1
EXHIBIT 1.1
CAPITOL TRUST I
8.50% CUMULATIVE TRUST PREFERRED SECURITIES
UNDERWRITING AGREEMENT
December 15,1997
XXXXXX X. XXXXX & CO. INCORPORATED
XXXXXX, XXXXXXXX & COMPANY INCORPORATED
XXXX XXXXXX INVESTMENTS, INC.
c/o Xxxxxx X. Xxxxx & Co. Incorporated
000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxx 00000
Ladies and Gentlemen:
SECTION 1. Introductory. Capitol Bancorp Ltd., a Michigan
corporation (the "Company"), and its financing subsidiary Capitol Trust I, a
Delaware business trust (the "Trust," and hereinafter together with the Company
the "Offerors"), propose that the Trust issue and sell 2,200,000 of the Trust's
8.50% Cumulative Trust Preferred Securities with a liquidation amount of
$10.00 per preferred security representing undivided beneficial interests in
the assets of the Trust (the "Preferred Securities"), to be issued under the
Trust Agreement (as hereinafter defined), the terms of which are more fully
described in the Prospectus (as hereinafter defined) to Xxxxxx X. Xxxxx & Co.
Incorporated, Xxxxxx, Xxxxxxxx & Company Incorporated and Xxxx Xxxxxx
Investments, Inc. (the "Underwriters"), who are acting severally and not
jointly. The aforementioned Preferred Securities to be sold to the
Underwriters are herein called "Firm Preferred Securities." In addition, the
Offerors have agreed to grant to the Underwriters an option to purchase up to
330,000 additional Preferred Securities (the "Option Preferred Securities") as
provided in section 5(c) hereof. The Firm Preferred Securities and, to the
extent such option is exercised, the Option Preferred Securities are
hereinafter collectively referred to as the "Designated Preferred Securities."
The Offerors propose that the Trust issue the Designated Preferred
Securities pursuant to an Amended and Restated Trust Agreement among The First
National Bank of Chicago, as Property Trustee, First Chicago Delaware, Inc., as
Delaware Trustee, the Administrative Trustee named therein, and the Company in
substantially the form previously delivered to the Underwriters. This trust
agreement is referred to in this Agreement as the "Trust Agreement." The
Company will purchase from the Trust its common securities ("Common
Securities"). In connection with the issuance of the Designated Preferred
Securities, the Company proposes (i) to issue its Subordinated Debentures (the
"Debentures") pursuant to an Indenture, dated as of December 18, 1997, between
the Company and The First National Bank of Chicago as Indenture Trustee
(the "Indenture") and (ii) to guarantee the Designated Preferred Securities
pursuant to a Guarantee Agreement, dated as of December 18, 1997, between
the Company and The First National Bank of Chicago, as Guarantee Trustee (the
2
Xxxxxx X. Xxxxx & Co. Incorporated
December 15, 1997
Page 2
"Guarantee"), to the extent described in the Guarantee. Pursuant to an
Agreement as to Expenses and Liabilities, dated as of December 18, 1997,
between the Company and the Trust ("Expense Agreement"), the Company
has guaranteed payment of all of the Trust's costs, expenses and liabilities
other than obligations of the Trust to pay holders of the Designated Preferred
Securities amounts due such holders pursuant to the terms of the Designated
Preferred Securities. The Trust Agreement, the Indenture, Guarantee, Expense
Agreement and this Agreement are collectively referred to in this Agreement as
the "Operative Documents." Capitalized terms used in this Agreement without
definition have the respective meanings specified in the Prospectus (as
hereinafter defined).
The Underwriters have advised the Offerors that the Underwriters
propose to make a public offering of their respective portion of the Designated
Preferred Securities as soon hereafter as in their judgment is advisable and
that the public offering price of the Designated Preferred Securities initially
will be $10.00 per security.
The Offerors hereby confirm their agreements with the Underwriters as
follows:
SECTION 2. Representations and Warranties of the Offerors. The
Offerors, jointly and severally, represent and warrant to, and agree with, the
several Underwriters, and shall be deemed to represent and warrant to the
several Underwriters on each Closing Date (as hereinafter defined), that:
(a) The Company and each of the subsidiaries of the
Company (both directly and indirectly owned) that are listed in the Company's
Annual Report on Form 10-KSB for the year ended December 31, 1996, and its
Quarterly Report on Form 10Q for the nine months ended September 30, 1997
("Recent SEC Reports") incorporated by reference into the Registration
Statement (as hereinafter defined) (individually, a "Subsidiary" and
collectively, the "Subsidiaries") has been duly incorporated and is validly
existing as a corporation and in good standing under the laws of its
jurisdiction of incorporation, with full corporate power and authority to own,
lease and operate its properties and to conduct its business as presently
conducted and described in the Prospectus (as hereinafter defined) and the
Registration Statement; each of the Company and the Subsidiaries is duly
registered and qualified to do business as a foreign corporation under the laws
of, and is in good standing as such in, each jurisdiction in which such
registration or qualification is required, except where the failure to so
register or qualify would not have a material adverse effect on the condition
(financial or other), business, property, net worth, results of operations or
prospects of the Company and the Subsidiaries, taken as a whole ("Material
Adverse Effect"); and no proceeding has been instituted in any such
jurisdiction revoking, limiting or curtailing, or seeking to revoke, limit or
curtail, such power and authority or qualification. Complete and correct
copies of the Articles of Incorporation and Bylaws, as amended or restated
("Articles of Incorporation" and "Bylaws," respectively), of the Company and
each of the Subsidiaries as in effect on the date hereof have been delivered to
the Underwriters and no changes thereto will be made on or subsequent to the
date hereof and prior to each Closing Date. Each of the Company and Sun
Community Bancorp Limited, a second tier
3
Xxxxxx X. Xxxxx & Co. Incorporated
December 15, 1997
Page 3
bank holding company incorporated under the laws of Arizona, is duly registered
as a bank holding company under the Bank Holding Company Act of 1956, as
amended ("Bank Holding Company Act"). The deposit accounts of each Subsidiary
that is a bank ("Bank Subsidiary") are insured by the Bank Insurance Fund
administered by the Federal Deposit Insurance Corporation (the "FDIC") up to
the maximum amount provided by law, except to the extent the Prospectus
discloses such deposit accounts are insured by the Savings Association
Insurance Fund administered by the FDIC and to such extent the deposit
accounts are so insured up to the maximum amount provided by law; and no
proceedings for the modification, termination or revocation of such insurance
are pending or, to the knowledge of the Company, threatened.
(b) The Trust has been duly created and is validly
existing as a statutory business trust in good standing under the Delaware
Business Trust Act with the power and authority (trust and other) to own its
property and conduct its business as described in the Registration Statement
and Prospectus, to issue and sell its common securities to the Company pursuant
to the Trust Agreement, to issue and sell the Designated Preferred Securities,
to enter into and perform its obligations under the Operative Documents, as
applicable, and the Designated Preferred Securities and to consummate the
transactions herein contemplated; the Trust has no subsidiaries and is duly
qualified to transact business; the Trust has conducted and will conduct no
business other than the transactions contemplated by this Agreement and
described in the Prospectus; the Trust is not a party to or bound by any
agreement or instrument other than the applicable Operative Documents and the
agreements and instruments contemplated by the Trust Agreement and described in
the Prospectus; the Trust has no liabilities or obligations other than those
arising out of the transactions contemplated by this Agreement and the Trust
Agreement and described in the Prospectus; the Trust is not a party to or
subject to any action, suit, or proceeding of any nature; the Trust is not, and
at the Closing Date or any Option Closing Date will not be, to the knowledge of
the Offerors, classified as an association taxable as a corporation for United
States federal income tax purposes; and the Trust is, and as of the Closing
Date or any Option Closing Date will be, treated as a consolidated subsidiary
of the Company pursuant to generally accepted accounting principles.
(c) The capital stock of the Company and the common
securities of the Trust conform to the description thereof contained in the
Prospectus and the Registration Statement and have been duly authorized and are
validly issued, fully paid and nonassessable, and no such shares were issued in
violation of the preemptive or similar rights of a security holder of either
Offeror. Except as described in the Prospectus, there are no outstanding
options, warrants or other rights of any description, contractual or otherwise,
entitling any person to be issued any class of security of the Company, the
Trust, or any Subsidiary.
(d) Except for the Subsidiaries and the Trust, and as
otherwise set forth in the Prospectus, the Offerors have no subsidiaries and do
not own any equity interest in or control, directly or indirectly, any other
corporation, limited liability company, partnership, joint venture,
association, trust or other business organization. Except as stated in the
Company's Recent SEC Reports, the Company owns directly all of the issued and
outstanding capital securities of the
4
Xxxxxx X. Xxxxx & Co. Incorporated
December 15, 1997
Page 4
Trust and each Subsidiary, free and clear of any and all liens, claims,
encumbrances or security interests, and all such capital securities have been
duly authorized and validly issued and is fully paid and nonassessable (except
to the extent provided in 12 U.S.C. Section 55, 12 U.S.C. Section 1831o, or
Section 201 of the Michigan Banking Code of 1969, as amended). There are no
outstanding options, warrants or other rights of any description, contractual
or otherwise, entitling any person to subscribe for or purchase any shares of
capital securities of the Trust or any Subsidiary.
(e) The Company has full corporate power and authority to
enter into and perform this Agreement, and the execution and delivery by the
Company of this Agreement and the performance by the Company of its obligations
under the Operative Documents and the consummation of the transactions
described herein, have been duly authorized with respect to the Company by all
necessary corporate or other action and will not: (i) violate any provisions
of the Articles of Incorporation or Bylaws or governing documents of the
Company or any Subsidiary; (ii) violate any provisions of, or result in the
breach, modification or termination of, or constitute a default under, any
provision of any agreement, lease, franchise, license, indenture, permit,
mortgage, deed of trust, evidence of indebtedness or other instrument to which
the Company or any Subsidiary is a party or by which the Company or any
Subsidiary, or any property owned or leased by the Company or any Subsidiary,
may be bound or affected; (iii) violate any statute, ordinance, rule or
regulation applicable to the Company or any Subsidiary, or order or decree of
any court, regulatory or governmental body, arbitrator, administrative agency
or instrumentality of the United States or other country or jurisdiction having
jurisdiction over the Company or any Subsidiary; or (iv) result in the creation
or imposition of any lien, charge or encumbrance upon any property or assets of
the Company or any Subsidiary. No consent, approval, authorization or other
order of any court, regulatory or governmental body, arbitrator, administrative
agency or instrumentality of the United States or other country or jurisdiction
is required for the execution and delivery of the Operative Documents by the
Company, the performance of its obligations under the Operative Documents or
the consummation of the transactions contemplated hereby, except for compliance
with the Act, the Securities Exchange Act of 1934, as amended, and the
regulations thereunder (together, the "Exchange Act"), the Blue Sky Laws
applicable to the public offering of the Designated Preferred Securities by the
several Underwriters and the clearance of such offering and the underwriting
arrangements evidenced hereby with the National Association of Securities
Dealers, Inc. (the "NASD"). This Agreement has been duly executed and
delivered by and on behalf of the Company and is a valid and binding agreement
of the Company enforceable against the Company in accordance with its terms.
(f) A registration statement on Form S-3 (Reg. Nos.
333-41215 and 333-41215-01) with respect to the Designated Preferred
Securities, the Guarantee, and up to $26,082,474 aggregate principal amount of
Debentures, including a preliminary form of prospectus, has been carefully
prepared by the Offerors in conformity with the requirements of the Act and the
Trust Indenture Act of 1939, as amended (the "Trust Indenture Act"), and has
been filed with the Securities and Exchange Commission (the "Commission"). The
conditions for use of Form S-3, set forth in the
5
Xxxxxx X. Xxxxx & Co. Incorporated
December15, 1997
Page 5
General Instructions thereto, have been satisfied. Such registration
statement, as finally amended and revised at the time such registration
statement was or is declared effective by the Commission (including the
information contained in the form of final prospectus, if any, filed with the
Commission pursuant to Rule 424(b) and Rule 430A under the Act and deemed to be
part of the registration statement if the registration statement has been
declared effective pursuant to Rule 430A(b)) and as thereafter amended by
post-effective amendment, if any, is herein referred to as the "Registration
Statement." The related final prospectus in the form first filed with the
Commission pursuant to Rule 424(b) or, if no such filing is required, as
included in the Registration Statement, or any supplement thereto, is herein
referred to as the "Prospectus." The prospectus subject to completion in the
form included in the Registration Statement at the time of the initial filing
of the Registration Statement with the Commission, and each such prospectus as
amended from time to time until the date of the Prospectus, is referred to
herein as the "Preliminary Prospectus." Reference made herein to each
Preliminary Prospectus or the Prospectus, as amended or supplemented, shall
include all documents and information incorporated by reference therein and
shall be deemed to refer to and include any documents filed after the date of
such Preliminary Prospectus or Prospectus, as the case may be, and so
incorporated by reference, under the Exchange Act. The Offerors have prepared
and filed such amendments to the Registration Statement since its initial
filing with the Commission, if any, as may have been required to the date
hereof, and will file such additional amendments thereto as may hereafter be
required. There have been delivered to the Underwriters signed copies of the
Registration Statement and each amendment thereto, if any, including any
document filed under the Exchange Act and deemed to be incorporated by
reference into the Registration Statement, together with copies of each exhibit
filed therewith or incorporated by reference therein, and such number of
conformed copies for each of the Underwriters of the Registration Statement and
each amendment thereto, if any (but without exhibits), and of each Preliminary
Prospectus and of the Prospectus as the Underwriters have requested. The date
on which the Registration Statement becomes effective is hereinafter referred
to as the Effective Date. Each copy of the Registration Statement and each
Preliminary Prospectus and the Prospectus delivered to the Underwriters for use
in connection with this offering was substantively identical to the
electronically transmitted copies thereof filed with the Commission pursuant to
the Commission's Electronic Data Gathering Analysis and Retrieval system
("XXXXX").
(g) Neither the Commission nor any state securities
commission has issued any order preventing or suspending the use of any
Preliminary Prospectus, nor, to the knowledge of the Offerors, have any
proceedings for that purpose been initiated or threatened, and each Preliminary
Prospectus filed with the Commission as part of the Registration Statement as
originally filed or as part of any amendment or supplement thereto complied
when so filed with the requirements of the Act and, as of its date, did not
include any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading. As of the Effective Date, and at all times subsequent thereto
up to each Closing Date, the Registration Statement and the Prospectus
contained or will contain all statements that are required to be stated therein
in accordance with the Act and conformed or will conform in all respects to the
requirements of the Act, and neither the Registration Statement
6
Xxxxxx X. Xxxxx & Co. Incorporated
December 15, 1997
Page 6
nor the Prospectus included or will include any untrue statement of a material
fact or omitted or will omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading. Neither
the Offerors, nor any person that controls, are controlled by (including the
Subsidiaries) or are under common control with the Offerors, has distributed or
will distribute prior to each Closing Date any offering material in connection
with the offering and sale of the Designated Preferred Securities other than a
Preliminary Prospectus, the Prospectus, the Registration Statement or other
materials permitted by the Act and provided to the Underwriters.
(h) The reports filed with the Commission by the Company
under the Exchange Act at the time they were filed with the Commission,
complied as to form in all material respects with the requirements of the
Exchange Act and did not contain an untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances in which they were made, not
misleading.
(i) The documents that are incorporated by reference in
each Preliminary Prospectus, the Prospectus or the Registration Statement or
from which information is so incorporated by reference, when they became
effective or were filed with the Commission, as the case may be, complied with
the requirements of the Act or the Exchange Act, as applicable, and any
document so filed and incorporated by reference subsequent to the effective
date of the Registration Statement shall, when it is filed with the Commission,
comply with the requirements of the Act and the Exchange Act, as applicable,
and when read together with the other information included in such Preliminary
Prospectus, the Prospectus or the Registration Statement, as the case may be,
do not contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading.
(j) BDO Xxxxxxx LLP which has expressed its opinion with
respect to the consolidated financial statements and schedules filed with the
Commission or incorporated by reference and included as a part of each
Preliminary Prospectus, the Prospectus or the Registration Statement are
independent accountants as required by the Act.
(k) The consolidated financial statements and the related
notes thereto included or incorporated by reference in each Preliminary
Prospectus, the Prospectus and the Registration Statement present fairly the
financial position, results of operations and cash flows of the Company and the
Subsidiaries as of their respective dates or for the respective periods covered
thereby, all in conformity with generally accepted accounting principles
consistently applied throughout the periods involved. The financial statement
schedules, if any, included in the Registration Statement present fairly the
information required to be stated therein on a basis consistent with the
consolidated financial statements of the Company and Subsidiaries contained
therein. The Company and Subsidiaries had an outstanding capitalization as set
forth in the Registration Statement and under "Capitalization" in the
Prospectus as of the date indicated therein, and there has been no material
change thereto since such date except as disclosed in the
7
Xxxxxx X. Xxxxx & Co. Incorporated
December 15, 1997
Page 7
Prospectus. The financial and statistical information and data relating to the
Company and Subsidiaries in each Preliminary Prospectus, the Prospectus and the
Registration Statement are accurately presented and prepared on a basis
consistent with the audited consolidated financial statements and books and
records of the Company and Subsidiaries. The consolidated financial statements
and schedules and the related notes thereto included or incorporated by
reference in each Preliminary Prospectus, the Prospectus or the Registration
Statement are the only such financial statements and schedules required under
the Act to be set forth therein.
(l) The Trust is not in violation of the trust
certificate of the Trust filed with the State of Delaware (the "Trust
Certificate") or the Trust Agreement, and neither the Company nor any of its
Subsidiaries is in violation of its Articles of Incorporation or By-laws; none
of the Trust, the Company or any of its Subsidiaries is in default in the
performance or observance of any obligation, agreement, covenant or condition
contained in any contract, indenture, mortgage, deed of trust, loan or credit
agreement, note, lease or other agreement or instrument to which it is a party
or by which it or any of them may be bound, or to which any of its property or
assets is subject (collectively, "Agreements and Instruments") except for such
defaults under Agreements and Instruments that would not result in a Material
Adverse Effect; and (A) the execution, delivery and performance of the
Operative Documents by the Trust or the Company, as the case may be, (B) the
issuance, sale and delivery of the Preferred Securities, the Subordinated
Debentures, and the Guarantee, (C) the consummation of the transactions
contemplated by the Operative Documents, and (D) compliance by the Offerors
with the terms of the Operative Documents to which they are a party have been
duly authorized by all necessary corporate action on the part of the Company
and, with respect to the matters described in sub-clauses (A), (B), (C) and (D)
of this Agreement, at the Closing Time, will have been duly authorized by all
necessary action on the part of the Trust, and none of the actions referred to
in subclause (A) through (C) above violate, conflict with or constitute a
breach of or, default or Repayment Event (as defined below), and will not,
whether with or without the giving of notice or passage of time or both,
violate, conflict with or constitute a breach of, or default or Repayment Event
under, or result in the creation or imposition of any security interest,
mortgage, pledge, lien, charge, encumbrance or equitable right upon any
property or assets of the Trust, the Company, or any of the Company's
Subsidiaries pursuant to, the Agreements and Instruments (except for such
conflicts, violations, breaches or defaults or liens, charges or encumbrances
that would not result in a Material Adverse Effect), nor will such action
result in any violation of the provisions of the Articles of Incorporation or
By-laws of the Company or any of its Subsidiaries or the Trust Agreement or the
Trust Certificate or violation by the Company or any of its Subsidiaries of any
applicable law, statute, rule, regulation, judgment, order, writ or decree of
any government, government authority, agency or instrumentality or court,
domestic or foreign, including, without limitation, the Board of Governors of
the Federal Reserve System, the Office of the Comptroller of the Currency, the
Michigan Financial Institutions Bureau, the Arizona Department of Banking, and
the Federal Deposit Insurance Corporation (each, a "Government Entity"). As
used in this Agreement, a "Repayment Event" means any event or condition which
gives the holder of any note, debenture or other evidence of indebtedness (or
any person acting on such holder's behalf) the right to require the repurchase,
redemption or repayment of all or a portion of such
8
Xxxxxx X. Xxxxx & Co. Incorporated
December 15, 1997
Page 8
indebtedness by the Trust, the Company or any of the Company's Subsidiaries.
Neither of the Offerors nor any Subsidiary has received notice of any violation
of any applicable statute, ordinance, order, rule or regulation applicable to
either of the Offerors or any Subsidiary. The Offerors and each Subsidiary
have obtained and hold, and are in compliance with, all permits, certificates,
licenses, approvals, registrations, franchises, consents and authorizations of
governmental or regulatory authorities required under all laws, rules and
regulations in connection with their businesses (hereinafter "permit" or
"permits"), and all of such permits are in full force and effect; and the
Offerors and each Subsidiary have fulfilled and performed all of their
respective obligations with respect to each such permit and no event has
occurred which would result in, or after notice or lapse of time would result
in, revocation or termination of any such permit or result in any other
impairment of the rights of the holder of such permit. Neither of the Offerors
nor any Subsidiary is or has been (by virtue of any action, omission to act,
contract to which it is a party or other occurrence) in violation of any
applicable foreign, federal, state, municipal or local statutes, laws,
ordinances, rules, regulations or orders (including those relating to
environmental protection, occupational safety and health and equal employment
practices) heretofore or currently in effect.
(m) There are no legal or governmental proceedings or
investigations pending or, to the knowledge of the Offerors, threatened to
which the Offerors or any Subsidiary are or may be a party or to which any
property owned or leased by either of the Offerors or any Subsidiary is or may
be subject, including, without limitation, any such proceedings that are
related to environmental or employment discrimination matters, which are
required to be described in the Registration Statement or the Prospectus which
are not so described, or which question the validity of this Agreement or any
action taken or to be taken pursuant hereto. Except as described in the
Registration Statement or the Prospectus, neither of the Offerors nor any
Subsidiary: (i) is in violation of any statute, ordinance, rule or regulation,
or any decision, order or decree of any court, regulatory body, arbitrator,
administrative agency or other instrumentality of the United States or other
country or jurisdiction having jurisdiction over the Offerors or such
Subsidiary relating to the use, disposal or release of hazardous or toxic
substances or relating to the protection or restoration of the environment or
human exposure to hazardous or toxic substances (collectively, "environmental
laws"); (ii) owns or operates any real property contaminated with any substance
that is subject to any environmental laws; (iii) is liable for any off-site
disposal or contamination pursuant to any environmental laws; or (iv) is
subject to any claim relating to any environmental laws, which violation,
contamination, liability or claim could have a Material Adverse Effect.
(n) There is no transaction, relationship, contract,
instrument, obligation, agreement or other document required to be described in
the Registration Statement or the Prospectus or to be filed or deemed to be
filed as an exhibit to the Registration Statement by the Act, which has not
been described or filed as required. All such contracts or agreements to which
the Offerors or any Subsidiary is a party have been duly authorized, executed
and delivered by the Offerors or such Subsidiary, constitute valid and binding
agreements of the
9
Xxxxxx X. Xxxxx & Co. Incorporated
December 15, 1997
Page 9
Offerors or such Subsidiary, and are enforceable by and against the Offerors or
such Subsidiary, in accordance with the respective terms thereof.
(o) The Company or Subsidiaries have good and valid title
to all property and assets reflected as owned by the Company or such Subsidiary
in the Company's consolidated financial statements included or incorporated by
reference in the Registration Statement (or elsewhere in the Registration
Statement or the Prospectus), free and clear of all liens, claims, mortgages,
security interests or other encumbrance of any kind or nature whatsoever except
those, if any, reflected in such financial statements (or elsewhere in the
Registration Statement or the Prospectus). All property (real and personal)
held or used by the Company or a Subsidiary under leases, licenses, franchises
or other agreements is held by the Company or such Subsidiary under valid,
subsisting, binding and enforceable leases, franchises, licenses or other
agreements.
(p) Neither of the Offerors nor any person that controls,
is controlled by (including the Subsidiaries) or is under common control with
the Offerors has taken or will take, directly or indirectly, any action
designed to cause or result in, or which constituted, or which could cause or
result in, stabilization or manipulation, under the Exchange Act or otherwise,
of the price of any security of either of the Offerors to facilitate the sale
or resale of the Designated Preferred Securities.
(q) Except as described in the Registration Statement or
the Prospectus, since the respective dates as of which information is given in
the Registration Statement or the Prospectus and prior to each Closing Date:
(i) neither of the Offerors nor any Subsidiary has or will have incurred any
liability or obligation, direct or contingent, or entered into any transaction,
that is material to the Offerors, except as in the ordinary course of business;
(ii) neither of the Offerors has and will not have paid or declared any
dividend or other distribution with respect to its capital securities and
neither of the Offerors nor any Subsidiary are or will be delinquent in the
payment of principal or interest on any outstanding debt obligation; (iii)
there has not been and will not have been any change in the capital securities,
any material change in the indebtedness of either of the Offerors or any
Subsidiary, or any change or development involving or which could be expected
to involve, a Material Adverse Effect, whether or not arising from transactions
in the ordinary course of business; and (iv) neither of the Offerors nor any of
the Subsidiaries has sustained any loss or interference with its business from
fire, explosion, flood or other calamity, whether or not covered by insurance,
or from any labor dispute or court or governmental action, order or decree
which is material to the condition (financial or otherwise), earnings,
business, prospects or results of operations of the Offerors and the
Subsidiaries on a consolidated basis.
(r) Neither of the Offerors nor any person that controls,
is controlled by (including the Subsidiaries) or is under common control with
the Offerors has, directly or indirectly: (i) made any unlawful contribution
to any candidate for political office, or failed to disclose fully any
contribution in violation of law; or (ii) made any payment to any federal,
state or foreign governmental officer or official, or other person charged with
similar public or quasi-
10
Xxxxxx X. Xxxxx & Co. Incorporated
December 15, 1997
Page 10
public duties, other than payments required or permitted by the laws of the
United States or any jurisdiction thereof or applicable foreign jurisdictions.
(s) No relationship, direct or indirect, exists between
or among the Offerors or the Subsidiaries, on the one hand, and the directors,
officers, trustees, shareholders, customers or suppliers of the Offerors or the
Subsidiaries, on the other hand, which is required to be described in the
Registration Statement and the Prospectus (or, if the Prospectus is not in
existence, the most recent Preliminary Prospectus) which is not adequately
described therein.
(t) The Offerors or the Subsidiaries own or possess
adequate rights to use all patents, patent applications, trademarks, service
marks, trade names, trademark registrations, service xxxx registrations,
copyrights and licenses presently used in or necessary for the conduct of its
business or ownership of its properties, and neither of the Offerors nor any
Subsidiary has violated or infringed upon the rights of others, or received any
notice of conflict with the asserted rights of others, in respect thereof.
(u) The Offerors or the Subsidiaries have in place and
effective such policies of insurance, with limits of liability in such amounts,
as are normal and prudent in the ordinary course of the business of the
Offerors and its Subsidiaries.
(v) No labor dispute with the employees of the Offerors
or any Subsidiary exists or is imminent, and neither of the Offerors nor any
Subsidiary is a party to any collective bargaining agreement and, no union
organizational attempts have occurred or are pending. There has been no change
in the relationship of the Offerors or any Subsidiary with any of its principal
suppliers, contractors or customers resulting in or that could result in a
Material Adverse Effect.
(w) Neither the Company, the Trust, nor any Subsidiary is
an "investment company", an "affiliated person" of, or "promoter" or "principal
underwriter" for, an "investment company", as such terms are defined in the
Investment Company Act of 1940, as amended.
(x) All federal, state and local tax returns required to
be filed by or on behalf of each of the Offerors or any Subsidiary have been
filed (or are the subject of valid extension) with the appropriate federal,
state and local authorities, and all such tax returns, as filed, are accurate
in all material respects; all federal, state and local taxes (including
estimated tax payments) required to be shown on all such tax returns or claimed
to be due from or with respect to the business of the Offerors or such
Subsidiary have been paid or reflected as a liability on the financial
statements of the Offerors or such Subsidiary for appropriate periods; all
deficiencies asserted as a result of any federal, state or local tax audits
have been paid or finally settled, and no issue has been raised in any such
audit which, by application of the same or similar principles, reasonably could
be expected to result in a proposed deficiency for any other period not so
audited; no state of facts exist or has existed which would constitute grounds
for the assessment of any tax liability with respect to the periods which have
not been audited by appropriate federal, state or local authorities; there are
no outstanding agreements or waivers extending the
11
Xxxxxx X. Xxxxx & Co. Incorporated
December 15, 1997
Page 11
statutory period of limitation applicable to any federal, state or local tax
return of any period; and neither of the Offerors nor any Subsidiary has ever
been a member of an affiliated group of corporations filing consolidated
federal income tax returns, other than a group of which the Company is and has
been the common parent.
(y) Except for the Company's [NAME EACH GROUP HEALTH,
LIFE, DISABILITY OR OTHER WELFARE PLAN] and its contributory employee
retirement savings 401(k) plan and defined contribution employee stock
ownership plan (collectively, the "Plans"), neither of the Offerors nor any
Subsidiary is a participating employer or plan sponsor with respect to any
employee pension benefit plan as defined in Section 3(2) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), or any employee
welfare benefit plan as defined in Section 3(1) of ERISA, including, without
limitation, any multiemployer welfare or pension plan. The Company has no
defined benefit retirement plans. With respect to the Plans, the Company is in
substantial compliance with all applicable regulations, including ERISA and the
Code. The Company or the administrator of each of the Plans, as the case may
be, has timely filed the reports required to be filed by ERISA and the Code in
connection with the maintenance of the Plans, and no facts, including, without
limitation, any "reportable event" as defined by ERISA and the regulations
thereunder, exist in connection with the Plans which, under applicable law,
would constitute grounds for the termination of any of the Plans by the Pension
Benefit Guaranty Corporation or for the appointment by the appropriate United
States District Court of a trustee to administer any of the Plans.
(z) The Offerors and each Subsidiary maintain a system of
internal accounting controls sufficient to provide reasonable assurances that:
(i) transactions are executed in accordance with management's general or
specific authorizations; (ii) transactions are recorded as necessary to permit
preparation of consolidated financial statements in conformity with generally
accepted accounting principles and to maintain accountability for assets; (iii)
access to assets is permitted only in accordance with management's general or
specific authorizations; and (iv) the recorded accountability for assets is
compared with existing assets at reasonable intervals and appropriate action is
taken with respect to any differences.
(aa) Neither of the Offerors, any Subsidiary, any officer
or director or trustee of the Offerors or any Subsidiary, or any person who
owns, of record or beneficially, any class of securities issued by the Offerors
is: (i) an officer, director or partner of any brokerage firm, broker or
dealer that is a member of the NASD ("NASD Member"); or (ii) directly or
indirectly, a "person associated with" an NASD member or an "affiliate" of an
NASD member, as such terms are used in the NASD Rules of Fair Practice. In
addition, neither of the Offerors nor any Subsidiary has issued or transferred
any common stock, warrants, options or other securities, or any other items of
value, to any of the Underwriters or any "related person" of any Underwriter,
as such term is used in the NASD Rules of Fair Practice, except as provided in
this Agreement.
(bb) The Company has prepared and filed with the
Commission a Registration Statement for the Designated Preferred Securities
pursuant to Section 12(g) of the Exchange Act.
12
Xxxxxx X. Xxxxx & Co. Incorporated
December 15, 1997
Page 12
Such registration statement either has been declared effective by the
Commission under the Exchange Act or will be declared effective by the
Commission prior to or concurrently with the commencement of the public
offering of the Designated Preferred Securities. The Designated Preferred
Securities have been approved for designation upon notice of issuance as a
Nasdaq National Market security on The Nasdaq Stock Market ("Nasdaq")
concurrently with the effectiveness of the Registration Statement.
(cc) Neither of the Offerors, any Subsidiary nor any
affiliate of the Offerors or such Subsidiary does business with the government
of Cuba or with any person or affiliate located in Cuba within the meaning of
Section 517.075 of the Florida Statutes, and the Offerors agrees to comply with
such Section if, prior to the completion of the distribution of the Designated
Preferred Securities, either of the Offerors, any Subsidiary or any affiliate
of the Offerors or such Subsidiary commences doing such business.
(dd) All offers and sales of the securities of the Company
and each Subsidiary prior to the date hereof were made in compliance with the
Act and all other applicable state and federal laws or regulations.
(ee) The Company has obtained for the benefit of the
Underwriters the agreement, enforceable by the Underwriters, of each of the
officers and directors of the Company, that for a period of 180 days after the
date of the Prospectus, such persons will not, without the prior written
consent of the Underwriters, directly or indirectly, offer, sell, transfer, or
pledge, contract to sell, transfer or pledge, or cause or in any way permit to
be sold, transferred, pledged, or otherwise disposed of, any: (i) Designated
Preferred Securities; (ii) rights to purchase Designated Preferred Securities
(including, without limitation, Designated Preferred Securities that may be
deemed to be beneficially owned by any such shareholder in accordance with the
applicable regulations of the Commission and Designated Preferred Securities
that may be issued upon the exercise of any option, warrant or other
convertible security); or (iii) securities that are convertible or exchangeable
into shares of Designated Preferred Securities.
(ff) The Designated Preferred Securities have been duly
authorized by the Trust and, when issued and delivered against payment therefor
as provided herein, will be validly issued and fully paid and non-assessable
undivided beneficial ownership interests in the assets of the Trust, and the
issuance of Designated Preferred Securities will not be subject to preemptive
or other similar rights; the holders of the Designated Preferred Securities
will be entitled to the same limitation of personal liability under Delaware
law as extended to stockholders of private for profit corporations organized
under the General Corporation Law of the State of Delaware; and the Designated
Preferred Securities will conform in all material respects to the descriptions
thereof in the Prospectus. None of the Designated Preferred Securities,
immediately prior to delivery, will be subject to any security interest, lien,
mortgage, pledge, encumbrance, restriction upon voting or transfer, preemptive
rights, claim, equity or other defect.
13
Xxxxxx X. Xxxxx & Co. Incorporated
December 15, 1997
Page 13
(gg) This Agreement has been duly authorized, executed and
delivered by the Offerors.
(hh) The Trust Agreement has been qualified under the
Trust Indenture Act of 1939, as amended (the "1939 Act") and has been duly
authorized by the Company and, at the Closing Time, will have been duly
executed and delivered by the Company and the Trustees, and assuming due
authorization, execution and delivery of the Trust Agreement by the Trustees,
the Trust Agreement will, at the Closing Time, be a valid and binding
obligation of the Company, enforceable against the Company in accordance with
its terms.
(ii) The Guarantee has been qualified under the 1939 Act
and has been duly authorized by the Company. At the Closing Time, the
Guarantee will have been duly executed and delivered by the Company, and will
constitute a valid and binding obligation of the Company, enforceable against
the Company in accordance with its terms, and will conform in all material
respects to the descriptions thereof in the Prospectus.
(jj) The Indenture has been qualified under the 1939 Act
and has been duly authorized by the Company and, at the Closing Time, will have
been duly executed and delivered by the Company and will constitute a valid and
binding agreement of the Company, enforceable against the Company in accordance
with its terms.
(kk) The Debentures have been duly authorized by the
Company. At the Closing Time the Debentures will have been duly executed by
the Company and, when authenticated in the manner provided for in the Indenture
and delivered by the Company to the Trust against payment therefor as described
in the Prospectus, will constitute valid and binding obligations of the
Company, enforceable against the Company in accordance with their terms and
will conform in all material respects to the description thereof in the
Prospectus.
(ll) The Expense Agreement has been duly authorized by the
Company. At the Closing Time, the Expense Agreement will have been duly
executed and delivered by the Company and will constitute a valid and binding
agreement of the Company, enforceable against the Company in accordance with
its terms.
(mm) Each of the Administrative Trustees is an officer or
employee of the Company and has been duly authorized by the Company to execute
and deliver the Trust Agreement.
(nn) The Operative Documents conform in all material
respects to the descriptions thereof in the Prospectus.
SECTION 4. Information Furnished by the Underwriters. The
information set forth in the last paragraph on the outside front cover page of
the Prospectus concerning the terms of the offering by the Underwriters, the
paragraph on the inside front cover page of the Prospectus
14
Xxxxxx X. Xxxxx & Co. Incorporated
December 15, 1997
Page 14
relating to stabilization practices and passive market making, and the
concession and reallowance amounts appearing under the caption "Underwriting"
in the Prospectus constitute all of the information furnished to the Offerors
by and on behalf of the Underwriters for use in connection with the preparation
of the Registration Statement and the Prospectus, as such information is
referred to in this Agreement.
SECTION 5. Purchase, Sale and Delivery of Securities.
(a) On the basis of the representations, warranties and
agreements herein contained, and subject to the terms and conditions herein set
forth, the Offerors hereby agree that the Trust will issue to the Underwriters
the Firm Preferred Securities, and each of the Underwriters agrees, severally
and not jointly, to purchase from the Trust the number of Firm Preferred
Securities set forth opposite the name of such Underwriter on Schedule I
annexed hereto at a purchase price of $10.00 per share. Because the proceeds
from the sale of the Firm Preferred Securities will be used to purchase from
the Company its Debentures, the Company shall pay to the Underwriters a
commission of $.375 (37.5 cents) per Firm Preferred Security (the "Firm
Preferred Securities Commission").
(b) On the First Closing Date (as hereinafter defined),
the Offerors will deliver to the Underwriters, at the offices of Xxxxxx X.
Xxxxx & Co. Incorporated ("Baird"), 000 Xxxx Xxxxxxxxx Xxxxxx, Xxxxxxxxx,
Xxxxxxxxx 00000, for the accounts of the several Underwriters, certificates
representing the Firm Preferred Securities to be sold by them against payment
in Milwaukee, Wisconsin of the purchase price therefor by certified or official
bank check or checks in New York Clearing House (next day) funds payable to the
order of the Trust with respect to the Preferred Securities being sold by the
Trust. As referred to in this Agreement, the "First Closing Date" shall be on
the third full business day after the date of the Prospectus, at 9:00 a.m.,
Milwaukee, Wisconsin time, or at such other date or time not later than ten
full business days after the date of the Prospectus as the Underwriters and the
Trust may agree. The certificates for the Preferred Securities to be so
delivered will be in denominations and registered in the name of Cede & Co.,
the Nominee of the Depositary (as defined in the Prospectus) as the
Underwriters request by notice to the Trust prior to the First Closing Date,
and such certificates will be made available for checking and packaging at 9:00
a.m., Milwaukee, Wisconsin time on the first full business day preceding the
First Closing Date at a location to be designated by the Underwriters.
(c) In addition, on the basis of the representations,
warranties and agreements herein contained, and subject to the terms and
conditions herein set forth, the Offerors hereby agree to sell to the
Underwriters, and the Underwriters, severally and not jointly, shall have the
right at any time within thirty days after the date of the Prospectus to
purchase up to 330,000 Option Preferred Securities from the Trust at the
purchase price per share to be paid for the Firm Preferred Securities, for use
solely in covering any over-allotments made by the Underwriters in the sale and
distribution of the Firm Preferred Securities. The option granted hereunder
may be exercised upon notice by the Underwriters to the Trust within thirty
days after the date of the Prospectus setting forth the aggregate number of
Option Preferred Securities to be purchased by
15
Xxxxxx X. Xxxxx & Co. Incorporated
December 15, 1997
Page 15
the Underwriters and sold by the Trust, the names and denominations in which
the certificates for such shares are to be registered and the date and place at
which such certificates will be delivered. Such date of delivery (the "Second
Closing Date") shall be determined by the Underwriters, provided that the
Second Closing Date, which may be the same as the First Closing Date, shall not
be earlier than the First Closing Date and, if after the First Closing Date,
shall not be earlier than three nor later than ten full business days after
delivery of such notice to exercise. The number of Option Preferred Securities
to be sold by the Offerors pursuant to such notice shall equal that number of
full Option Preferred Securities which (as nearly as practicable in full shares
as determined by the Underwriters) bears the same proportion to the number of
Option Preferred Securities to be purchased by the Underwriters as the number
of Firm Preferred Securities to be sold by the Offerors under this Agreement
bears to the total number of Firm Preferred Securities. Certificates for the
Option Preferred Securities will be made available for checking and packaging
at 9:00 a.m., Milwaukee, Wisconsin time, on the first full business day
preceding the Second Closing Date at a location to be designated by the
Underwriters. The manner of payment for and delivery of (including the
denominations of and the names in which certificates are to be registered) the
Option Preferred Securities shall be the same as for the Firm Preferred
Securities. The Company shall pay to the Underwriters the commission $.375
(37.5 cents) for each Option Preferred Security purchased.
(d) Each Underwriter is authorized to accept delivery of
the Preferred Securities and to make payment therefor. As referred to in this
Agreement, "Closing Date" shall mean either the First Closing Date or the
Second Closing Date.
SECTION 6. Covenants of the Offerors. The Offerors, jointly and
severally, covenant and agree with the several Underwriters that:
(a) If the effective time of the Registration Statement
is not prior to the execution and delivery of this Agreement, the Offerors will
use its best efforts to cause the Registration Statement to become effective at
the earliest possible time and, upon notification from the Commission that the
Registration Statement has become effective, will so advise the Underwriter's
and counsel to the Underwriters promptly. If the effective time of the
Registration Statement is prior to the execution and delivery of this Agreement
and any information shall have been omitted therefrom in reliance upon Rule
430A, the Offerors, at the earliest possible time, will furnish the
Underwriters with a copy of the Prospectus to be filed by the Offerors with the
Commission to comply with Rule 424(b) and Rule 430A under the Act and, if the
Underwriters do not object to the contents thereof, will comply with such
Rules. Upon compliance with such Rules, the Offerors will so advise the
Underwriters promptly. The Offerors will advise the Underwriters and counsel
to the Underwriters promptly of the issuance by the Commission or any state
securities commission of any stop order suspending the effectiveness of the
Registration Statement or of the institution of any proceedings for that
purpose, or of any notification of the suspension of qualification of the
Designated Preferred Securities for sale in any jurisdiction or the initiation
or threatening of any proceedings for that purpose, and will also advise the
Underwriters and counsel to the Underwriters promptly of any request of the
Commission for
16
Xxxxxx X. Xxxxx & Co. Incorporated
December 15, 1997
Page 16
amendment or supplement of the Registration Statement, of any Preliminary
Prospectus or of the Prospectus, or for additional information, and the
Offerors will not file any amendment or supplement to the Registration
Statement (either before or after it becomes effective), to any Preliminary
Prospectus or to the Prospectus (including a prospectus filed pursuant to Rule
424(b)), or file any document under the Exchange Act before the termination of
the public offering of the Designated Preferred Securities by the Underwriters
if such document would be deemed to be incorporated by reference in the
Registration Statement, if the Underwriters have not been furnished with a copy
prior to such filing (with a reasonable opportunity to review such amendment or
supplement) or if the Underwriters object to such filing.
(b) If, at any time when a prospectus relating to the
Designated Preferred Securities is required by law to be delivered in
connection with sales by an Underwriter or dealer, any event occurs as a result
of which the Prospectus would include an untrue statement of a material fact,
or would omit 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 supplement the Prospectus to comply with the Act or to file under the
Exchange Act any document which would be deemed to be incorporated by reference
in the Registration Statement to comply with the Act or the Exchange Act, the
Offerors promptly will advise the Underwriters and counsel to the Underwriters
and will promptly prepare and file with the Commission, at its expense, an
amendment to the Registration Statement or file such document which will
correct such statement or omission or an amendment which will effect such
compliance; and, if any Underwriter is required to deliver a prospectus after
the effective date of the Registration Statement, the Offerors, upon request of
the Underwriters, will prepare promptly such prospectus or prospectuses as may
be necessary to permit compliance with the requirements of Section 10(a)(3) of
the Act. The Offerors consents to the use, in accordance with the provisions
of the Act and with the Blue Sky Laws of the jurisdictions in which the
Designated Preferred Securities are offered by the several Underwriters and by
dealers, of each Preliminary Prospectus.
(c) Neither of the Offerors nor any Subsidiary will,
prior to the Second Closing Date, if any, incur any liability or obligation,
direct or contingent, or enter into any material transaction, other than in the
ordinary course of business, or enter into any transaction with an "affiliate,"
as defined in Rule 405 under the Act, which is required to be described in the
Prospectus pursuant to Item 404 of Regulation S-K under the Act, except as
described in the Prospectus.
(d) Neither of the Offerors nor any Subsidiary will,
prior to the Second Closing Date, if any, acquire any of the Designated
Preferred Securities nor will the Offerors declare or pay any dividend or make
any other distribution upon its Designated Preferred Securities payable to
shareholders of record on a date prior to such earlier date, except as
described in the Prospectus.
17
Xxxxxx X. Xxxxx & Co. Incorporated
December 15, 1997
Page 17
(e) The Company will make generally available to its and
the Trustee's security holders and the Underwriters an earnings statement as
soon as practicable, but in no event later than sixty days after the end of its
fiscal quarter in which the first anniversary of the effective date of the
Registration Statement occurs, covering a period of twelve consecutive calendar
months beginning after the effective date of the Registration Statement, which
will satisfy the provisions of the last paragraph of Section 11(a) of the Act
and Rule 158 promulgated thereunder.
(f) During such period as a prospectus is required by law
to be delivered in connection with sales by an Underwriter or dealer, the
Offerors will furnish to the Underwriters, at the expense of the Offerors,
copies of the Registration Statement, the Prospectus, any Preliminary
Prospectus and all amendments and supplements to any such documents, including
any document filed under the Exchange Act and deemed to be incorporated by
reference in the Registration Statement, in each case as soon as available and
in such quantities as the Underwriters may reasonably request.
(g) The Offerors will apply the net proceeds from the
sale of the Designated Preferred Securities to be sold by the Trust hereunder
for the purposes set forth in the Prospectus, and will timely file Form SR, and
any amendments thereto, as required by Rule 463 under the Act.
(h) The Offerors will cooperate with the Underwriters and
counsel to the Underwriters in qualifying or registering the Designated
Preferred Securities for sale under the Blue Sky Laws of such jurisdictions as
the Underwriters designate, and will continue such qualifications or
registrations in effect so long as reasonably requested by the Underwriters to
effect the distribution of the Designated Preferred Securities. The Offerors
shall not be required to qualify as foreign corporations or to file a general
consent to service of process in any such jurisdiction where it is not
presently qualified. In each jurisdiction where any of the Designated
Preferred Securities shall have been qualified as provided above, the Offerors
will file such reports and statements as may be required to continue such
qualification for a period of not less than one year from the date of the
Prospectus. The Offerors shall promptly prepare and file with the Commission,
from time to time, such reports as may be required to be filed by the Act and
the Exchange Act, and the Offerors shall comply in all respects with the
undertakings given by the Offerors in connection with the qualification or
registration of the Designated Preferred Securities for offering and sale under
the Blue Sky Laws.
(i) During the period of three years from the date of the
Prospectus, the Offerors will furnish to each of the Underwriters, as soon as
available, each report, statement or other document of the Company or its Board
of Directors mailed to its shareholders or filed with the Commission, and such
other information concerning the Offerors as the Underwriters may reasonably
request.
(j) The Offerors shall deliver the requisite notice of
issuance to Nasdaq and shall take all necessary or appropriate action within
its power to maintain the authorization for
18
Xxxxxx X. Xxxxx & Co. Incorporated
December 15, 1997
Page 18
trading of the Designated Preferred Securities as a Nasdaq National Market
security, or take such action to authorize the Designated Preferred Securities
for listing on the New York Stock Exchange or the American Stock Exchange, for
a period of at least thirty-six months after the date of the Prospectus.
(k) During a period of 180 days from the date of the
Prospectus, neither the Company nor the Trust will, without the prior written
consent of Baird, (i) directly or indirectly, offer, pledge, sell, contract to
sell, sell any option or contract to purchase, purchase any option or contract
to sell, grant any option, right or warrant to purchase or otherwise transfer
or dispose of any Designated Preferred Securities or Debentures (or any equity
or debt securities substantially similar to the Designated Preferred Securities
or Debentures, respectively) or any capital stock of the Company, or any
securities convertible into or exercisable or exchangeable for Designated
Preferred Securities or Debentures (or any equity or debt securities
substantially similar to the Designated Preferred Securities or Debentures,
respectively) or file any registration statement under the 1933 Act with
respect to any of the foregoing or (ii) enter into any swap or any other
agreement or any transaction that transfers, in whole or in part, directly or
indirectly, the economic consequence of ownership of Designated Preferred
Securities or Debentures (or any equity or debt securities substantially
similar to the Designated Preferred Securities or Debentures, respectively) or
any capital stock of the Company, whether any such swap or transaction
described in clause (i) or (ii) above is to be settled by delivery of
Designated Preferred Securities or Debentures (or any equity or debt securities
substantially similar to the Designated Preferred Securities or Debentures,
respectively) or such other securities, in cash or otherwise. The foregoing
sentence shall not apply to the Designated Preferred Securities or Debentures
to be sold pursuant to this Agreement.
(l) The Offerors will maintain a transfer agent and, if
required by law or the rules of The Nasdaq Stock Market or any national
securities exchange on which the Designated Preferred Securities are listed, a
registrar (which, if permitted by applicable laws and rules, may be the same
entity as the transfer agent) for its Designated Preferred Securities. Each
Offeror shall, as soon as practicable after the date hereof, use its best
efforts to obtain listing, if not already so listed, in Standard and Poor's
Stock Guide, or such other recognized securities manuals for which it may
qualify for listing, and each Offeror shall use its best efforts to maintain
such listings for at least five years after the First Closing Date.
(m) If at any time when a prospectus relating to the
Designated Preferred Securities is required to be delivered under the Act, any
rumor, publication or event relating to of affecting either Offeror shall occur
as a result of which, in the opinion of the Underwriters, the market price of
the Designated Preferred Securities have been or is likely to be materially
affected (regardless of whether such rumor, publication or event necessitates a
supplement to the Prospectus), the Offerors will, after written notice from
Xxxxx advising the Offerors of any of the matters set forth above, promptly
consult with Baird concerning the advisability and substance of, and, if the
Offerors and Baird determine that it is appropriate, disseminate, a press
release or other public statement responding to or commenting on, such rumor,
publication or event.
19
Xxxxxx X. Xxxxx & Co. Incorporated
December 15, 1997
Page 19
(n) If the sale to the Underwriters of the Designated
Preferred Securities is not consummated for any reason other than termination
of this Agreement pursuant to section 12 hereof, without limiting any other
rights the Underwriters may have, the Offerors agrees to reimburse the
Underwriters upon demand for all out-of-pocket expenses (including reasonable
fees and expenses of counsel for the Underwriters), that shall have been
incurred by the Underwriters in connection with the proposed purchase and sale
of the Designated Preferred Securities, and the provisions of sections 8 and 11
hereof shall at all times be effective and apply.
(o) The Offerors will comply or cause to be complied with
the conditions to the obligations of the Underwriters in section 9 hereof.
(p) The Offerors will cooperate with the Underwriters and
use reasonable commercial efforts to permit the Designated Preferred Securities
to be eligible for clearance and settlement through the facilities of The
Depository Trust Company ("DTC").
SECTION 8. Payment of Expenses. Whether or not the transactions
contemplated hereunder are consummated or this Agreement becomes effective, or
if this Agreement is terminated for any reason, the Company will pay the costs,
fees, and expenses incurred in connection with the public offering of the
Designated Preferred Securities. Such costs, fees and expenses to be paid by
the Company include, without limitation:
(a) All costs, fees and expenses (excluding the expenses
incurred by the Underwriters and the legal fees and disbursements of counsel
for the Underwriters, but including such fees and disbursements described in
subsections (b) and (c) of this section 8) incurred in connection with the
performance of the Offerors's obligations hereunder, including without limiting
the generality of the foregoing: the registration fees related to the filing of
the Registration Statement with the Commission; the fees and expenses related
to the quotation or listing of the Designated Preferred Securities and, if
applicable, the Guarantee and Debentures on Nasdaq or other national securities
exchange; the fees and expenses of the Offerors's counsel, accountants,
transfer agent and registrar; the fees and expenses of the Trustees; the costs
and expenses incurred in connection with the preparation, printing, shipping
and delivery of the Registration Statement, each Preliminary Prospectus and the
Prospectus (including all exhibits and financial statements) and all agreements
and supplements provided for herein, this Agreement and the Preliminary and
Supplemental Blue Sky Memoranda, including, without limitation, shipping
expenses via overnight delivery and/or courier service to comply with
applicable prospectus delivery requirements; and the costs and expenses
associated with the production of materials related to, and travel expenses
incurred by the management of the Offerors in connection with, the various
meetings to be held between the Offerors's management and prospective
investors.
(b) All registration fees and expenses, including legal
fees and disbursements of counsel for the Underwriters incurred in connection
with qualifying or registering all or any part of the Designated Preferred
Securities, Debentures, and the Guarantee for offer and sale
20
Xxxxxx X. Xxxxx & Co. Incorporated
December 15, 1997
Page 20
under the Blue Sky Laws and the clearing of the public offering and the
underwriting arrangements evidenced hereby with the NASD.
(c) Up to $25,000 of the Underwriters' disbursements and
out-of-pocket expenses incurred in connection with their preparations for the
offering and the offering of the Designated Preferred Securities, including,
without limitation, the fees and expenses of Underwriters' legal counsel not
included under subsection (b) above, travel expenses for meetings with the
Offerors and meetings with the Offerors' management and prospective investors.
(d) All fees and expenses related to printing of the
certificates for the Designated Preferred Securities, and all transfer taxes,
if any, with respect to the sale and delivery of the Designated Preferred
Securities.
(e) The costs and charges of any transfer agent or
registrar and the fees and disbursement of counsel for any transfer agent or
registrar.
(f) All expenses incident to the preparation, execution
and delivery of the Trust Agreements, the Indenture and the Guarantee.
(g) The cost and charges of qualifying the Designated
Preferred Securities with the DTC.
(h) All other costs and expenses incident to the
performance of the obligations of the Offerors under this Agreement, the Trust
Agreement, the Indenture or the Guarantee that are not otherwise specifically
provided for in this section 8.
SECTION 9.
Conditions to the Obligations of the Underwriters. The
obligations of the several Underwriters under this Agreement shall be subject
to, in the Underwriter's sole discretion, the accuracy of the representations
and warranties on the part of the Offerors herein set forth as of the date
hereof and as of each Closing Date, to the accuracy of the statements of the
Offerors's officers made pursuant to the provisions hereof, to the performance
by each of the Offerors of its obligations hereunder, and to the following
additional conditions, unless waived in writing by the Underwriters:
(a) The Registration Statement shall have been declared
effective by the Commission not later than 9:00 a.m., Washington, D. C. time,
of the day following the date of this Agreement, or such later time as shall
have been consented to by the Underwriters, which consent shall be deemed to
have been given if the Registration Statement shall have been declared
effective on or before the date and time requested in the acceleration request
submitted on behalf of the Underwriters pursuant to Rule 461 under the Act; all
filings required by Rules 424(b) and 430A under the Act shall have been timely
made; no stop order suspending the effectiveness of the Registration Statement
shall have been issued by the Commission or any state securities commission
nor, to the knowledge of the Offerors, shall any
21
Xxxxxx X. Xxxxx & Co. Incorporated
December 15, 1997
Page 21
proceedings for that purpose have been initiated or threatened; and any request
of the Commission or any state securities commission for inclusion of
additional information in the Registration Statement, or otherwise, shall have
been complied with to the satisfaction of the Underwriters.
(b) Since the dates as of which information is given in
the Registration Statement:
(i) there shall not have occurred any change or
development involving, or which could be expected to involve, a Material
Adverse Effect, whether or not arising from transactions in the ordinary course
of business; and
(ii) neither of the Offerors shall have sustained
any loss or interference from any labor dispute, strike, fire, flood,
windstorm, accident or other calamity (whether or not insured) or from any
court or governmental action, order or decree,
the effect of which on the Offerors, in any such case described in clause (i)
or (ii) above, is in the opinion of the Underwriters so material and adverse as
to make it impracticable or inadvisable to proceed with the public offering or
the delivery of the Designated Preferred Securities on the terms and in the
manner contemplated in the Registration Statement and the Prospectus.
(c) The Underwriters shall not have advised the Offerors
that the Registration Statement or the Prospectus contains an untrue statement
of fact that, in the opinion of the Underwriters or counsel for the
Underwriters, is material, or omits to state a fact that, in the opinion of the
Underwriters or such counsel, is material and is required to be stated therein
or necessary to make the statements therein not misleading.
(d) The Underwriters shall have received an opinion of
Xxxxxx & Xxxxx, P.C., counsel for the Offerors addressed to the Underwriters,
and dated the First Closing Date or the Second Closing Date, as the case may
be, to the effect that:
(i) The Company has been duly incorporated and is
validly existing as a corporation and in good standing under the laws of
Michigan, and is duly registered as a bank holding company under the Bank
Holding Company Act with full corporate power and authority to own, lease and
operate its properties and conduct its business as presently conducted and as
described in the Prospectus and the Registration Statement; each of the
Offerors is duly registered and qualified to do business as a foreign
corporation under the laws of, and is in good standing as such in, each
jurisdiction in which such registration or qualification is required, except
where the failure to so register or qualify would not have a Material Adverse
Effect;
(ii) The authorized capital stock of the Company
conforms to the description thereof in the Prospectus and the Registration
Statement;
22
Xxxxxx X. Xxxxx & Co. Incorporated
December 15, 1997
Page 22
(iii) The issued and outstanding shares of capital
stock of the Company immediately prior to the issuance and sale of the
Designated Preferred Securities have been duly authorized and validly issued,
are fully paid and nonassessable, and there are no preemptive, preferential or,
except as described in the Prospectus, other rights to subscribe for or
purchase any shares of capital stock of the Company, and to such counsel's
knowledge, no shares of capital stock of the Company have been issued in
violation of such rights and there are no immediate plans or arrangements to
issue any shares of capital stock of the Company except as described in the
Prospectus;
(iv) Except for the Subsidiaries and the Trust,
the Company has no subsidiaries, and the Company does not own any equity
interest in or control, directly or indirectly, any other corporation, limited
liability company, partnership, joint venture, association, trust or other
business organization except as described in the Prospectus and the
Registration Statement; each Subsidiary has been duly incorporated and is
validly existing as a corporate entity in good standing under the laws of its
jurisdiction of incorporation, with full corporate power and authority to own,
lease and operate its properties and to conduct its business as presently
conducted and as described in the Prospectus and the Registration Statement;
the Company's Subsidiary, Sun Community Bancorp Limited, a second tier bank
holding company incorporated under the laws of Arizona, is duly registered as a
bank holding company under the Bank Holding Company Act; each Subsidiary is
duly registered or qualified to do business as a foreign corporation under the
laws of, and is in good standing as such in, each jurisdiction in which such
registration or qualification is required, except where the failure to so
register or qualify would not have a Material Adverse Effect; the issued and
outstanding shares of the capital stock of each Subsidiary have been duly
authorized and validly issued, are fully paid and nonassessable (except with
respect to Subsidiaries to the extent provided under 12 U.S.C. Section 55, 12
U.S.C. Section 1831o or Section 201 of the Michigan Banking Code) and there are
no preemptive, preferential or, to such counsel's knowledge, other rights to
subscribe for or purchase any shares of capital stock of any Subsidiary, and to
such counsel's knowledge, no shares of capital stock of any Subsidiary have
been issued in violation of such rights; except as stated in the Prospectus,
the Company owns directly and, to such counsel's knowledge, beneficially all of
the issued and outstanding capital stock of each Subsidiary, free and clear of
any and all liens, claims, encumbrances and security interests;
(v) The certificates for the Designated Preferred
Securities to be delivered hereunder are in due and proper form and conform to
the requirements of applicable law; and when duly countersigned by the Trust's
transfer agent, and delivered to the Underwriters or upon the order of the
Underwriters against payment of the agreed consideration therefor in accordance
with the provisions of this Agreement, the Designated Preferred Securities to
be sold by the Trust represented thereby will be duly authorized and validly
issued, fully paid and nonassessable, and free of any preemptive, preferential
or other rights to subscribe for or purchase shares of Designated Preferred
Securities;
23
Xxxxxx X. Xxxxx & Co. Incorporated
December 15, 1997
Page 23
(vi) The Registration Statement has become
effective under the Act, and to such counsel's knowledge, no stop order
suspending the effectiveness of the Registration Statement has been issued and
no proceedings for that purpose have been initiated or are threatened under the
Act or any Blue Sky Laws; the Registration Statement and the Prospectus and any
amendment or supplement thereto, including any document incorporated by
reference in the Registration Statement, (except for the financial statements
and other statistical or financial data included therein as to which such
counsel need express no opinion) comply as to form in all material respects
with the requirements of the Act; the conditions for use of Form S-3, set forth
in the General Instructions thereto have been satisfied; no facts have come to
the attention of such counsel which lead it to believe that either the
Registration Statement or the Prospectus or any amendment or supplement
thereto, including any document incorporated by reference in the Registration
Statement, contains any untrue statement of a material fact or omitted or will
omit to state a material fact required to be stated therein or necessary to
make the statements therein not misleading or that the Prospectus, as of the
First Closing Date or the Second Closing Date, as the case may be, contained
any untrue statement of a material fact or omitted or will omit to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading in light of the circumstances under which they were made
(except for the financial statements and other financial data included therein
as to which such counsel need express no opinion); to such counsel's knowledge,
there are no legal or governmental proceedings pending or threatened,
including, without limitation, any such proceedings that are related to
environmental or employment discrimination matters, required to be described in
the Registration Statement or the Prospectus which are not so described or
which question the validity of this Agreement, the Trust Agreement, the
Guarantee or the Indenture or any action taken or to be taken pursuant to any
such agreement, nor is there any transaction, relationship, agreement, contract
or other document of a character required to be described in the Registration
Statement or the Prospectus, or required to be filed under the Exchange Act if
upon such filing they would be incorporated, in whole or in part, by reference
therein, or to be filed as an exhibit to or incorporated by reference in the
Registration Statement by the Act, which is not described or filed or
incorporated by reference as required;
(vii) The Company has full corporate power and
authority and the Trust has full trust power and authority to enter into and
perform this Agreement; the performance of the Offerors's obligations hereunder
and the consummation of the transactions described herein have been duly
authorized by each of the Offerors by all necessary corporate or trust action
and this Agreement has been duly executed and delivered by and on behalf of
each of the Offerors, and is a legal, valid and binding agreement of each of
the Offerors enforceable against each of the Offerors in accordance with its
terms, except that rights to indemnity or contribution may be limited by
applicable law and except as enforceability of this Agreement may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
creditors' rights generally, and by equitable principles limiting the right to
specific performance or other equitable relief; no consent, approval,
authorization or other order or decree of any court, regulatory or
governmental body, arbitrator, administrative agency or other instrumentality
of the United States or other country or jurisdiction having jurisdiction over
either Offeror is required for the
24
Xxxxxx X. Xxxxx & Co. Incorporated
December 15, 1997
Page 24
execution and delivery of this Agreement or the consummation of the
transactions contemplated by this Agreement (except for compliance with the
Act, the Exchange Act, applicable Blue Sky Laws and the clearance of the
underwriting arrangements by the NASD);
(viii) The execution, delivery and performance of
each of the Operative Documents by the Trust and the Company, as applicable,
the issuance, sale, and delivery of the Defined Preferred Securities, the
Debentures, and the Guarantee and the consummation by the Company and the
Trust, as applicable, of the transactions contemplated by the Operative
Documents will not: (A) violate any provisions of the Articles of
Incorporation, Bylaws, or governing documents (including without limitation the
Trust Agreement) of the Offerors or any Subsidiary; (B) violate any provisions
of, or result in the breach, modification or termination of, or constitute a
default under, any agreement, lease, franchise, license, indenture, permit,
mortgage, deed of trust, other evidence of indebtedness or other instrument to
which either Offeror or any Subsidiary is a party or by which either Offeror or
any such Subsidiary, or any of their respective owned or leased property is
bound, and which is filed or incorporated by reference as an exhibit to the
Registration Statement; or (C) violate any statute, ordinance, order, rule,
decree or regulation of any court, regulatory or governmental body, arbitrator,
administrative agency or other instrumentality of the United States or other
country or jurisdiction having jurisdiction over either Offeror or any
Subsidiary (assuming compliance with all applicable federal and state
securities laws);
(ix) To such counsel's knowledge, except as
described in the Prospectus, there are no holders of securities of either of
the Offerors, or securities that are convertible or exchangeable into
Designated Preferred Securities or other securities of either of the Offerors,
that have rights to the registration of such securities under the Act or any
Blue Sky Laws;
(x) The Designated Preferred Securities have been
designated for inclusion as a National Market security on The Nasdaq Stock
Market and are registered under the Exchange Act;
(xi) Neither of the Offerors nor any Subsidiary
is, nor with the giving of notice or passage of time or both would be, in
violation of its respective Articles of Incorporation, By-laws, or other
governing documents (including without limitation the Trust Agreement) or, to
such counsel's knowledge, in default in any material respect in the performance
of any agreement, lease, franchise, license, permit, mortgage, deed of trust,
evidence of indebtedness or other instrument, or any other document that is
filed as an exhibit to or incorporated by reference in the Registration
Statement, to which either of the Offerors or any Subsidiary is subject or
bound;
(xii) Neither of the Offerors nor any Subsidiary is
an "investment company", an "affiliated person" of, or "promoter" or "principal
underwriter" for, an "investment company", as such terms are defined in the
Investment Company Act of 1940, as amended, and,
25
Xxxxxx X. Xxxxx & Co. Incorporated
December 15, 1997
Page 25
upon its receipt of any proceeds from the sale of the Designated Preferred
Securities, no Offeror will become or be deemed to be an "investment company"
thereunder;
(xiii) The description or incorporation by reference
in the Registration Statement and the Prospectus of statutes, law, regulations,
legal and governmental proceedings, and contracts and other legal documents
described or incorporated by reference therein fairly and correctly present, in
all material respects, the information required to be included therein by the
Act; and
(xiv) All offers and sales by the Company of its
capital stock and any offer and sale by the Trust of any securities before the
date hereof were at all relevant times duly registered under or exempt from the
registration requirements of the Act, and were duly registered under or the
subject of an available exemption from the registration requirements of any
applicable Blue Sky Laws.
(xv) The Debentures and Guarantee of the Company
and the equity securities of the Trust conform to the description thereof
contained in the Prospectus in all material respects.
(xvi) The issuance, sale and delivery of the
Designated Preferred Securities and Debentures in accordance with the terms and
conditions of this Agreement, the Trust Agreement and the Indenture have been
duly authorized by all necessary actions of each of the Offerors.
(xvii) Each of the Indenture, the Trust Agreement
and the Guarantee has been duly qualified under the Trust Indenture Act, has
been duly authorized, executed and delivered by the Company, and is a valid and
legally binding obligation of the Company enforceable in accordance with its
terms, subject to the effect of bankruptcy, insolvency, reorganization,
receivership, moratorium and other laws affecting the rights and remedies of
creditors generally and of general principles of equity;
(xviii) The Debentures have been duly authorized,
executed, authenticated and delivered by the Company, are entitled to the
benefits of the Indenture and are legal, valid and binding obligations of the
Company enforceable against the Company in accordance with their terms, subject
to the effect of bankruptcy, insolvency, reorganization, receivership,
moratorium and other laws affecting the rights and remedies of creditors
generally and of general principles of equity;
(xix) The Expense Agreement has been duly
authorized, executed and delivered by the Company, and is a valid and legally
binding obligation of the Company enforceable in accordance with its terms,
subject to the effect of bankruptcy, insolvency, reorganization, receivership,
moratorium and other laws affecting the rights and remedies of creditors
generally and of general principles of equity;
26
Xxxxxx X. Xxxxx & Co. Incorporated
December 15, 1997
Page 26
(xx) The statements under the captions
"Description of the Preferred Securities", "Description of the Subordinated
Debentures", "Description of the Guarantee", "Relationship Among the Preferred
Securities, the Subordinated Debentures and the Guarantee", "Certain Federal
Income Tax Consequences" and "ERISA Considerations" in the Prospectus, insofar
as such statements constitute a summary of legal and regulatory matters,
documents or proceedings referred to therein are accurate in all material
respects and fairly present the information called for with respect to such
legal matters, documents and proceedings, other than financial and statistical
data as to which said counsel expresses no opinion or belief;
(xxi) The Trust will be classified for United
States federal income tax purposes as a grantor trust and not as an association
taxable as a corporation.
In rendering such opinion, counsel for the Offerors may rely, to the extent
counsel deems such reliance proper, as to matters of fact upon certificates of
officers of the Company and of governmental officials, and copies of all such
certificates shall be furnished to the Underwriters and for the Underwriters on
or before each Closing Date.
(e) Xxxxxxxx, Xxxxxx & Finger, special Delaware counsel
to the Offerors, shall have furnished to the Underwriters their signed opinion,
dated as of any Closing Date, in form and substance satisfactory to such
counsel, to the effect that:
(i) The Trust has been duly created and is
validly existing in good standing as a business trust under the Delaware
Business Trust Act and, under the Trust Agreement and the Delaware Business
Trust Act, has the trust power and authority to conduct its business as
described in the Prospectus.
(ii) The Trust Agreement is a legal, valid and
binding agreement of the Company and the Trustees, and is enforceable against
the Company and the Trustees, in accordance with its terms.
(iii) Under the Trust Agreement and the Delaware
Business Trust Act, the execution and delivery of the Underwriting Agreement by
the Trust, and the performance by the Trust of its obligations thereunder, have
been authorized by all requisite trust action on the part of the Trust.
(iv) The Designated Preferred Securities have been
duly authorized by the Trust Agreement, and when issued and sold in accordance
with the Trust Agreement, the Designated Preferred Securities will be, subject
to the qualifications set forth in paragraph (v) below, fully paid and
nonassessable beneficial interests in the assets of the Trust and entitled to
the benefits of the Trust Agreement.
(v) Holders of Designated Preferred Securities,
as beneficial owners of the Trust, will be entitled to the same limitation of
personal liability extended to shareholders of
27
Xxxxxx X. Xxxxx & Co. Incorporated
December 15, 1997
Page 27
private, for-profit corporations organized under the General Corporation Law of
the State of Delaware. Such opinion may note that the holders of Designated
Preferred Securities may be obligated to make payments as set forth in the
Trust Agreement.
(vi) Under the Delaware Business Trust Act and the
Trust Agreement, the issuance of the Designated Preferred Securities is not
subject to preemptive rights.
(vii) The issuance and sale by the Trust of the
Designated Preferred Securities and the Common Securities, the execution,
delivery and performance by the Trust of this Agreement, and the consummation
of the transactions contemplated by this Agreement, do not violate (a) the
Trust Agreement, or (b) any applicable Delaware law, rule or, regulation.
(f) The Underwriters shall have received an opinion of
Varnum, Riddering, Xxxxxxx & Xxxxxxx LLP, counsel for the Underwriters, dated
the First Closing Date or the Second Closing Date, as the case may be, with
respect to the issuance and sale of the Designated Preferred Securities by the
Offerors, the Registration Statement and other related matters as the
Underwriters may require, and the Offerors shall have furnished to such counsel
such documents and shall have exhibited to them such papers and records as they
request for the purpose of enabling them to pass upon such matters.
(g) The Underwriters shall have received on each Closing
Date, a certificate of Xxxxxx X. Xxxx, Chairman, President and Chief Executive
Officer, and Xxx X. Xxxxxxxxxxx, Vice President and Chief Financial Officer, of
the Company, and a certificate of Xxxxxx X. Xxxx and Xxxxxx X. Xxxx as
Administrative Trustees of the Trust to the effect that:
(i) The representations and warranties of the
Offerors set forth in section 2 hereof are true and correct as of the date of
this Agreement and as of the date of such certificate, and each of the Offerors
has complied with all the agreements and satisfied all the conditions to be
performed or satisfied by it at or prior to the date of such certificate;
(ii) The Commission has not issued an order
preventing or suspending the use of the Prospectus or any Preliminary
Prospectus or any amendment or supplement thereto; no stop order suspending the
effectiveness of the Registration Statement has been issued; and to the
knowledge of the respective signatories, no proceedings for that purpose have
been initiated or are pending or contemplated under the Act or under the Blue
Sky Laws of any jurisdiction;
(iii) Each of the respective signatories has
carefully examined the Registration Statement and the Prospectus, and any
amendment or supplement thereto, including any documents filed under the
Exchange Act and deemed to be incorporated by reference in the Registration
Statement, and such documents contain all statements required to be stated
therein, and do not include any 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 not misleading, and since the date on which the Registration
Statement was initially filed, no event has occurred that was
28
Xxxxxx X. Xxxxx & Co. Incorporated
December 15, 1997
Page 28
required to be set forth in an amended or supplemented prospectus or in an
amendment to the Registration Statement that has not been so set forth, and
there has been no document required to be filed under the Exchange Act that
upon such filing would be deemed to be incorporated by reference in the
Registration Statement that has not been so filed; and
(iv) Since the date on which the Registration
Statement was initially filed with the Commission, there shall not have
occurred any change or development involving, or which could be expected to
involve, a Material Adverse Effect, whether or not arising from transactions in
the ordinary course of business, except as disclosed in the Prospectus and the
Registration Statement as heretofore amended or (but only if the Underwriters
expressly consent thereto in writing) as disclosed in an amendment or
supplement thereto filed with the Commission and delivered to the Underwriters
after the execution of this Agreement; since such date and except as so
disclosed or in the ordinary course of business, neither of the Offerors has
incurred any liability or obligation, direct or indirect, or entered into any
transaction which is material to the Offerors; since such date and except as so
disclosed, there has not been any change in the outstanding capital securities
of either of the Offerors, or any change that is material to the Offerors in
the short-term debt or long-term debt of the Offerors; since such date and
except as so disclosed, no Offeror has acquired any of the capital securities
of either of the Offerors nor has either of the Offerors declared or paid any
dividend, or made any other distribution, upon its outstanding capital
securities payable to holders of record on a date prior to such Closing Date;
since such date and except as so disclosed, neither Offeror has incurred any
material contingent obligations, and no material litigation is pending or
threatened against either of the Offerors; and, since such date and except as
so disclosed, neither Offeror has sustained any material loss or interference
from any strike, fire, flood, windstorm, accident or other calamity (whether or
not insured) or from any court or governmental action, order or decree.
The delivery of the certificate provided for in this subsection (g)
shall be and constitute a representation and warranty of the Offerors as to the
facts required in the immediately foregoing clauses (i), (ii), (iii) and (iv)
to be set forth in said certificate.
(h) At the time this Agreement is executed and also on
each Closing Date, there shall be delivered to the Underwriters a letter
addressed to the Underwriters from BDO Xxxxxxx LLP, the Company's independent
accountants, the first letter to be dated the date of this Agreement, the
second letter to be dated the First Closing Date and the third letter (if
applicable) to be dated the Second Closing Date, which shall be in form and
substance satisfactory to the Underwriters and shall contain information as of
a date within five days of the date of such letter. There shall not have been
any change or decrease set forth in any of the letters referred to in this
subsection (h) which makes it impracticable or inadvisable in the judgment of
the Underwriters to proceed with the public offering or purchase of the
Designated Preferred Securities as contemplated hereby.
(i) The Designated Preferred Securities shall have been
qualified or registered for sale under the Blue Sky Laws of such jurisdictions
as shall have been specified by the
29
Xxxxxx X. Xxxxx & Co. Incorporated
December 15, 1997
Page 29
Underwriters, the underwriting terms and arrangements for the offering shall
have been cleared by the NASD, and the Designated Preferred Securities shall
have been designated for inclusion as a Nasdaq National Market security on the
Nasdaq Stock Market and shall have been registered under the Exchange Act.
(j) Such further certificates and documents as the
Underwriters may reasonably request (including certificates of officers of the
Company or of Trustees of the Trust).
(k) On or before the First Closing Date, the Underwriters
shall have received duly executed counterparts of the Trust Agreement, the
Guarantee, the Indenture and the Expense Agreement.
All such opinions, certificates, letters and documents shall be in
compliance with the provisions hereof only if they are satisfactory to the
Underwriters and to Varnum, Riddering, Xxxxxxx & Xxxxxxx LLP, counsel for the
Underwriters. The Offerors shall furnish the Underwriters with such manually
signed or conformed copies of such opinions, certificates, letters and
documents as the Underwriters may reasonably request.
If any condition to the Underwriters' obligations hereunder to be
satisfied prior to or at either Closing Date is not so satisfied, this
Agreement at the election of the Underwriters will terminate upon notification
to the Offerors without liability on the part of any Underwriter, the Offerors
except for the provisions of section 7(n) hereof, the expenses to be paid by
the Offerors pursuant to section 8 hereof and except to the extent provided in
section 11 hereof.
SECTION 10. Maintain Effectiveness of Registration Statement. The
Offerors will use their best efforts to prevent the issuance of any stop order
suspending the effectiveness of the Registration Statement, and, if such stop
order is issued, to obtain as soon as possible the lifting thereof.
SECTION 11. Indemnification.
(a) The Offerors agree to jointly and severally indemnify
and hold harmless each Underwriter and each of its directors, officers and
agents and each person, if any, who controls any Underwriter within the meaning
of the Act or the Exchange Act, from and against any losses, claims, damages,
expenses, liabilities or actions in respect thereof ("Claims"), joint or
several, to which such Underwriter or each such controlling person may become
subject under the Act, the Exchange Act, Blue Sky Laws or other federal or
state statutory laws or regulations, at common law or otherwise (including
payments made in settlement of any litigation), insofar as such Claims arise
out of or are based upon any breach of any representation, warranty or covenant
made by either of the Offerors in this Agreement, or any untrue statement or
alleged untrue statement of any material fact contained in the Registration
Statement, any Preliminary Prospectus, the Prospectus or any amendment or
supplement thereto, or in any application filed under any Blue Sky Law or other
document executed by either of the Offerors for that purpose
30
Xxxxxx X. Xxxxx & Co. Incorporated
December 15, 1997
Page 30
or based upon written information furnished by either of the Offerors and filed
in any state or other jurisdiction to qualify any or all of the Designated
Preferred Securities under the securities laws thereof (any such document,
application or information being hereinafter called a "Blue Sky Application")
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. The Offerors jointly and severally agree to
reimburse each Underwriter and each such controlling person for any legal fees
or other expenses incurred by such Underwriter or any such controlling person
in connection with investigating or defending any such Claim; provided,
however, that the Offerors will not be liable in any such case to the extent
that any such Claim arises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission made in the
Registration Statement, any Preliminary Prospectus, the Prospectus or
supplement thereto or in any Blue Sky Application in reliance upon and in
conformity with the written information furnished to the Offerors pursuant to
section 4 of this Agreement. The indemnification obligations of the Offerors,
as provided above, are in addition to and in no way limit any liabilities the
Offerors may otherwise have.
(b) Each Underwriter, severally and not jointly, will
indemnify and hold harmless the Offerors, each of its directors and each of its
officers who signs the Registration Statement, and each person, if any, who
controls the Offerors within the meaning of the Act or the Exchange Act against
any Claim to which the Offerors, or any such director, officer, or controlling
person may become subject under the Act, the Exchange Act, Blue Sky Laws or
other federal or state statutory laws or regulations, at common law or
otherwise (including payments made in settlement of any litigation, if such
settlement is effected with the written consent of such Underwriter and Baird),
insofar as such Claim arises out of or is based upon any untrue or alleged
untrue statement of any material fact contained in the Registration Statement,
any Preliminary Prospectus, the Prospectus, or any amendment or supplement
thereto, or in any Blue Sky Application, or arises out of or is 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, in
each case to the extent, but only to the extent, that such untrue statement or
alleged untrue statement or omission or alleged omission was made in the
Registration Statement, any Preliminary Prospectus, the Prospectus, or any
amendment or supplement thereto, or in any Blue Sky Application, in reliance
solely upon and in conformity with the written information furnished by the
Underwriters to the Offerors pursuant to section 4 of this Agreement. Each
Underwriter will severally reimburse any legal fees or other expenses incurred
by the Offerors, or any such director, officer, or controlling person in
connection with investigating or defending any such Claim, and from any and all
Claims solely resulting from failure of an Underwriter to deliver a Prospectus,
if the person asserting such Claim purchased Designated Preferred Securities
from such Underwriter and a copy of the Prospectus (as then amended if the
Offerors shall have furnished any amendments thereto) was not sent or given by
or on behalf of such Underwriter to such person, if required by law so to have
been delivered, at or prior to the written confirmation of the sale of the
Designated Preferred Securities to such person, and if the Prospectus (as so
amended) would have cured the defect giving rise to such Claim. The
indemnification obligations of each Underwriter as provided above are in
addition to any
31
Xxxxxx X. Xxxxx & Co. Incorporated
December 15, 1997
Page 31
liabilities any such Underwriter may otherwise have. Notwithstanding the
provisions of this section, no Underwriter shall be required to indemnify or
reimburse the Offerors, or any officer, director, or controlling person in an
aggregate amount in excess of the total price at which the Designated Preferred
Securities purchased by any such Underwriter hereunder were offered to the
public, less the amount of any damages such Underwriter has otherwise been
required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission.
(c) Promptly after receipt by an indemnified party under
this section of notice of the commencement of any action in respect of a Claim,
such indemnified party will, if a Claim in respect thereof is to be made
against an indemnifying party under this section, notify the indemnifying party
in writing of the commencement thereof, but the omission so to notify the
indemnifying party will not relieve an indemnifying party from any liability it
may have to any indemnified party under this section or otherwise. In case any
such action is brought against any indemnified party, and such indemnified
party notifies an indemnifying party of the commencement thereof, the
indemnifying party will be entitled to participate in and, to the extent that
he, she or it may wish, jointly with all other indemnifying parties, similarly
notified, to assume the defense thereof, with counsel reasonably satisfactory
to such indemnified party; provided, however, if the defendants in any such
action include both the indemnified party and any indemnifying party and the
indemnified party shall have reasonably concluded that there may be legal
defenses available to the indemnified party and/or other indemnified parties
which are different from or additional to those available to any indemnifying
party, the indemnified party or parties shall have the right to select separate
counsel to assume such legal defenses and to otherwise participate in the
defense of such action on behalf of such indemnified party or parties.
(d) Upon receipt of notice from the indemnifying party to
such indemnified party of the indemnifying party's election to assume the
defense of such action and upon approval by the indemnified party of counsel
selected by the indemnifying party, the indemnifying party will not be liable
to such indemnified party under this section for any legal fees or other
expenses subsequently incurred by such indemnified party in connection with the
defense thereof, unless:
(i) the indemnified party shall have employed
separate counsel in connection with the assumption of legal defenses in
accordance with the proviso to the last sentence of subsection (c) of this
section;
(ii) the indemnifying party shall not have
employed counsel reasonably satisfactory to the indemnified party to represent
the indemnified party within a reasonable time after the indemnified party's
notice to the indemnifying party of commencement of the action; or
(iii) the indemnifying party has authorized the
employment of counsel at the expense of the indemnifying party.
32
Xxxxxx X. Xxxxx & Co. Incorporated
December 15, 1997
Page 32
(e) If the indemnification provided for in this section
is unavailable to an indemnified party under subsection (a) or (b) hereof in
respect of any Claim referred to therein, then each indemnifying party, in lieu
of indemnifying such indemnified party, shall, subject to the limitations
hereinafter set forth, contribute to the amount paid or payable by such
indemnified party as a result of such Claim:
(i) in such proportion as is appropriate to
reflect the relative benefits received by the Offerors and the Underwriters
from the offering of the Designated Preferred Securities; or
(ii) if the allocation provided by clause (i)
above is not permitted by applicable law, in such proportion as is appropriate
to reflect not only the relative benefits referred to in clause (i) above, but
also the relative fault of the Offerors and the Underwriters in connection with
the statements or omissions which resulted in such Claim, as well as any other
relevant equitable considerations.
The relative benefits received by each of the Offerors and the
Underwriters shall be deemed to be in such proportion so that the Underwriters
are responsible for that portion represented by the percentage that the amount
of the underwriting compensations per Designated Preferred Securities appearing
on the cover page of the Prospectus bears to the public offering price per
share appearing thereon, and the Offerors (including its officers and directors
and controlling persons), are responsible for the remaining portion. The
relative fault of the Offerors and the Underwriters shall be determined by
reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to state a
material fact relates to information supplied by the Offerors or the
Underwriters and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission. The amount
paid or payable by a party as a result of the Claims referred to above shall be
deemed to include, subject to the limitations set forth in subsection (c) of
this section, any legal or other fees or expenses reasonably incurred by such
party in connection with investigating or defending any action or claim.
(f) The Offerors and the Underwriters agree that it would
not be just and equitable if contribution pursuant to this section were
determined by pro rata or per capita allocation (even if the Underwriters were
treated as one entity for such purpose) or by any other method or allocation
which does not take into account the equitable considerations referred to in
subsection (e) of this section 11. Notwithstanding the other provisions of
this section, no Underwriter shall be required to contribute any amount that is
greater than the amount by which the total price at which the Designated
Preferred Securities underwritten by it and distributed to the public were
offered to the public exceeds the amount of any damages which such Underwriter
has otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations to contribute
33
Xxxxxx X. Xxxxx & Co. Incorporated
December 15, 1997
Page 33
pursuant to this section are several in proportion to their respective
underwriting commitments and not joint.
(g) The Company agrees to indemnify the Trust against any
and all claims, losses, damages, or liabilities that may become due from the
Trust under this section 11.
SECTION 12. Default of Underwriters. It shall be a condition to the
obligations of each Underwriter to purchase the Designated Preferred Securities
in the manner as described herein, that, except as hereinafter provided in this
section, each of the Underwriters shall purchase and pay for all the Designated
Preferred Securities agreed to be purchased by such Underwriter hereunder upon
tender to the Underwriters of all such Designated Preferred Securities in
accordance with the terms hereof. If any Underwriter or Underwriters default
in their obligations to purchase Designated Preferred Securities hereunder on
either the First Closing Date or the Second Closing Date and the aggregate
number of Designated Preferred Securities which such defaulting Underwriter or
Underwriters agreed but failed to purchase does not exceed ten percent (10%) of
the total number of Designated Preferred Securities which the Underwriters are
obligated to purchase on such Closing Date, the Underwriters may make
arrangements for the purchase of such Designated Preferred Securities by other
persons, including any of the Underwriters, but if no such arrangements are
made by such Closing Date the nondefaulting Underwriters shall be obligated
severally, in proportion to their respective commitments hereunder, to purchase
the Designated Preferred Securities which such defaulting Underwriters agreed
but failed to purchase on such Closing Date. If any Underwriter or
Underwriters so default and the aggregate number of Designated Preferred
Securities with respect to which such default or defaults occur is greater than
ten percent (10%) of the total number of Designated Preferred Securities which
the Underwriters are obligated to purchase on such Closing Date, and
arrangements satisfactory to the Underwriters for the purchase of such
Designated Preferred Securities by other persons are not made within thirty-six
hours after such default, this Agreement will terminate without liability on
the part of any nondefaulting Underwriter, except for the expenses to be paid
by the Offerors pursuant to section 8 hereof and except to the extent provided
in section 11 hereof.
In the event that Designated Preferred Securities to which a default
relates are to be purchased by the nondefaulting Underwriters or by another
party or parties, the Underwriters shall have the right to postpone the First
Closing Date or the Second Closing Date, as the case may be, for not more than
seven business days in order that the necessary changes in the Registration
Statement, Prospectus and any other documents, as well as any other
arrangements, may be effected. As used in this Agreement, the term
"Underwriter" includes any person substituted for an Underwriter under this
section. Nothing herein will relieve a defaulting Underwriter from liability
for its default.
SECTION 13. Effective Date. This Agreement shall become effective
upon the execution and delivery of this Agreement by the parties hereto. Such
execution and delivery shall include
34
Xxxxxx X. Xxxxx & Co. Incorporated
December 15, 1997
Page 34
an executed copy of this Agreement sent by telecopier, facsimile transmission
or other means of transmitting written documents.
SECTION 14. Termination. Without limiting the right to terminate
this Agreement pursuant to any other provision hereof, this Agreement may be
terminated by the Underwriters prior to or on the First Closing Date and the
over-allotment option from the Offerors referred to in section 5 hereof, if
exercised, may be canceled by the Underwriters at any time prior to or on the
Second Closing Date, if in the judgment of the Underwriters, payment for and
delivery of the Designated Preferred Securities is rendered impracticable or
inadvisable because:
(a) additional governmental restrictions, not in force
and effect on the date hereof, 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 or the American Stock Exchange, or
trading in securities generally shall have been suspended or materially limited
on either such exchange or on The Nasdaq Stock Market or a general banking
moratorium shall have been established by either federal or state authorities
in New York, Michigan, Arizona, or Wisconsin;
(b) any event shall have occurred or shall exist which
makes untrue or incorrect in any material respect any statement or information
contained in the Registration Statement or which is not reflected in the
Registration Statement but should be reflected therein to make the statements
or information contained therein not misleading in any material respect; or
(c) an outbreak or escalation of hostilities or other
national or international calamity or any substantial change in political,
financial or economic conditions shall have occurred or shall have accelerated
to such extent, in the judgment of the Underwriters, as to have a material
adverse effect on the financial markets of the United States, or to make it
impracticable or inadvisable to proceed with completion of the sale of and
payment for the Designated Preferred Securities as provided in this Agreement.
Any termination pursuant to this section shall be without liability on
the part of any Underwriter to the Offerors, or on the part of the Offerors to
any Underwriter, except for expenses to be paid by the Offerors pursuant to
section 8 hereof or reimbursed by the Offerors pursuant to section 6(n) hereof
and except as to indemnification to the extent provided in section 11 hereof.
SECTION 15. Representations and Indemnities to Survive Delivery. The
respective indemnities, agreements, representations, warranties, covenants and
other statements of the each of the Offerors, of its officers, directors, or
trustees and of the several Underwriters set forth in or made pursuant to this
Agreement will remain in full force and effect, regardless of any investigation
made by or on behalf of any Underwriter or Offeror or any of its or their
partners, officers, directors, trustees or any controlling person, as the case
may be, and will survive delivery of and payment for the Designated Preferred
Securities sold hereunder.
35
Xxxxxx X. Xxxxx & Co. Incorporated
December 15, 1997
Page 35
SECTION 16. Notices. All communications hereunder will be in writing
and, if sent to the Underwriters, will be mailed, delivered, telecopied (with
receipt confirmed) or telegraphed and confirmed to Xxxxxx X. Xxxxx & Co.
Incorporated at 000 Xxxx Xxxxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxxx 00000,
Attention: Xxxxxx X. Xxxx; with a copy to Xxxxxx X. Xxxxxxx, Esq., Varnum,
Riddering, Xxxxxxx & Xxxxxxx LLP, 17th Floor, 000 Xxxxxx Xxxxxx, X.X., Xxxxx
Xxxxxx, Xxxxxxxx 00000; and if sent to either Offeror, will be mailed,
delivered, telecopied (with receipt confirmed) or telegraphed and confirmed to
either Offeror at One Business & Trade Center, 000 Xxxxxxxxxx Xxxxxx Xxxxx,
Xxxxxxx, Xxxxxxxx 00000, Attention: Xxx X. Xxxxxxxxxxx, with a copy to Xxxx
Xxxxx, Xxxxxx & Xxxxx, P.C., 000 X. Xxxxxxxx Xxxx, Xxxxx 000, Xxxxxxxxxx Xxxxx,
Xxxxxxxx 00000
SECTION 17. Successors. This Agreement will inure to the benefit of
and be binding upon the parties hereto and their respective successors,
personal representatives and assigns, and to the benefit of the officers and
directors and controlling persons referred to in section 11 hereof and no other
person will have any right or obligation hereunder. The term "successors" shall
not include any purchaser of the Designated Preferred Securities as such from
any of the Underwriters merely by reason of such purchase.
SECTION 18. Partial Unenforceability. If any section, paragraph,
clause or provision of this Agreement is for any reason determined to be
invalid or unenforceable, such determination shall not affect the validity or
enforceability of any other section, paragraph clause or provision hereof.
SECTION 19. Applicable Law; Counterparts. This Agreement shall be
governed by and construed in accordance with the internal laws of the State of
Wisconsin without reference to conflict of law principles thereunder. This
Agreement may be signed in various counterparts which together shall constitute
one and the same instrument, and shall be effective when at least one
counterpart hereof shall have been executed by or on behalf of each party
hereto.
If the foregoing is in accordance with your understanding of our
agreement, kindly sign and return to us the enclosed duplicates hereof,
whereupon it will become a binding agreement among the Offerors and the several
Underwriters, all in accordance with its terms.
Very truly yours,
Capitol Bancorp Ltd.
By: /s/ XXXXXX X. XXXX
------------------------------------
Xxxxxx X. Xxxx
Its Chairman, President and
Chief Executive Officer
----------------------------
[SIGNATURES CONTINUED ON NEXT PAGE]
36
Xxxxxx X. Xxxxx & Co. Incorporated
December 15, 1997
Page 36
[SIGNATURES CONTINUED FROM PRIOR PAGE]
Capitol Trust I
By: /s/ XXXXXX X. XXXX
------------------------------------
Xxxxxx X. Xxxx
Its Administrative Trustee
---------------------------------
The foregoing Underwriting Agreement
is hereby confirmed and accepted as
of the date first above written.
XXXXXX X. XXXXX & CO. INCORPORATED
By: /s/ XXXXXX X. XXXX
----------------------------------
Authorized Representative
XXXXXX, XXXXXXXX & COMPANY INCORPORATED
By: /s/ XXXX X. XXXXXX
----------------------------------
Authorized Representative
XXXX XXXXXX INVESTMENTS, INC.
By: /s/ XXXXXX X. XXXXXXXX
----------------------------------
Authorized Representative
37
CAPITOL TRUST I
CAPITOL BANCORP LTD.
Schedule I
Number of
Firm Preferred
Underwriter Securities
----------- --------------
Xxxxxx X. Xxxxx & Co. Incorporated. . . . . . . . . . . . . . . . . . 1,210,000
Stifel, Nicolous & Company Incorporated . . . . . . . . . . . . . . . 660,000
Xxxx Xxxxxx Investments, Inc. . . . . . . . . . . . . . . . . . . . . 330,000
---------
Total 2,200,000
=========
