time of filing
thereof, contained all material statements which were required to be
stated therein in accordance with the Securities Act and the Rules, and
conformed in all material respects with the requirements of the
Securities Act and the Rules, and did not include any untrue statement
of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading. The
Commission has not issued any order suspending or preventing the use of
any preliminary prospectus. When the Registration Statement shall
become effective, when the Prospectus is first filed pursuant to Rule
424(b) of the Rules, when any post-effective amendment of the
Registration Statement shall become effective, when any supplement to
or pre-effective amendment of the Prospectus is filed with the
Commission and at each Closing Date, the Registration Statement and the
Prospectus (and any amendment thereof or supplement thereto) will
comply with the applicable provisions of the Securities Act and the
Exchange Act and the respective rules and regulations of the Commission
thereunder, and neither the Registration Statement nor the Prospectus,
nor any amendment thereof or supplement thereto, will contain any
untrue statement of a material fact or will omit to state any material
fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were
made, not misleading; provided, however, that the Company makes no
representation or warranty as to the information contained in the
Registration Statement or the Prospectus or any amendment thereof or
supplement thereto in reliance upon and in conformity with information
furnished in writing to the Company by the Underwriter, specifically
for use in connection with the preparation thereof.
(c) All contracts and other documents required to be
filed as exhibits to the Registration Statement have been filed with
the Commission as exhibits to the Registration Statement.
(d) Xxxxx, Xxxxxx & Company, LLP, whose report is filed
with the Commission as part of the Registration Statement, are, and
during the periods
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covered by their report were, independent public
accountants as required by the Securities Act and the Rules.
(e) The Company has been duly organized and is validly
existing as a corporation in good standing under the laws of the State
of Michigan. The Company's subsidiary, Community Shores Bank, a
Michigan banking corporation (the "Bank"), has become a body corporate
under the Michigan Banking Code of 1969 (the "Banking Code") and is
currently limited to the transaction of only such business as is
incidental and necessarily preliminary to its organization. Neither the
Company nor the Bank has any properties or conducts any business
outside of the State of Michigan which would require either of them to
be qualified as a foreign corporation or bank, as the case may be, in
any jurisdiction outside of Michigan. Neither the Company nor the Bank
has any directly or indirectly held subsidiary. The Company has all
power, authority, authorizations, approvals, consents, orders,
licenses, certificates and permits needed to enter into, deliver and
perform this Agreement and to issue and sell the Shares.
(f) The application for permission to organize the Bank
(the "FIB Application") was approved by the Commissioner of the
Financial Institutions Bureau for the State of Michigan (the
"Commissioner") on _________ , 1998, pursuant to Order No._________ ,
subject to certain conditions specified in the Order and supplemental
correspondence from the Commissioner dated the same date. The Order
and supplemental correspondence from the Commissioner are collectively
referred to in this Agreement as the "FIB Order." All conditions
contained in the FIB Order have been satisfied, except those
conditions relating to paid-in capital of the Bank, maintenance of
capital ratios and valuation reserves, the Certificate of Paid-In
Capital and Surplus, completion of the Commissioner's preopening
investigation and the issuance by the Commissioner of a certificate to
commence business. The application to the Federal Deposit Insurance
Corporation (the "FDIC") to become an insured depository institution
under the provisions of the Federal Deposit Insurance Act (the "FDIC
Application") was approved by order of the FDIC dated _________ , 1998
(the "FDIC Order"), subject to certain conditions specified in the
Order. All conditions contained in the FDIC Order required to be
satisfied before the date of this Agreement have been satisfied The
Company's application to become a bank holding company and acquire all
issued capital stock of the Bank (the "Bank Holding Company
Application") under the Bank Holding Company Act of 1956, as amended,
was approved on ________ , 1998 (the "Federal Reserve Board
Approval"), subject to certain conditions specified in the Federal
Reserve Board Approval. All conditions in the Federal Reserve Board
Approval required to be satisfied before the date of this Agreement
have been satisfied. Each of the FIB Application, FDIC Application,
and Bank Holding Company Application, at the time of their respective
filings, contained all required information and such information was
complete and accurate in all material respects. Other than the
remaining conditions to be fulfilled under the FIB Order, FDIC Order
and the Federal
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Reserve Board Approval specified above, no authorization, approval,
consent, order, license, certificate or permit of and from any federal,
state, or local governmental or regulatory official, body, or tribunal,
is required for the Company or the Bank to commence and conduct their
respective businesses and own their respective properties as described
in the Prospectus, except such authorizations, approvals, consents,
orders, licenses, certificates, or permits as are not material to the
commencement or conduct of their respective businesses or to the
ownership of their respective properties.
(g) The financial statements of the Company and any
related notes thereto, included in the Registration Statement and the
Prospectus, present fairly the financial position of the Company as of
the date of such financial statements and for the period covered
thereby. Such statements and any related notes have been prepared in
accordance with generally accepted accounting principals applied on a
consistent basis and certified by the independent accountants named in
subsection 4(d) above. No other financial statements are required to be
included in the Prospectus or the Registration Statement.
(h) The Company owns adequate and enforceable rights to
use any patents, patent applications, trademarks, trademark
applications, service marks, copyrights, copyright applications and
other similar rights (collectively, "Intangibles") necessary for the
conduct of the material aspects of its business as described in the
Prospectus and the Company has not infringed, is infringing, or has
received any notice of infringement of, any Intangible of any other
person.
(i) The Company has a valid and enforceable _________
interest in the real property located at 0000 Xxxxxx Xxxxxx, Xxxxxxxxx
Xxxx, Xxxxxxxx, which is as described in the Prospectus, and is free
and clear of all liens, encumbrances, claims, security interests and
defects.
(j) There are no litigation or governmental or other
proceedings or investigations pending before any court or before or by
any public body or board or threatened against the Company or the Bank
and to the best of the Company's knowledge, there is no reasonable
basis for any such litigation, proceedings or investigations, which
would have a material adverse effect on commencement or conduct of the
respective businesses of the Company or the Bank or the ownership of
their respective properties.
(k) The Company and Bank have filed all federal, state,
and local tax returns required to be filed by them and paid all taxes
shown due on such returns as well as all other material taxes,
assessments and governmental charges which have become due; no
material deficiency with respect to any such return has been assessed
or proposed.
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(l) Subsequent to the respective dates as of which
information is given in the Registration Statement and the Prospectus,
there has not been any material adverse change in the condition
(financial or other), business, properties or prospects of the
Company.
(m) No default exists, and no event has occurred which
with notice or lapse of time, or both, would constitute a default, in
the due performance and observance of any material term, covenant or
condition, by the Company, the Bank or, to the best of the Company's
knowledge, any other party, of any lease, indenture, mortgage, note or
any other agreement or instrument to which the Company or the Bank is
a party or by which either of them or either of their businesses may
be bound or affected, except such defaults or events as are not
material to the commencement or conduct of their respective businesses
or ownership of their respective properties.
(n) Neither the Company nor the Bank is in violation of
any term or provision of the articles of incorporation or bylaws of the
Company or the Bank. Neither the Company nor the Bank is in violation
of, nor is either of them required to take any action to avoid any
material violation of, any franchise, license, permit, judgment,
decree, order, statute, rule or regulation.
(o) Neither the execution, delivery or performance of
this Agreement by the Company nor the consummation of the transactions
contemplated hereby (including, without limitation, the issuance and
sale by the Company of the Shares) will give rise to a right to
terminate or accelerate the due date of any payment due under, or
conflict with or result in the breach of any term or provision of, or
constitute a default (or an event which with notice or lapse of time,
or both, would constitute a default) under, or require any consent
under, or result in the execution or imposition of any lien, charge or
encumbrance upon any properties or assets of the Company or the Bank
pursuant to the terms of, any lease, indenture, mortgage, note or other
agreement or instrument to which the Company or the Bank is a party or
by which either of them or either of their businesses may be bound or
affected, or any franchise, license, permit, judgment, decree, order,
statute, rule or regulation or violate any provision of the articles of
incorporation or bylaws of the Company or the Bank, except those which
are immaterial in amount or effect.
(p) The Company has authorized capital stock as set forth
in the Prospectus. One share of Common Stock of the Company is issued
and outstanding, which will be redeemed at or promptly following the
Closing if permitted by applicable law. No shares of preferred stock
are issued and outstanding. The issuance, sale and delivery of the
Shares have been duly authorized by all necessary corporate action by
the Company and, when issued, sold and delivered against payment
therefor pursuant to this Agreement, will be duly and validly issued,
fully paid and nonassessable and none of them will have
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been issued in violation of any preemptive or other right. Upon
issuance, sale, and delivery thereof against payment therefor, all of
the capital stock of the Bank will be duly authorized and validly
issued, fully paid and nonassessable and will be owned by the Company,
free and clear of all liens, encumbrances and security interests
(subject to the provisions of the Banking Code, including, without
limitation, Sections 77 and 201 of the Banking Code). There is no
outstanding option, warrant or other right calling for the issuance of,
and no binding commitment to issue, any share of stock of the Company
or the Bank or any security convertible into or exchangeable for stock
of the Company or the Bank, except for stock options described in the
Registration Statement (the "Stock Options") under the 1998 Employee
Stock Option Plan (the "Stock Option Plan"). The Common Stock, the
Shares and the Stock Options conform to all statements in relation
thereto contained in the Registration Statement and the Prospectus.
(q) Subsequent to the respective dates as of which
information is given in the Registration Statement and the Prospectus,
neither the Company nor the Bank has (1) issued any securities or
incurred any material liability or obligation, direct or contingent,
(2) entered into any material transaction, or (3) declared or paid any
dividend or made any distribution on any of their stock, except
liabilities, obligations, and transactions reasonably expected based
on the disclosures in the Prospectus, and redemption of one share of
Common Stock for $10 at or promptly following the Closing if permitted
by applicable law.
(r) This Agreement has been duly and validly authorized,
executed and delivered by the Company and is the legal, valid and
binding agreement and obligation of the Company.
(s) The Commission has not issued any order preventing or
suspending the use of any preliminary prospectus.
(t) Neither the Company, nor the Bank, nor, to the
Company's knowledge any director, officer, agent, employee or other
person associated with the Company or the Bank, acting on behalf of
the Company or the Bank, has used any corporate funds for any unlawful
contribution, gift, entertainment or other unlawful expense relating
to political activity; made any direct or indirect unlawful payment to
any foreign or domestic government official or employee from corporate
funds; violated or is in violation of any provision of the Foreign
Corrupt Practices Act of 1977; or made any bribe, rebate, payoff,
influence payment, kickback or other unlawful payment.
(u) Neither the Company nor the Bank nor any affiliate of
either of them has taken, and they will not take, directly or
indirectly, any action designed to cause or result in, or which has
constituted or which might reasonably be expected to constitute, the
stabilization or manipulation of the price of the shares of the Common
Stock in order to facilitate the sale or resale of any of the Shares.
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(v) No transaction has occurred between or among the
Company or the Bank and any of their officers, directors, organizers
or the Company's shareholder or any affiliate or affiliates of any
such officer, director, organizer, or shareholder, that is required to
be described in and is not described in the Prospectus.
(w) The Company is not and will not after the offering
be an "investment company," or a company "controlled" by an "investment
company," within the meaning of the Investment Company Act of 1940, as
amended.
(x) The Company has obtained from all of its executive
officers and directors their written agreement that (i) for a period of
150 days from the date of the Effective Date, they will not offer to
sell, sell, transfer, contract to sell, or grant any option for the
sale of or otherwise dispose of, directly or indirectly, any shares of
Common Stock of the Company (or any securities convertible into or
exercisable for such shares of Common Stock), except for (1) the
exercise of Stock Options under the Stock Option Plan or (2) gifts of
Common Stock (or other securities) to a donee or donees who agree in
writing to be bound by this clause, and (ii) for a period of three
months from the date of the Effective Date, they will not sell,
transfer, assign, pledge, or hypothecate any shares of Common Stock
acquired under Paragraph l(b), above, except with respect to Xxxx X.
Xxxxxxx who may resell one share of Common Stock to the Company.
5. CONDITIONS OF THE UNDERWRITER'S OBLIGATIONS. The obligation
of the Underwriter to purchase the Shares shall be subject to the accuracy of
the representations and warranties of the Company in this Agreement as of the
date of this Agreement and as of the Firm Shares Closing Date or Optional Shares
Closing Date, as the case may be, to the accuracy of the statements of Company
officers made pursuant to the provisions of this Agreement, to the performance
by the Company of its obligations under this Agreement, and to the following
additional terms and conditions:
(a) The Registration Statement shall have become
effective not later than 5:00 P.M., Detroit time, on the date of this
Agreement or on such later date and time as shall be consented to in
writing by Xxxxx; if the filing of the Prospectus, or any supplement
thereto, is required pursuant to Rule 424(b) of the Rules, the
Prospectus shall have been filed in the manner and within the time
period required by Rule 424(b) of the Rules; at each Closing Date, if
any, no stop order shall have been issued or proceedings therefor
initiated or threatened by the Commission; and any request of the
Commission for inclusion of additional information in the Registration
Statement, or otherwise, shall have been complied with to the
reasonable satisfaction of Xxxxx.
(b) At each Closing Date, Xxxxx shall have received the
favorable opinion of Xxxxxxxxx Xxxxxx PLLC, counsel for the Company,
dated the Firm Shares Closing Date or the Optional Shares Closing Date,
as the case may be,
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addressed to the Underwriter and in form and scope reasonably
satisfactory to counsel for Xxxxx to the effect that:
(i) The Company (A) is a corporation existing and
in good standing under the laws of the State of Michigan, and
(B) is not required to be qualified to do business in any
jurisdiction outside Michigan. The Bank (X) has become a body
corporate under the Banking Code and is currently limited to
the transaction of only such business as is incidental and
necessarily preliminary to its organization, and (Y) is not
required to be qualified to do business in any jurisdiction
outside Michigan.
(ii) Each of the Company and the Bank has full
corporate power and authority and all material authorizations,
approvals, orders, licenses, certificates and permits of and
from all governmental bank regulatory officials and bodies
necessary to own its properties and to commence and conduct
its business as described in the Registration Statement and
Prospectus, including, without limitation, the FIB Order, the
FDIC Order and the Federal Reserve Board Approval, subject to
the fulfillment of the conditions with respect to the FIB
Order, the FDIC Order and the Federal Reserve Board Approval
all as described in Section 4(f) above, except for such
authorizations, approvals, orders, licenses, certificates and
permits as are not material to the ownership of their
properties or commencement or conduct of their businesses;
(iii) The Company has authorized capital stock as set
forth in the Prospectus and, prior to the Closing, had one
share of Common Stock issued and outstanding; the Shares have
been duly and validly authorized and issued and upon receipt
by the Company of payment therefor in accordance with the
terms of this Agreement will be fully paid and nonassessable
and are not and will not be subject to, preemptive rights; the
Shares and the other capital stock and Stock Options of the
Company conform in all material respects to the descriptions
thereof contained in the Registration Statement and the
Prospectus;
(iv) To such counsel's knowledge, after due inquiry,
the Company has no directly or indirectly held subsidiary;
(v) the certificates evidencing the Shares are in
the form approved by the Board of Directors of the Company,
comply with the bylaws and the articles of incorporation of
the Company, comply as to form and in all other material
respects with applicable legal requirements;
(vi) this Agreement has been duly and validly
authorized, executed and delivered by the Company, and is the
legal, valid and binding agreement and obligation of the
Company enforceable in
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accordance with its terms, except (a) as enforcement thereof
may be limited by bankruptcy, insolvency, reorganization,
moratorium or other laws relating to or affecting enforcement
of creditors' rights or by general equity principles
(including requirements of reasonableness and good faith in
the exercise of rights and remedies), whether applied by a
court of equity or a court of law in an action at law or in
equity, or by the discretionary nature of specific
performance, injunctive relief, and other equitable remedies,
including the appointment of a receiver, and (b), with respect
to provisions relating to indemnification and contribution, to
the extent they are held by a court of competent jurisdiction
to be void or unenforceable as against public policy or
limited by applicable laws or the policies embodied in them;
(vii) the Company is conveying to the Underwriter
good and valid title to the Shares that are issued in its
name, free and clear of any adverse claims, except to the
extent the Underwriter has notice of any adverse claim;
(viii) to the best of such counsel's knowledge, after
due inquiry, there are (A) no contracts or other documents
which are required to be filed as exhibits to the Registration
Statement other than those filed as exhibits thereto, (B) no
legal or governmental proceedings pending or threatened
against the Company or the Bank, and (C) no statutes or
regulations applicable to the Company or the Bank, or
certificates, permits, grants or other consents, approvals,
orders, licenses or authorizations from regulatory officials
or bodies, which are required to be obtained or maintained by
the Company or the Bank and which are of a character required
to be disclosed in the Registration Statement and Prospectus
which have not been so disclosed;
(ix) the statements in the Registration Statement
and the Prospectus, insofar as they are descriptions of
corporate documents, stock option plans, contracts, or
agreements or descriptions of laws, regulations, or
regulatory requirements, or refer to compliance with law or
to statements of law or legal conclusions, are correct in all
material respects;
(x) to the best of such counsel's knowledge, after
due inquiry, the execution, delivery and performance of this
Agreement, the consummation of the transactions herein
contemplated and the compliance with the terms and provisions
hereof by the Company will not give rise to a right to
terminate or accelerate the due date of any payment due under,
or conflict with or result in a breach of any of the terms or
provisions of, or constitute a default (or an event which,
with notice or lapse of time, or both, would constitute a
default) under, or require any consent under, or result in the
execution or imposition of any lien, charge or encumbrance
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upon any properties or assets of the Company or the Bank
pursuant to the terms of, any lease, indenture, mortgage, note
or other agreement or instrument to which the Company or the
Bank is a party or by which either of them or either of their
properties or businesses is or may be bound or affected, nor
will such action result in any violation of the provisions of
the articles of incorporation or bylaws of the Company or the
Bank or any statute or any order, rule, or regulation
applicable to the Company or the Bank of any court or any
federal, state, local or other regulatory authority or other
governmental body, the effect of which, in any such case,
would be expected to be materially adverse to the Company or
the Bank;
(xi) to the best of such counsel's knowledge, after
due inquiry, no consent, approval, authorization or order of
any court or governmental agency or body, domestic or foreign,
is required to be obtained by the Company in connection with
the execution and delivery of this Agreement or the sale of
the Shares to the Underwriter as contemplated by this
Agreement, except those which have been obtained;
(xii) to the best of such counsel's knowledge, after
due inquiry, (A) neither the Company nor the Bank is in breach
of, or in default (and no event has occurred which, with
notice or lapse of time, or both, would constitute a default)
under, any lease, indenture, mortgage, note, or other
agreement or instrument to which the Company or the Bank, as
the case may be, is a party; (B) neither the Company nor the
Bank is in violation of any term or provision of either of
their articles of incorporation or bylaws, or of any
franchise, license, grant, permit, judgment, decree, order,
statute, rule or regulation; and (C) neither the Company nor
the Bank has received any notice of conflict with the asserted
rights of others in respect of Intangibles necessary for the
commencement or conduct of its business, the effect of which,
in any such case, would be expected to be materially adverse
to the Company or the Bank;
(xiii) the Registration Statement and the Prospectus
and any amendments or supplements thereto (other than the
financial statements as to which no opinion need be rendered)
comply as to form with the requirements of the Securities Act
and the Rules in all material respects; and
(xiv) the Registration Statement is effective under
the Securities Act, and, to the best of such counsel's
knowledge, after due inquiry, no proceedings for a stop order
are pending or threatened under the Securities Act.
In rendering the foregoing opinion, such counsel may rely upon
certificates of public officials (as to matters of fact and law) and
officers of the
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Company (as to matters of fact), and include qualifications in its
opinion as are reasonably acceptable to Xxxxx Copies of all such
certificates shall be furnished to counsel to Xxxxx on the Closing
Date.
In addition, such counsel shall state that they have
participated in conferences with officers of the Company and a
representative of the Underwriter at which the contents of the
Registration Statement and Prospectus and related matters were
discussed and although such counsel did not independently verify the
accuracy or completeness of the statements made in the Registration
Statement and Prospectus and does not assume any responsibility for the
accuracy or completeness of the statements in the Registration
Statement and Prospectus, on the basis of the foregoing, nothing has
come to the attention of such counsel that would lead them to believe
that the Registration Statement or Prospectus, as amended or
supplemented, if amended or supplemented, contains any untrue statement
of a material fact or omits a material fact required to be stated
therein or necessary to make the statements therein not misleading;
except that such statement may exclude financial statements, financial
data, and statistical information included in the Registration
Statement and Prospectus.
(c) On or prior to each Closing Date, Xxxxx shall have
been furnished such documents, certificates and opinions as they may
reasonably require for the purpose of enabling them to review the
matters referred to in subsection (b) of this Section 5, and in order
to evidence the accuracy, completeness or satisfaction of the
representations, warranties or conditions herein contained.
(d) Prior to each Closing Date, (i) there shall have
been no material adverse change in the condition or prospects,
financial or otherwise, of the Company or the Bank; (ii) there shall
have been no material transaction, not in the ordinary course of
business, entered into by the Company or the Bank except as set
forth in the Registration Statement and Prospectus, other than
transactions referred to or contemplated therein or to which Xxxxx has
given its written consent; (iii) neither the Company nor the Bank
shall be in default (nor shall an event have occurred which, with
notice or lapse of time, or both, would constitute a default) under
any provision of any material agreement, understanding or instrument
relating to any outstanding indebtedness that is material in amount;
(iv) no action, suit or proceeding, at law or in equity, shall be
pending or threatened against the Company or the Bank before or by any
court or Federal, state or other commission, board or other
administrative agency having jurisdiction over the Company or the
Bank, as the case may be, which is expected to have a material adverse
effect on the Company or the Bank; and (v) no stop order shall have
been issued under the Securities Act and no proceedings therefor shall
have been initiated or be threatened by the Commission.
(e) At each Closing Date, Xxxxx shall have received a
certificate signed by the Chairman of the Board, and the President or
Secretary of the
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Company dated the Firm Shares Closing Date or Optional Shares Closing
Date, as the case may be, to the effect that the conditions set forth
in subsection (d) above have been satisfied and as to the accuracy, as
of the Firm Shares Closing Date or the Optional Shares Closing Date, as
the case may be, of the representations and warranties of the Company
set forth in Section 4 hereof.
(f) At or prior to each Closing Date, Xxxxx shall have
received a "blue sky" memorandum of Xxxxxxxxx Xxxxxx PLLC, counsel for
the Company, addressed to Xxxxx and in form and scope reasonably
satisfactory to Xxxxx, concerning compliance with the blue sky or
securities laws of the states listed in Exhibit B attached to this
Agreement.
(g) All proceedings taken in connection with the sale of
the Shares as herein contemplated shall be reasonably satisfactory in
form and substance to Xxxxx and to counsel for Xxxxx, and Xxxxx shall
have received from counsel for Xxxxx a favorable opinion, dated as of
each Closing Date, with respect to such of the matters set forth under
subsections (b) (i), (iii), (vi), and (xiv) of this Section 5, and with
respect to such other related matters as Xxxxx may reasonably require,
if the failure to receive a favorable opinion with respect to such
other related matters would cause Xxxxx to deem it inadvisable to
proceed with the sale of the Shares.
(h) There shall have been duly tendered to Xxxxx
certificates representing all the Shares agreed to be sold by the
Company on the Firm Shares Closing Date or the Optional Shares Closing
Date, as the case may be.
(i) No order suspending the sale of the Shares prior to
each Closing Date, in any jurisdiction listed in Exhibit B, shall have
been issued on the Firm Shares Closing Date or the Optional Shares
Closing Date, as the case may be, and no proceedings for that purpose
shall have been instituted or, to Roney's knowledge or that of the
Company, shall be contemplated.
(j) The NASD, upon review of the terms of the public
offering of the Shares, shall not have objected to the Underwriter's
participation in the same.
If any condition to the Underwriter's obligations hereunder to
be fulfilled prior to or at the Firm Shares Closing Date or the Optional Shares
Closing Date, as the case may be, is not so fulfilled, Xxxxx may terminate this
Agreement pursuant to Section 9(c) hereof or, if Xxxxx so elects, waive any such
conditions which have not been fulfilled or extend the time of their
fulfillment.
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6. COVENANTS.
The Company covenants and agrees that it will:
(a) Use its best efforts to cause the Registration
Statement to become effective and will notify Xxxxx immediately, and
confirm the notice in writing, (i) when the Registration Statement and
any post-effective amendment thereto becomes effective, (ii) of the
issuance by the Commission of any stop order or of the initiation, or
the threatening, of any proceedings for that purpose and (iii) of the
receipt of any comments from the Commission. The Company will make
every reasonable effort to prevent the issuance of a stop order, and,
if the Commission shall enter a stop order at any time, the Company
will make every reasonable effort to obtain the lifting of such order
at the earliest possible moment.
(b) During the time when a prospectus is required to be
delivered under the Securities Act, comply so far as it is able with
all requirements imposed upon it by the Securities Act, as now and
hereafter amended, and by the Rules, as from time to time in force, so
far as necessary to permit the continuance of sales of or dealings in
the Shares. If at any time when a prospectus relating to the Shares is
required to be delivered under the Securities Act any event shall have
occurred as a result of which, in the reasonable opinion of counsel for
the Company or counsel for Xxxxx, the Registration Statement or
Prospectus as then amended or supplemented includes an untrue statement
of a material fact or omits to state any material fact required to be
stated therein or necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading,
or if it is necessary at any time to amend or supplement the
Registration Statement or Prospectus to comply with the Securities Act,
the Company will notify Xxxxx promptly and prepare and file with the
Commission an appropriate amendment or supplement in form satisfactory
to Xxxxx. The cost of preparing, filing and delivering copies of such
amendment or supplement shall be paid by the Company.
(c) Deliver to the Underwriter such number of copies of
each preliminary prospectus as may reasonably be requested by Xxxxx
and, as soon as the Registration Statement, or any amendment or
supplement thereto, becomes effective, deliver to the Underwriter three
signed copies of the Registration Statement, including exhibits, and
all post-effective amendments thereto and deliver to the Underwriter
such number of copies of the Prospectus, the Registration Statement and
supplements and amendments thereto, if any, without exhibits, as Xxxxx
may reasonably request.
(d) Endeavor in good faith, in cooperation with Xxxxx and
its counsel, at or prior to the time the Registration Statement becomes
effective, to qualify the Shares for offering and sale under the
securities laws relating to the offering or
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sale of the Shares of the states listed in Exhibit B. In each
jurisdiction where such qualification shall be effected, the Company
will, unless Xxxxx agrees that such action is not at the time necessary
or advisable, file and make such statements or reports at such times as
are or may reasonably be required by the laws of such jurisdiction. The
Company will advise Xxxxx promptly of the suspension of the
qualification of the Shares for offering, sale or trading in any
jurisdiction, or any initiation or threat of any proceeding for such
purpose, and in the event of the issuance of any order suspending such
qualification, the Company, with the cooperation of Xxxxx, will use all
reasonable efforts to obtain the withdrawal thereof.
(e) Furnish its security holders as soon as practicable
an earnings statement (which need not be certified by independent
certified public accountants unless required by the Securities Act or
the Rules) covering a period of at least twelve months beginning after
the effective date of the Registration Statement, which shall satisfy
the provisions of Section 11(a) of the Securities Act and the Rules
thereunder.
(f) For a period of five years from the Effective Date,
furnish to its shareholders annual audited consolidated financial
statements with respect to the Company including balance sheets and
income statements.
(g) For a period of five years from the Effective Date,
furnish to Xxxxx the following:
(i) at the time they have been sent to shareholders
of the Company or filed with the Commission three copies of
each annual, quarterly, interim, or current financial and
other report or communication sent by the Company to its
shareholders or filed with the Commission;
(ii) as soon as practicable, three copies of every
press release and every material news item and article in
respect of the Company or the affairs of the Company which was
released by the Company;
(iii) all other information reasonably requested by
Xxxxx with respect to the Company to comply with Rule 15c2-11
of the Rules and Section 4 of Schedule H of the NASD By-Laws;
and
(iv) such additional documents and information with
respect to the Company and its affairs as Xxxxx may from time
to time reasonably request.
(h) Acquire all of the Bank's outstanding capital stock,
free and clear of all liens, encumbrances, or other claims or
restrictions whatsoever (other than
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imposed by Sections 77 and 201 of the Banking Code), for not less than
$11,000,000 from the proceeds of the offering and, in all other
material respects, apply the net proceeds from the offering in the
manner set forth under "Use of Proceeds" in the Prospectus.
(i) Not file any amendment or supplement to the
Registration Statement or Prospectus after the effective date of the
Registration Statement to which Xxxxx shall reasonably object in
writing after being furnished a copy thereof.
(j) Timely file with the Commission reports on Form SR
(if applicable) containing the information required by that Form in
accordance with the provisions of Rule 463 of the Regulation under the
Act.
(k) Comply with all registration, filing and reporting
requirements of the Securities Act or the Exchange Act, which may from
time to time be applicable to the Company.
(l) Cause the proper submission of the Certificate of
Paid-In Capital and Surplus, give advance written notice to the
Commissioner of the Bank's projected opening date, and in all other
respects use reasonable efforts to comply with the requirements of, and
satisfy the conditions of, the FIB Order, the FDIC Order and the
Federal Reserve Board Approval, which are required to be complied with
prior to the Bank commencing the business of banking; provided,
however, that it shall not be a breach of this Section 6(l) for the
Company or the Bank to fail to maintain any specified level of capital,
surplus, capital ratio, valuation reserve or financial or operating
performance after the Bank has commenced the business of banking or to
fail to satisfy any such requirement or condition if such failure is
waived or performance of such requirement or condition is accepted as
sufficient by the FIB, the FDIC, and/or the Federal Reserve Board, as
applicable.
(m) Pay, or reimburse if paid by the Underwriter, whether
or not the transactions contemplated hereby are consummated or this
Agreement is terminated, all costs and expenses incident to the
performance of the obligations of the Company under this Agreement,
including those relating to (1) the preparation, printing, filing and
delivery of the Registration Statement, including all exhibits thereto,
each preliminary prospectus, the Prospectus, all amendments of and
supplements to the Registration Statement and the Prospectus, and the
photocopying of the Underwriting Agreement and related agreements
including, without limitation, the Dealer Agreement; (2) the issuance
of the Shares and the preparation and delivery of certificates for the
Shares to the Underwriter; (3) the registration or qualification of the
Shares for offer and sale under the securities or "blue sky" laws of
the various jurisdictions referred to in Exhibit B, including the fees
and disbursements of counsel in connection with such registration and
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qualification and the preparation and printing of preliminary,
supplemental, and final blue sky memoranda; (4) the furnishing
(including costs of shipping and mailing) to the Underwriter of copies
of each preliminary prospectus, the Prospectus and all amendments of or
supplements to the Prospectus, and of the several documents required by
this Section to be so furnished; (5) the filing requirements and fees
of the NASD in connection with its review of the terms of the public
offering and the underwriting; (6) the furnishing (including costs of
shipping and mailing) of copies of all reports and information required
by Section 6(g); (7) all transfer taxes, if any, with respect to the
sale and delivery of the Shares by the Company to the Underwriter; (8)
the inclusion of the Shares on the OTC Bulletin Board; and (9) the
Underwriter's out-of-pocket expenses, including without limitation,
road show expenses and legal fees of counsel to Xxxxx (such
out-of-pocket expenses and legal fees payable by the Company shall not
exceed $40,000). Upon a successful completion of the offering, the
Underwriter will credit the out-of-pocket and legal fee reimbursement
described in Section 6(m)(9) against the underwriting discount.
(n) Not, without the prior written consent of Xxxxx,
sell, contract to sell or grant any option for the sale of or otherwise
dispose of, directly or indirectly, or register with the Commission,
any shares of Common Stock of the Company (or any securities
convertible into or exercisable for such shares of Common Stock) within
150 days after the date of the Prospectus, except as provided in this
Agreement and except for grants and exercises of Stock Options under
the Stock Option Plan as described in the Prospectus.
(o) For not less than 3 fiscal years after the Effective
Date, unless Xxxxx shall otherwise consent in writing, (i) timely file
with the Commission all reports required by Section 15(d) of the
Exchange Act and not seek suspension of the duty to file such reports,
and (ii) not less frequently than annually prepare a proxy statement
and annual report which conform substantially to the requirements of
Commission Regulation 14A and distribute such proxy statement and
annual report to record and beneficial owners substantially in the
manner which would be required by Commission Regulation 14A if
applicable.
(p) Use its best efforts to cause itself and the Bank to
commence their businesses as described in the Prospectus not later than
____________, 1999.
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7. INDEMNIFICATION.
(a) The Company agrees to indemnify and hold harmless the
Underwriter and each person, if any, who controls the Underwriter
within the meaning of Section 15 of the Securities Act or Section 20 of
the Exchange Act against any and all losses, claims, damages and
liabilities, joint or several (including any reasonable investigation,
legal and other expenses incurred in connection with, and any amount
paid in settlement of, any action, suit or proceeding or any claim
asserted), to which they may become subject under the Securities Act,
the Exchange Act or other Federal or state statutory law or regulation,
at common law or otherwise, insofar as such losses, claims, damages or
liabilities arise out of or are based upon any untrue statement or
alleged untrue statement of a material fact contained in any
preliminary prospectus, the Registration Statement or the Prospectus or
any amendment thereof 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; provided, however, that such indemnity shall
not inure to the benefit of the Underwriter (or any person controlling
the Underwriter) on account of any losses, claims, damages or
liabilities arising from the sale of the Shares in the public offering
to any person by the Underwriter if such untrue statement or omission
or alleged untrue statement or omission was made in such preliminary
prospectus, the Registration Statement or the Prospectus, or such
amendment or supplement, in reliance upon and in conformity with
information furnished in writing to the Company by or on behalf of the
Underwriter specifically for use therein. The Company shall not be
liable hereunder to the Underwriter (or any controlling person thereof)
to the extent that any loss, claim, damage or other liability incurred
by the Underwriter arises from the Underwriter's fraudulent act or
omission.
(b) The Underwriter agrees to indemnify and hold harmless
the Company, each person, if any, who controls the Company within the
meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act, each director of the Company and each officer of the
Company to the same extent as the foregoing indemnity from the Company
to the Underwriter, but only insofar as such losses, claims, damages or
liabilities arise out of or are based upon any untrue statement or
omission or alleged untrue statement or omission which was made in any
preliminary prospectus, the Registration Statement or the Prospectus,
or any amendment thereof or supplement thereto, in reliance upon and in
conformity with information furnished in writing to the Company by the
Underwriter specifically for use therein; provided, however, that the
obligation of the Underwriter to indemnify the Company (including any
controlling person, director or
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officer thereof) hereunder shall be limited to the total price at which
the Shares purchased by the Underwriter hereunder were offered to the
public. The Underwriter shall not be liable hereunder to the Company
(including any controlling person, director or officer thereof) to the
extent that any loss, claim, damage or other liability incurred by the
Company arises from a fraudulent act or omission by the Company.
(c) Any party that proposes to assert the right to be
indemnified under this Section will, promptly after receipt of notice
of commencement of any action, suit or proceeding against such party in
respect of which a claim is to be made against an indemnifying party or
parties under this Section, notify each such indemnifying party of the
commencement of such action, suit or proceeding, enclosing a copy of
all papers served, but the omission so to notify such indemnifying
party of any such action, suit or proceeding shall not relieve it from
any liability that it may have to any indemnified party otherwise than
under this Section. In case any such action, suit or proceeding shall
be brought against any indemnified party and it shall notify the
indemnifying party of the commencement thereof, the indemnifying party
shall be entitled to participate in, and, to the extent that it shall
wish, jointly with any other indemnifying party similarly notified, to
assume the defense thereof, with counsel reasonably satisfactory to
such indemnified party, and after notice from the indemnifying party to
such indemnified party of its election so to assume the defense thereof
and the approval by the indemnified party of such counsel, the
indemnifying party shall not be liable to such indemnified party for
any legal or other expenses, except as provided below and except for
the reasonable costs of investigation subsequently incurred by such
indemnified party in connection with the defense thereof. The
indemnified party shall have the right to employ its counsel in any
such action, but the fees and expenses of such counsel shall be at the
expense of such indemnified party unless (1) the employment of counsel
by such indemnified party has been authorized in writing by the
indemnifying parties, (2) the indemnified party shall have reasonably
concluded that, because of the existence of different or additional
defenses available to the indemnified party or of other reasons, there
may be a conflict of interest between the indemnifying parties and the
indemnified party in the conduct of the defense of such action (in
which case the indemnifying parties shall not have the right to direct
the defense of such action on behalf of the indemnified party) or that,
under the circumstances, it is otherwise appropriate, or (3) the
indemnifying parties shall not have employed counsel to assume the
defense of such action within a reasonable time after notice of the
commencement thereof, in each of which cases the fees and expenses of
counsel shall be at the expense of the indemnifying parties. An
indemnifying party shall not be liable for any settlement of any
action, suit, proceeding or claims effected without its written
consent.
8. CONTRIBUTION. In order to provide for just and equitable
contribution in circumstances in which the indemnification provided for in
Section 7(a) or 7(b) is due in accordance with its terms but for any reason is
held to be unavailable, the Company and the Underwriter shall contribute to the
aggregate losses, claims, damages and liabilities (including any investigation,
legal and other expenses reasonably incurred in connection with, and any
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amount paid in settlement of, any action, suit or proceeding or any claims
asserted, but after deducting any contribution received from other persons), to
which the Company and the Underwriter may be subject, in such proportion so that
the Underwriter is responsible for that portion represented by the percentage
that the underwriting discount appearing on the front cover page of the
Prospectus bears to the public offering price appearing thereon and the Company
is responsible for the balance; provided, however, that (a) in no case shall the
Underwriter be responsible for any amount in excess of the underwriting discount
applicable to the Shares purchased by the Underwriter hereunder and (b) no
person found guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation. For purposes of
this Section, each person, if any, who controls the Underwriter within the
meaning of the Securities Act or the Exchange Act shall have the same rights to
contribution as the Underwriter, and each person, if any, who controls the
Company within the meaning of the Securities Act or the Exchange Act, each
officer and each director of the Company shall have the same rights to
contribution as the Company, subject in each case to clauses (a) and (b) of this
Section. Any party entitled to contribution will, promptly after receipt of
notice of commencement of any action, suit or proceeding against such party in
respect of which a claim for contribution may be made against another party or
parties under this Section, notify such party or parties from whom contribution
may be sought, but the omission so to notify such party or parties from whom
contribution may be sought shall not relieve the party or parties from whom
contribution may be sought from any other obligation it or they may have
hereunder or otherwise than under this Section. No party shall be liable for
contribution with respect to any action, suit, proceeding or claim settled
without its written consent.
In any proceeding relating to the Registration Statement, any
preliminary prospectus, the Prospectus or any supplement thereto or amendment
thereof, each party against whom contribution may be sought under this Section 8
hereby consents to the jurisdiction of any court in Michigan, agrees that
process issuing from such court may be served upon him or it by any other
contributing party and consents to the service of such process and agrees that
any other contributing party may join him or it as an additional defendant in
any such proceeding in which such other contributing party is a party.
9. TERMINATION. This Agreement may be terminated by Xxxxx by
notifying the Company at any time:
(a) before the earliest of (1) 11:00 a.m., Detroit time,
on the business day following the Effective Date, (2) the time of
release by Xxxxx for publication of the first newspaper advertisement
with respect to the Shares and (3) the time when the Shares are first
generally offered by the Underwriter to dealers by letter or telegram;
(b) at or before any Closing Date if, in the judgment of
Xxxxx, payment for and delivery of the Shares is rendered impracticable
or inadvisable because (1) additional material governmental
restrictions, not known to be in force and effect when this Agreement
is signed, shall have been imposed upon
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trading in securities generally or minimum or maximum prices shall have
been generally established on the New York Stock Exchange, on the
American Stock Exchange or on the over-the-counter market, or trading
in securities generally shall have been suspended on either such
Exchange or on the over-the-counter market or a general banking
moratorium shall have been established by federal, New York or Michigan
authorities, (2) a war or other calamity shall have occurred or shall
have accelerated to such an extent as to affect adversely the
marketability of the Shares, (3) the Company or the Bank shall have
sustained a material loss by fire, flood, accident, hurricane,
earthquake, theft, sabotage or other calamity or malicious act, which,
whether or not said loss shall have been insured, will in Roney's
opinion, make it inadvisable to proceed with the offering of the
Shares, (4) the FIB Order, the FDIC Order, or the Federal Reserve Board
Approval shall have been withdrawn or materially altered, or notice
shall have been received to the effect that any of such approvals will
not be received, or, if received, will be subject to conditions that
the Company would not be able to fulfill in a reasonable time in
Roney's reasonable opinion, (5) in Roney's reasonable opinion it is not
probable that the Company and Bank will be able to commence business
before _________, 1999, for any reason, or (6) there shall have been
such material change in the condition, business operations or prospects
of the Company or the market for the Shares or similar securities as in
Roney's judgment would make it inadvisable to proceed with the offering
of the Shares; or
(c) at or before any Closing Date, if any of the
conditions specified in Section 5 or any other agreements,
representations or warranties of the Company in this Agreement shall
not have been fulfilled when and as required by this Agreement.
If this Agreement is terminated pursuant to any of its provisions, except as
otherwise provided in this Agreement, the Company shall not be under any
liability to the Underwriter (other than for obligations assumed in Section 6
hereof), and the Underwriter shall not be under any liability to the Company;
provided, however, that if this Agreement is terminated by Xxxxx because of any
failure, refusal or inability on the part of the Company to comply with the
terms or to fulfill any of the conditions of this Agreement, or for any reasons
provided in subparagraphs (b) (other than (b)(6)) and (c) above, the Company
will reimburse the Underwriter for all accountable out-of-pocket expenses
(including, without limitation, road show expenses and fees and disbursements of
counsel to Xxxxx) up to a maximum of $40,000 (including the $20,000 advance
below) incurred by it in connection with the proposed purchase and sale of the
Shares or in contemplation of performing its obligations hereunder. The
Underwriter acknowledges receipt of a $20,000 advance from the Company. If this
Agreement is terminated for any reason, the Underwriter shall be entitled to
retain such advance as reimbursement for its accountable out-of-pocket expenses;
provided, however, in the event that the accountable out-of-pocket expenses to
be reimbursed under this paragraph are less than $20,000, the Underwriter shall
pay such difference to the Company. If this Agreement is not terminated, the
$20,000 shall be credited at closing against the underwriting discount.
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10. REPRESENTATIONS AND AGREEMENTS TO SURVIVE DELIVERY. All
representations, warranties and agreements contained in this Agreement shall be
deemed to be representations, warranties and agreements at the Closing Dates,
and such representations, warranties and agreements of the Company, including,
without limitation, the payment and reimbursement agreements contained in
Section 6 hereof and the indemnity and contribution agreements contained in
Sections 7 and 8 hereof, shall remain operative and in full force and effect
regardless of any investigation made by or on behalf of the Underwriter or any
controlling person and shall survive termination of this Agreement and/or
delivery of the Shares to and payment for the Shares by the Underwriter pursuant
to this Agreement. In addition, the covenants contained in Section 6 hereof, the
agreements contained in this Section 10 and in Sections 7, 8 and 9 shall survive
termination of this Agreement and/or delivery of the Shares to and payment for
the Shares by the Underwriter pursuant to this Agreement.
11. MISCELLANEOUS. This Agreement has been and is made for the
benefit of the Underwriter, the Company and their respective successors and
assigns, and, to the extent expressed herein, for the benefit of persons
controlling the Underwriter or the Company, and directors and certain officers
of the Company, and their respective successors and assigns, and no other person
, partnership, association or corporation shall acquire or have any right under
or by virtue of this Agreement. The term "successors and assigns" shall not
include any purchaser of Shares from the Underwriter merely because of such
purchase.
If any action or proceeding shall be brought by the
Underwriter or the Company in order to enforce any right or remedy under this
Agreement, the Underwriter and the Company hereby consent to, and agree that
they will submit to, the jurisdiction of the courts of the State of Michigan and
of any Federal court sitting in the State of Michigan.
All notices and communications hereunder shall be in writing
and mailed or delivered or by telephone or telegraph, if subsequently confirmed
in writing, to the Underwriter, Xxxxx, at Xxx Xxxxxxxx, Xxxxxxx, Xxxxxxxx 00000
(facsimile No. (000) 000-0000) (with a copy to Xxxxxx X. Xxxx, Xxxxxxxx Xxxxxx
Xxxxxxxx and Xxxx, 0000 Xxxxx Xxxxxxxx Xxxxxxxx, Xxxxxxx, Xxxxxxxx 00000
(facsimile No. (000) 000-0000)); and to the Company at 0000 Xxxxxx Xxxxxx,
Xxxxxxxxx Xxxx, Xxxxxxxx 00000, Attention: Xxxx X. Xxxxxxx, Chairman of the
Board, President and Chief Executive Officer (with a copy to Xxxxxx X. Xxxxxxxx,
Xxxxxxxxx Xxxxxx PLLC, 000 Xxxxxxxx Xxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxxx 00000
(facsimile No. (000) 000-0000)).
The laws of the State of Michigan shall govern this Agreement,
its construction, and the determination of any rights, duties or remedies of the
parties arising out of or relating to this Agreement. The parties acknowledge
that the United States District Court for the Eastern District of Michigan or
the Michigan Circuit Court for the County of Xxxxx shall have exclusive
jurisdiction over any case or controversy arising out of or relating to this
Agreement and that all litigation arising out of or relating to this Agreement
shall be commenced in the United States District Court for the Eastern District
of Michigan or in the Xxxxx County (Michigan) Circuit Court.
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Please confirm that the foregoing correctly sets forth the agreement
between us.
Very truly yours,
COMMUNITY SHORES BANK CORPORATION
By:
------------------------------
Xxxx X. Xxxxxxx
Its: Chief Executive Officer
Confirmed by Xxxxx,
XXXXX CAPITAL MARKETS,
a division of First Chicago Capital Markets, Inc.
By:
-----------------------------------
Xxxx X. Xxxxxxxx
Managing Director
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EXHIBIT A
---------
Number Relationship
of of Person to
Name Shares to the Company
---- ------ --------------
26
EXHIBIT B
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States
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Florida
Illinois
Indiana
Kentucky
Michigan
Missouri
New Jersey
New York
Ohio
Wisconsin
