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EXHIBIT 1
1,000,000 SHARES
MICHIGAN HERITAGE BANCORP, INC.
COMMON STOCK
UNDERWRITING AGREEMENT
_____________, 1997
▇▇▇▇▇ & Co. L.L.C.
▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Dear Sirs:
Michigan Heritage Bancorp, Inc., a Michigan corporation (the "COMPANY"),
proposes to issue and sell 1,000,000 shares (the "FIRM SHARES") of its
authorized but unissued Common Stock (the "COMMON STOCK") to ▇▇▇▇▇ & Co.
L.L.C., a Delaware limited liability company ("▇▇▇▇▇ & CO." or "UNDERWRITER").
In addition, the Company proposes to grant to the Underwriter an option to
purchase up to an additional 150,000 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, 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 National Association of Securities Dealers,
Inc. (the "NASD")) the number of Shares set forth opposite their respective
names on Exhibit A. To the extent such persons (alone or with such family
members) offer to buy such Shares, the
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Underwriter agrees to purchase up to 300,000 of such Shares at a
purchase price of $10.00 per Share. The purchase price for such
Shares over 300,000 shall be as set forth in Section 1(b) above. 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 ▇▇▇▇▇ & Co.
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 ▇▇▇▇▇ & Co. 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 ▇▇▇▇▇ & Co., ▇▇▇ ▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, 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 ▇▇▇▇▇ &
Co. 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 ▇▇▇▇▇ & Co. specified above at the time and on the date (which
may
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be the Firm Shares Closing Date) specified in the notice referred to
in Section l(c) (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 ▇▇▇▇▇ & Co. 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 l(c), and shall be made available to ▇▇▇▇▇ & Co. for
checking and packaging, at such place as is designated by ▇▇▇▇▇ & Co., 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 ▇▇▇▇▇ & Co. deems 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. 33-4113), 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
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becomes effective as provided by Rule 430A of the Rules. The term
"PROSPECTUS" means the Prospectus as filed with the Commission pursuant to
Rule 424(b) of the Rules or, if no filing pursuant to Rule 424(b) of the
Rules is required, means the form of final prospectus included in the
Registration Statement at the time such Registration Statement becomes
effective. The term "RULE 430A INFORMATION" means information with respect
to the Shares and the offering thereof permitted to be omitted from the
Registration Statement when it becomes effective pursuant to Rule 430A of
the Rules. Reference made herein to any preliminary prospectus or to the
Prospectus shall be deemed to refer to and include any document attached as
an exhibit thereto or incorporated by reference therein, as of the date of
such preliminary prospectus or the Prospectus, as the case may be. The
Company will not file any amendment of the Registration Statement or
supplement to the Prospectus to which ▇▇▇▇▇ & Co. 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.
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(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) ▇▇▇▇▇▇ & ▇▇▇▇▇, LLP, whose report is filed with the Commission as
part of the Registration Statement, are, and during the periods covered by
their report were, independent public accountants as required by the
Securities Act and the Rules.
(e) The Company and its subsidiary, Michigan Heritage Bank, a Michigan
banking corporation (the "BANK"), have been duly organized and are validly
existing as a corporation or banking corporation, as applicable, in good
standing under the laws of the State of Michigan. Neither the Company nor
the Bank have any properties or conduct 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 other than the Bank. 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
____________, 1996, 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
required to be satisfied before the date of this Agreement have been
satisfied. 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 ______________, 1996 (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 _______________, 1997 (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
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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 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 leasehold
interest in the real property located at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, 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.
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(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.
(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.
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(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 been issued in violation of any preemptive
or other right. Upon issuance, sale, and delivery thereof against
payment therefor pursuant to the subscription agreement, all of
the capital stock of the Bank will be duly authorized and validly
issued, fully paid and nonassessable and will be owned by the
Company, free and clear of all liens, encumbrances and security
interests (subject to the provisions of the Michigan Banking Code
of 1969 (the "BANKING CODE"), including, without limitation,
Sections 77 and 201 of the Banking Code). There is no outstanding
option, warrant or other right calling for the issuance of, and no
commitment, plan or arrangement to issue, any share of stock of
the Company or the Bank or any security convertible into or
exchangeable for stock of the Company or the Bank, except for
stock options described in the Registration Statement (the "STOCK
OPTIONS") under the 1996 Employee Stock Option Plan and the 1996
Stock Option Plan for Nonemployee Directors (collectively, the
"STOCK OPTION PLANS"). The Common Stock, the Shares and the Stock
Options conform to all statements in relation thereto contained in
the Registration Statement and the Prospectus.
(q) Subsequent to the respective dates as of which
information is given in the Registration Statement and the
Prospectus, neither the Company nor 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
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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.
(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 180 days from
the date of the Effective Date, they will not offer to sell, sell,
transfer, contract to sell, or grant any option for the sale of or
otherwise dispose of, directly or indirectly, any shares of Common Stock
of the Company (or any securities convertible into or exercisable for such
shares of Common Stock), except for (1) the exercise of Stock Options
under the Stock Option Plans 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 1(b),
above, except with respect to ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 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
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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 ▇▇▇▇▇ & Co.; 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 ▇▇▇▇▇ &
Co.
(b) At each Closing Date, ▇▇▇▇▇ & Co. shall have received the
favorable opinion of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ PLLC, counsel for the Company,
dated the Firm Shares Closing Date or the Optional Shares Closing
Date, as the case may be, addressed to the Underwriter and in form
and scope reasonably satisfactory to counsel for ▇▇▇▇▇ & Co. to
the effect that:
(i) Each of the Company and the Bank (A) is a
corporation or banking corporation, as applicable, existing
and in good standing under the laws of the State of Michigan
and (B) is not required to be qualified to do business in
any jurisdiction outside Michigan.
(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 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
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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
other than the Bank;
(v) When issued, sold, and delivered against payment
therefor in accordance with the terms of the subscription
agreement, the Company will be the registered holder of all
of the outstanding capital stock of the Bank, and all such
shares of stock so held will be validly issued and
outstanding, fully paid and nonassessable and will be owned
free and clear of any liens, encumbrances or other claims or
restrictions whatsoever, subject to the provisions of the
Banking Code, including, without limitation, Sections 77 and
201 of the Banking Code;
(vi) The certificates evidencing the Shares are in the
form approved by the Board of Directors of the Company,
comply with the bylaws and the articles of incorporation of
the Company, comply as to form and in all other material
respects with applicable legal requirements;
(vii) This Agreement has been duly and validly
authorized, executed and delivered by the Company, and is
the legal, valid and binding agreement and obligation of the
Company enforceable in accordance with its terms, except (a)
as enforcement thereof may be limited by bankruptcy,
insolvency, reorganization, moratorium or other laws
relating to or affecting enforcement of creditors' rights or
by general equity principles, whether applied in an action
at law or in equity, or by the discretionary nature of
specific performance, injuncture relief, and other equitable
remedies, including the appointment of a receiver, and (b),
with respect to provisions relating to indemnification and
contribution, to the extent they are held by a court of
competent jurisdiction to be void or unenforceable as
against public policy;
(viii) The Company is conveying to the Underwriter good
and valid title to the Shares, free and clear of any liens,
encumbrances, security interests, restrictions, and adverse
claims;
(ix) To the best of such counsel's knowledge, after due
inquiry, there are (A) no contracts or other documents which
are required to be
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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 and properly described therein;
(x) The statements in the Registration Statement and
the Prospectus, insofar as they are descriptions of
corporate documents, stock option plans, contracts,
agreements or other documents specifically identified in the
Registration Statement or descriptions of laws, regulations,
or regulatory requirements, or refer to compliance with law
or to statements of law or legal conclusions, are correct in
all material respects;
(xi) To the best of such counsel's knowledge, after due
inquiry, the execution, delivery and performance of this Agreement,
the consummation of the transactions herein contemplated and the
compliance with the terms and provisions hereof by the Company will
not give rise to a right to terminate or accelerate the due date of
any payment due under, or conflict with or result in a breach of any
of the terms or provisions of, or constitute a default (or an event
which, with notice or lapse of time, or both, would constitute a
default) under, or require any consent under, or result in the
execution or imposition of any lien, charge or encumbrance upon any
properties or assets of the Company or 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;
(xii) To the best of such counsel's knowledge, after
due inquiry, no consent, approval, authorization or order of
any court or governmental
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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;
(xiii) 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; or (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;
(xiv) 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
(xv) 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 Company (as to matters of fact), and include customary
qualifications in its opinion as are acceptable to ▇▇▇▇▇ & Co. Copies of
all such certificates shall be furnished to counsel to ▇▇▇▇▇ & Co. on the
Closing Date.
In addition, such counsel shall state that they have participated in
conferences with officers of the Company and representatives 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
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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, ▇▇▇▇▇ & Co. 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 ▇▇▇▇▇
& Co. 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, ▇▇▇▇▇ & Co. shall have received a
certificate signed by the Chairman of the Board and the President of the
Company dated the Firm Shares Closing Date or Optional Shares Closing
Date, as the case may be, to the effect that the conditions set forth in
subsection (d) above have been satisfied and as to the accuracy, as of the
Firm Shares Closing Date or the Optional Shares Closing Date, as the case
may be, of the representations and warranties of the Company set forth in
Section 4 hereof.
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(f) At or prior to each Closing Date, ▇▇▇▇▇ & Co. shall have
received a "blue sky" memorandum (upon which ▇▇▇▇▇ & Co. may rely)
of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ PLLC, counsel for the Company, addressed to
▇▇▇▇▇ & Co. and in form and scope reasonably satisfactory to ▇▇▇▇▇
& Co. 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 ▇▇▇▇▇ & Co. and to counsel for ▇▇▇▇▇ & Co.,
and ▇▇▇▇▇ & Co. shall have received from counsel for ▇▇▇▇▇ & Co. a
favorable opinion, dated as of each Closing Date, with respect to
such of the matters set forth under Subsections (b) (i), (iii),
(vi), (vii), and (xv) of this Section 5, and with respect to such
other related matters as ▇▇▇▇▇ & Co. may require, if the failure
to receive a favorable opinion with respect to such other related
matters would cause ▇▇▇▇▇ & Co. to deem it inadvisable to proceed
with the sale of the Shares.
(h) There shall have been duly tendered to ▇▇▇▇▇ & Co.
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 ▇▇▇▇▇ & Co.'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, ▇▇▇▇▇ & Co. may terminate
this Agreement pursuant to Section 9(c) hereof or, if ▇▇▇▇▇ & Co. so elects,
waive any such conditions which have not been fulfilled or extend the time of
their fulfillment.
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 ▇▇▇▇▇ & Co. immediately, and confirm the
notice in
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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 ▇▇▇▇▇ & Co., the Registration Statement or Prospectus as then
amended or supplemented includes an untrue statement of a material
fact or omits to state any material fact required to be stated
therein or necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading,
or if it is necessary at any time to amend or supplement the
Registration Statement or Prospectus to comply with the Securities
Act, the Company will notify ▇▇▇▇▇ & Co. promptly and prepare and
file with the Commission an appropriate amendment or supplement in
form satisfactory to ▇▇▇▇▇ & Co. 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 ▇▇▇▇▇ & Co. 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 ▇▇▇▇▇ & Co. may reasonably request.
(d) Endeavor in good faith, in cooperation with ▇▇▇▇▇ & Co.
and its counsel, at or prior to the time the Registration
Statement becomes effective, to qualify the Shares for offering
and sale under the securities laws relating to the offering or
sale of the Shares of the states listed in Exhibit B. In each
jurisdiction where such qualification shall be effected, the
Company will, unless ▇▇▇▇▇ & Co. agrees that such action is not at
the time necessary or advisable, file and make
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such statements or reports at such times as are or may reasonably be
required by the laws of such jurisdiction. The Company will advise ▇▇▇▇▇
& Co. 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 ▇▇▇▇▇ & Co., 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 and quarterly unaudited
consolidated financial statements with respect to the Company
including balance sheets and income statements.
(g) For a period of five years from the Effective Date,
furnish to ▇▇▇▇▇ & Co. 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 ▇▇▇▇▇ & Co.
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 ▇▇▇▇▇ & Co. 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, for not less
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than $7,500,000 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 ▇▇▇▇▇ & Co. 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; 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 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 printing 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 ▇▇▇▇▇
& Co. (such out-of-pocket expenses and legal fees payable by the
Company shall not exceed $50,000). Upon a successful completion
of the offering, if the Underwriter purchases the Firm Shares and
all of the Optional Shares, the Underwriter will credit the
out-of-pocket and legal fee reimbursement described in Section
6(m)(9) against the underwriting discount. Upon a successful
completion of the offering, if the Underwriter purchases the Firm
Shares, but less than all of the Optional Shares, the Underwriter
will credit $25,000 of 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 ▇▇▇▇▇ & Co.,
sell, contract to sell or grant any option for the sale of or
otherwise dispose of, directly or indirectly, or register with the
Commission, any shares of Common Stock of the Company (or any
securities convertible into or exercisable for such shares of
Common Stock) within 180 days after the date of the Prospectus,
except as provided in this Agreement and except for grants and
exercises of Stock Options under the Stock Option Plans as
described in the Prospectus.
(o) For not less than 3 fiscal years after the Effective Date,
maintain the Exchange Act registration of the Common Stock, unless the
Company's shareholders direct the Company to reregister the Common Stock.
(p) Use its best efforts to cause itself and the Bank to
commence their businesses as described in the Prospectus not later
than March 31, 1997.
(q) Not, for one year after the Effective Date, issue any
stock options to purchase Common Stock under either of the Stock
Option Plans, or any other stock option plan of the Company, that
have an exercise price of less than $10 per share.
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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 who signs the
Registration Statement, 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 officer thereof) hereunder
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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.
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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 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 of the Company
who shall have signed the Registration Statement 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 ▇▇▇▇▇ & Co. by
notifying the Company at any time:
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(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 ▇▇▇▇▇ & Co. 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
▇▇▇▇▇ & Co., 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
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 ▇▇▇▇▇ & Co.'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 ▇▇▇▇▇ & Co.'s reasonable opinion, (5) in ▇▇▇▇▇ & Co.'s
reasonable opinion it is not probable that the Company and Bank
will be able to commence business before December 31, 1996, 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 ▇▇▇▇▇ & Co.'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 ▇▇▇▇▇ & Co.
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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) and (c) above, the Company will
(1) pay the Break Up Fee (as defined below), if and when required below, and (2)
reimburse the Underwriter for all accountable out-of-pocket expenses (including,
without limitation, road show expenses and fees and disbursements of counsel to
▇▇▇▇▇ & Co.) up to a maximum of $65,000 (including the $15,000 advance described
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 $15,000 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 $15,000, the Underwriter shall
pay such difference to the Company. If this Agreement is not terminated, the
$15,000 shall be credited at closing against the underwriting discount. A
"BREAK UP FEE" of 3% of any capital raised (either publicly or privately) by the
Company shall be paid to ▇▇▇▇▇ & Co. by the Company upon completion of such
capital raising if the Company raises such capital at any time or times within
one year after this Agreement is terminated by ▇▇▇▇▇ & Co. because of any
failure, refusal or inability on the part of the Company to comply with the
terms or to fulfill any of the conditions of the Agreement, or for any reasons
provided in subparagraphs (b) and (c) above.
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.
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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 ▇▇▇▇▇ & Co., at ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (facsimile No.
(▇▇▇) ▇▇▇-▇▇▇▇) (with a copy to ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, ▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇.▇., ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
(facsimile No. (▇▇▇) ▇▇▇-▇▇▇▇)); and to the Company at ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, President (facsimile No.
(▇▇▇) ▇▇▇-▇▇▇▇) (with a copy to ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ PLLC, ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (facsimile No. (▇▇▇) ▇▇▇-▇▇▇▇).
This Agreement shall be construed in accordance with the laws of the
State of Michigan, without giving effect to principles of conflicts of laws.
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Please confirm that the foregoing correctly sets forth the agreement
between us.
Very truly yours,
MICHIGAN HERITAGE BANCORP, INC.
By:
----------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Its: Chairman of the Board
And by:
----------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Its President
Confirmed by ▇▇▇▇▇ & Co.
▇▇▇▇▇ & CO. L.L.C.
By:
---------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Director, Corporate Finance 158013
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EXHIBIT A
Number Relationship
of of Person to
Name Shares to the Company
---- ------ --------------
28
EXHIBIT B
States
------
Michigan
Florida
Illinois
Indiana
New Jersey
New York
Ohio