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EXHIBIT 1
1,300,000 SHARES
MERCANTILE BANK CORPORATION
COMMON STOCK
UNDERWRITING AGREEMENT
____________, 1997
▇▇▇▇▇ & Co., L.L.C.
▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Dear Sirs:
Mercantile Bank Corporation, a Michigan corporation (the "Company"),
proposes to issue and sell 1,300,000 shares (the "Firm Shares") of its
authorized but unissued Common Stock (the "Common Stock") to the several
underwriters named in Exhibit A attached to this Agreement (the "Underwriters")
for whom ▇▇▇▇▇ & Co., L.L.C., a Delaware limited liability company, is acting
as representative ("▇▇▇▇▇ & Co."). In addition, the Company proposes to grant
to the Underwriters an option to purchase up to an additional 195,000 shares
(the "Optional Shares") to cover over-allotments. The Firm Shares and the
Optional Shares are called, collectively, the "Shares."
1. SALE AND PURCHASE OF THE SHARES.
(a) On the basis of the representations, warranties and
agreements of the Company contained in, and subject to the terms
and conditions of, this Agreement, the Company agrees to issue and
sell to the Underwriters, and the Underwriters agree severally and
not jointly, to purchase, the Firm Shares set forth opposite their
respective names on Exhibit A at a purchase price of $9.30 per
Share, except as set forth in Section 1(b) below.
(b) On the basis of the representations, warranties and
agreements of the Company contained in, and subject to the terms
and conditions of, this Agreement, the policies of the National
Association of Securities Dealers, Inc. (the "NASD"), and pursuant
to directions from the Company, the Underwriters will offer to
sell to each of the persons listed on Exhibit B (who may purchase
alone or with family members to the extent permitted by the
Free-Riding and Withholding Interpretation (the "Interpretation")
under the Rules of Fair Practice of the NASD) the number of Shares
set forth opposite their respective names on
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Exhibit B. To the extent such persons (alone or with such family
members) offer to buy such Shares, the Underwriters agree to
purchase up to 328,500 of such Shares at a purchase price of $9.85
per Share. The parties agree that the securities purchased and
sold under this subparagraph shall constitute "issuer directed
securities" sold to the issuer's employees or directors or other
persons under the Interpretation.
(c) On the basis of the representations, warranties and
agreements of the Company contained in, and subject to the terms
and conditions of, this Agreement, the Company grants to the
Underwriters an option to purchase all or any part of the Optional
Shares at a price per Share of $9.30. The over-allotment option
may be exercised only to cover over-allotments in the sale of the
Firm Shares by the Underwriters and may be exercised in whole or
in part at any time or times on or before 12:00 noon, Detroit
time, on the day before the Firm Shares Closing Date (as defined
in Section 2 below), and only once at any time after that date and
within 30 days after the Effective Date (as defined in Section 4
below), in each case upon written or transmitted facsimile notice,
or verbal notice confirmed by transmitted facsimile, written or
telegraphic notice, by ▇▇▇▇▇ & Co. to the Company no later than
12:00 noon, Detroit time, on the day before the Firm Shares
Closing Date or at least three but not more than five full
business days before the Optional Shares Closing Date (as defined
in Section 2 below), as the case may be, setting forth the number
of Optional Shares to be purchased and the time and date (if other
than the Firm Shares Closing Date) of such purchase. The number
of Optional Shares to be purchased by each Underwriter shall be
determined by multiplying the number of Optional Shares to be sold
by the Company pursuant to such notice of exercise by a fraction,
the numerator of which is the number of Firm Shares to be
purchased by such Underwriter as set forth opposite its name on
Exhibit A and the denominator of which is 1,300,000 (subject to
such adjustments to eliminate any fractional share purchases as
▇▇▇▇▇ & Co. at its discretion may make).
(d) ▇▇▇▇▇ & Co. represents and warrants to the Company that
each Underwriter has authorized ▇▇▇▇▇ & Co. to accept delivery of
its Shares and to make payment and to accept receipt therefor.
▇▇▇▇▇ & Co., individually and not as the representative of the
Underwriters, may (but shall not be obligated to) make payment for
any Shares to be purchased by any Underwriter whose funds shall
not have been received by ▇▇▇▇▇ & Co. by the Firm Shares Closing
Date (as defined in Section 2 below) or the Optional Shares
Closing Date (as defined in Section 2 below), as the case may be,
for the account for such Underwriter, but any such payment shall
not relieve such Underwriter from any of its obligations under
this Agreement. ▇▇▇▇▇ & Co. represents and warrants that it has
been authorized by each of the other Underwriters to enter into
this Agreement on its behalf and to act for it in the manner
herein provided.
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2. DELIVERY AND PAYMENT. Delivery by the Company of the Firm Shares to
▇▇▇▇▇ & Co., for the respective accounts of the Underwriters, and payment of
the purchase price by certified or official bank check payable in Detroit
Clearing House (next day) funds to the Company, shall take place at the offices
of ▇▇▇▇▇ & Co., ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, at 10:00 a.m., Detroit
time, at such time and date, not later than the third (or, if the Firm Shares
are priced, as contemplated by Rule 15c6-1(c) under the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), after 4:30 p.m., Washington, D.C.
time, the fourth) full business day following the first date that any of the
Shares are released by the Underwriters for sale to the public, as ▇▇▇▇▇ & Co.
shall designate by at least 48 hours prior notice to the Company (the "Firm
Shares Closing Date"); provided, however, that if the Prospectus (as defined in
Section 4 below) is at any time prior to the Firm Shares Closing Date
recirculated to the public, the Firm Shares Closing Date shall occur upon the
later of the third or fourth, as the case the may be, full business day
following the first date that any of the Shares are released by the
Underwriters for sale to the public or the date that is 48 hours after the date
that the Prospectus has been so recirculated.
To the extent the option with respect to the Optional Shares is exercised,
delivery by the Company of the Optional Shares, and payment of the purchase
price by certified or official bank check payable in Detroit Clearing House
(next day) funds to the Company, shall take place at the offices of ▇▇▇▇▇ & Co.
specified above at the time and on the date (which may be the Firm Shares
Closing Date) specified in the notice referred to in Section 1(c) (such time
and date of delivery and payment are called the "Optional Shares Closing
Date"). The Firm Shares Closing Date and the Optional Shares Closing Date are
called, individually, a "Closing Date" and, collectively, the "Closing Dates."
Certificates representing the Firm Shares shall be registered in such
names and shall be in such denominations as ▇▇▇▇▇ & Co. shall request at least
two full business days before the Firm Shares Closing Date or, in the case of
the Optional Shares, on the day of notice of exercise of the option as
described in Section 1(c), and shall be made available to ▇▇▇▇▇ & Co. for
checking and packaging, at such place as is designated by ▇▇▇▇▇ & Co., at least
one full business day before the Closing Date.
3. PUBLIC OFFERING. The Company understands that the Underwriters propose
to make a public offering of their respective portions of the Shares, as set
forth in and pursuant to the Prospectus, as soon after the Effective Date as
▇▇▇▇▇ & Co. deems advisable. The Company hereby confirms that the Underwriters
and dealers have been authorized to distribute each preliminary prospectus and
are authorized to distribute the Prospectus (as from time to time amended or
supplemented).
4. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company represents and warrants to the Underwriters and agrees with
the Underwriters as follows:
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(a) The Company has carefully prepared in conformity with the
requirements of the Securities Act of 1933, as amended (the
"Securities Act") and the rules and regulations adopted by the
Securities and Exchange Commission (the "Commission") thereunder
(the "Rules"), a registration statement on Form SB-2 (No.
_________), including a preliminary prospectus, and has filed with
the Commission the registration statement and such amendments
thereof as may have been required to the date of this Agreement.
Copies of such registration statement (including all amendments
thereof) and of the related preliminary prospectus have heretofore
been delivered by the Company to you. The term "preliminary
prospectus" means any preliminary prospectus (as defined in Rule
430 of the Rules) included at any time as a part of the
registration statement. The registration statement as amended
(including any supplemental registration statement under Rule
462(b) or any amendment under Rule 462(c) of the Rules) at the
time and on the date it becomes effective (the "Effective Date"),
including the prospectus, financial statements, schedules,
exhibits, and all other documents incorporated by reference
therein or filed as a part thereof, is called the "Registration
Statement;" provided, however, that "Registration Statement" shall
also include all Rule 430A Information (as defined below) deemed
to be included in such Registration Statement at the time such
Registration Statement becomes effective as provided by Rule 430A
of the Rules. The term "Prospectus" means the Prospectus as filed
with the Commission pursuant to Rule 424(b) of the Rules or, if no
filing pursuant to Rule 424(b) of the Rules is required, means the
form of final prospectus included in the Registration Statement at
the time such Registration Statement becomes effective. The term
"Rule 430A Information" means information with respect to the
Shares and the offering thereof permitted to be omitted from the
Registration Statement when it becomes effective pursuant to Rule
430A of the Rules. Reference made herein to any preliminary
prospectus or to the Prospectus shall be deemed to refer to and
include any document attached as an exhibit thereto or
incorporated by reference therein, as of the date of such
preliminary prospectus or the Prospectus, as the case may be. The
Company will not file any amendment of the Registration Statement
or supplement to the Prospectus to which ▇▇▇▇▇ & Co. shall
reasonably object in writing after being furnished with a copy
thereof.
(b) Each preliminary prospectus, at the time of filing
thereof, contained all material statements which were required to
be stated therein in accordance with the Securities Act and the
Rules, and conformed in all material respects with the
requirements of the Securities Act and the Rules, and did not
include any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under
which they were made, not misleading. The Commission has not
issued any order suspending or preventing the use of any
preliminary prospectus. When the Registration Statement shall
become effective, when the Prospectus is first filed pursuant to
Rule 424(b) of the Rules, when any post-effective amendment of the
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Registration Statement shall become effective, when any supplement
to or pre-effective amendment of the Prospectus is filed with the
Commission and at each Closing Date, the Registration Statement
and the Prospectus (and any amendment thereof or supplement
thereto) will comply with the applicable provisions of the
Securities Act and the Exchange Act and the respective rules and
regulations of the Commission thereunder, and neither the
Registration Statement nor the Prospectus, nor any amendment
thereof or supplement thereto, will contain any untrue statement
of a material fact or will omit to state any material fact
required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they
were made, not misleading; provided, however, that the Company
makes no representation or warranty as to the information
contained in the Registration Statement or the Prospectus or any
amendment thereof or supplement thereto in reliance upon and in
conformity with information furnished in writing to the Company by
any of the Underwriters, specifically for use in connection with
the preparation thereof.
(c) All contracts and other documents required to be filed as
exhibits to the Registration Statement have been filed with the
Commission as exhibits to the Registration Statement.
(d) ▇▇▇▇▇, ▇▇▇▇▇▇ & Company, LLP, whose report is filed with
the Commission as part of the Registration Statement, are, and
during the periods covered by their report were, independent
public accountants as required by the Securities Act and the
Rules.
(e) The Company and its subsidiary, Mercantile Bank of West
Michigan, a Michigan banking corporation (the "Bank"), have been
duly organized and are validly existing as a corporation or
banking corporation, as applicable, in good standing under the
laws of the State of Michigan. Neither the Company nor the Bank
have any properties or conduct any business outside of the State
of Michigan which would require either of them to be qualified as
a foreign corporation or bank, as the case may be, in any
jurisdiction outside of Michigan. Neither the Company nor the
Bank has any directly or indirectly held subsidiary other than the
Bank. The Company has all power, authority, authorizations,
approvals, consents, orders, licenses, certificates and permits
needed to enter into, deliver and perform this Agreement and to
issue and sell the Shares.
(f) The application for permission to organize the Bank (the
"FIB Application") was approved by the Commissioner of the
Financial Institutions Bureau for the State of Michigan (the
"Commissioner") on ________, 1997, pursuant to Order No.
BT-___________, subject to certain conditions specified in the
Order and supplemental correspondence from the Commissioner dated
the same date. The Order and supplemental correspondence from the
Commissioner are collectively referred to in this Agreement as the
"FIB Order." All conditions
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contained in the FIB Order have been satisfied, except those
conditions relating to paid-in capital of the Bank, maintenance of
capital ratios and valuation reserves, the Certificate of Paid-In
Capital and Surplus, and completion of the Commissioner's
preopening investigation. The application to the Federal Deposit
Insurance Corporation (the "FDIC") to become an insured depository
institution under the provisions of the Federal Deposit Insurance
Act (the "FDIC Application") was approved by order of the FDIC
dated __________, 1997 (the "FDIC Order"), subject to certain
conditions specified in the Order. All conditions contained in
the FDIC Order required to be satisfied before the date of this
Agreement have been satisfied. The Company's application to
become a bank holding company and acquire all issued capital stock
of the Bank (the "Bank Holding Company Application") under the
Bank Holding Company Act of 1956, as amended, was approved on
____________, 1997 (the "Federal Reserve Board Approval"), subject
to certain conditions specified in the Federal Reserve Board
Approval. All conditions in the Federal Reserve Board Approval
required to be satisfied before the date of this Agreement have
been satisfied. Each of the FIB Application, FDIC Application,
and Bank Holding Company Application, at the time of their
respective filings, contained all required information and such
information was complete and accurate in all material respects.
Other than the remaining conditions to be fulfilled under the FIB
Order, FDIC Order and the Federal Reserve Board Approval specified
above, no authorization, approval, consent, order, license,
certificate or permit of and from any federal, state, or local
governmental or regulatory official, body, or tribunal, is
required for the Company or the Bank to commence and conduct their
respective businesses and own their respective properties as
described in the Prospectus, except such authorizations,
approvals, consents, orders, licenses, certificates, or permits as
are not material to the commencement or conduct of their
respective businesses or to the ownership of their respective
properties.
(g) The financial statements of the Company and any related
notes thereto, included in the Registration Statement and the
Prospectus, present fairly the financial position of the Company
as of the date of such financial statements and for the period
covered thereby. Such statements and any related notes have been
prepared in accordance with generally accepted accounting
principals applied on a consistent basis and certified by the
independent accountants named in subsection 4(d) above. No other
financial statements are required to be included in the Prospectus
or the Registration Statement.
(h) The Company owns adequate and enforceable rights to use
any patents, patent applications, trademarks, trademark
applications, service marks, copyrights, copyright applications
and other similar rights (collectively, "Intangibles") necessary
for the conduct of the material aspects of its business as
described in the Prospectus and the Company has not infringed, is
infringing, or has received any notice of infringement of, any
Intangible of any other person.
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(i) The Company has a valid and enforceable leasehold
interest in the real property located at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, which is as described in the
Prospectus, and is free and clear of all liens, encumbrances,
claims, security interests and defects.
(j) There are no litigation or governmental or other
proceedings or investigations pending before any court or before
or by any public body or board or threatened against the Company
or the Bank and to the best of the Company's knowledge, there is
no reasonable basis for any such litigation, proceedings or
investigations, which would have a material adverse effect on
commencement or conduct of the respective businesses of the
Company or the Bank or the ownership of their respective
properties.
(k) The Company and Bank have filed all federal, state, and
local tax returns required to be filed by them and paid all taxes
shown due on such returns as well as all other material taxes,
assessments and governmental charges which have become due; no
material deficiency with respect to any such return has been
assessed or proposed.
(l) Subsequent to the respective dates as of which
information is given in the Registration Statement and the
Prospectus, there has not been any material adverse change in the
condition (financial or other), business, properties or prospects
of the Company.
(m) No default exists, and no event has occurred which with
notice or lapse of time, or both, would constitute a default, in
the due performance and observance of any material term, covenant
or condition, by the Company, the Bank or, to the best of the
Company's knowledge, any other party, of any lease, indenture,
mortgage, note or any other agreement or instrument to which the
Company or the Bank is a party or by which either of them or
either of their businesses may be bound or affected, except such
defaults or events as are not material to the commencement or
conduct of their respective businesses or ownership of their
respective properties.
(n) Neither the Company nor the Bank is in violation of any
term or provision of the articles of incorporation or bylaws of
the Company or the Bank. Neither the Company nor the Bank is in
violation of, nor is either of them required to take any action to
avoid any material violation of, any franchise, license, permit,
judgment, decree, order, statute, rule or regulation.
(o) Neither the execution, delivery or performance of this
Agreement by the Company nor the consummation of the transactions
contemplated hereby (including, without limitation, the issuance
and sale by the Company of the Shares) will give rise to a right
to terminate or accelerate the due date of any
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payment due under, or conflict with or result in the breach of any
term or provision of, or constitute a default (or an event which
with notice or lapse of time, or both, would constitute a default)
under, or require any consent under, or result in the execution or
imposition of any lien, charge or encumbrance upon any properties
or assets of the Company or the Bank pursuant to the terms of, any
lease, indenture, mortgage, note or other agreement or instrument
to which the Company or the Bank is a party or by which either of
them or either of their businesses may be bound or affected, or
any franchise, license, permit, judgment, decree, order, statute,
rule or regulation or violate any provision of the articles of
incorporation or bylaws of the Company or the Bank, except those
which are immaterial in amount or effect.
(p) The Company has authorized capital stock as set forth in
the Prospectus. One share of Common Stock of the Company is
issued and outstanding, which will be redeemed at or promptly
following the Closing if permitted by applicable law. No shares
of preferred stock are issued and outstanding. The issuance, sale
and delivery of the Shares have been duly authorized by all
necessary corporate action by the Company and, when issued, sold
and delivered against payment therefor pursuant to this Agreement,
will be duly and validly issued, fully paid and nonassessable and
none of them will have been issued in violation of any preemptive
or other right. Upon issuance, sale, and delivery thereof against
payment therefor pursuant to the subscription agreement, all of
the capital stock of the Bank will be duly authorized and validly
issued, fully paid and nonassessable and will be owned by the
Company, free and clear of all liens, encumbrances and security
interests (subject to the provisions of the Michigan Banking Code
of 1969 (the "Banking Code"), including, without limitation,
Sections 77 and 201 of the Banking Code). There is no outstanding
option, warrant or other right calling for the issuance of, and no
commitment, plan or arrangement to issue, any share of stock of
the Company or the Bank or any security convertible into or
exchangeable for stock of the Company or the Bank, except for
stock options described in the Registration Statement (the "Stock
Options") under the 1997 Employee Stock Option Plan (the "Stock
Option Plan"). The Common Stock, the Shares and the Stock Options
conform to all statements in relation thereto contained in the
Registration Statement and the Prospectus.
(q) Subsequent to the respective dates as of which
information is given in the Registration Statement and the
Prospectus, neither the Company nor the Bank has (1) issued any
securities or incurred any material liability or obligation,
direct or contingent, (2) entered into any material transaction,
or (3) declared or paid any dividend or made any distribution on
any of their stock, except liabilities, obligations, and
transactions reasonably expected based on the disclosures in the
Prospectus, and redemption of one share of Common Stock for $10 at
or promptly following the Closing if permitted by applicable law.
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(r) This Agreement has been duly and validly authorized,
executed and delivered by the Company and is the legal, valid and
binding agreement and obligation of the Company.
(s) The Commission has not issued any order preventing or
suspending the use of any preliminary prospectus.
(t) Neither the Company, nor the Bank, nor, to the Company's
knowledge any director, officer, agent, employee or other person
associated with the Company or the Bank, acting on behalf of the
Company or the Bank, has used any corporate funds for any unlawful
contribution, gift, entertainment or other unlawful expense
relating to political activity; made any direct or indirect
unlawful payment to any foreign or domestic government official or
employee from corporate funds; violated or is in violation of any
provision of the Foreign Corrupt Practices Act of 1977; or made
any bribe, rebate, payoff, influence payment, kickback or other
unlawful payment.
(u) Neither the Company nor the Bank nor any affiliate of
either of them has taken, and they will not take, directly or
indirectly, any action designed to cause or result in, or which
has constituted or which might reasonably be expected to
constitute, the stabilization or manipulation of the price of the
shares of the Common Stock in order to facilitate the sale or
resale of any of the Shares.
(v) No transaction has occurred between or among the Company
or the Bank and any of their officers, directors, organizers or
the Company's shareholder or any affiliate or affiliates of any
such officer, director, organizer, or shareholder, that is
required to be described in and is not described in the
Prospectus.
(w) The Company is not and will not after the offering be an
"investment company," or a company "controlled" by an "investment
company," within the meaning of the Investment Company Act of
1940, as amended.
(x) The Company has obtained from all of its executive
officers and directors their written agreement that (i) for a
period of 150 days from the date of the Effective Date, they will
not offer to sell, sell, transfer, contract to sell, or grant any
option for the sale of or otherwise dispose of, directly or
indirectly, any shares of Common Stock of the Company (or any
securities convertible into or exercisable for such shares of
Common Stock), except for (1) the exercise of Stock Options under
the Stock Option Plan or (2) gifts of Common Stock (or other
securities) to a donee or donees who agree in writing to be bound
by this clause, and (ii) for a period of three months from the
date of the Effective Date, they will not sell, transfer, assign,
pledge, or hypothecate any shares of Common Stock acquired under
Paragraph l(b), above, except with respect to ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇,
▇▇. who may resell one share of Common Stock to the Company.
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5. CONDITIONS OF THE UNDERWRITERS' OBLIGATIONS. The obligation of the
Underwriters to purchase the Shares shall be subject to the accuracy of the
representations and warranties of the Company in this Agreement as of the date
of this Agreement and as of the Firm Shares Closing Date or Optional Shares
Closing Date, as the case may be, to the accuracy of the statements of Company
officers made pursuant to the provisions of this Agreement, to the performance
by the Company of its obligations under this Agreement, and to the following
additional terms and conditions:
(a) The Registration Statement shall have become effective
not later than 5:00 P.M., Detroit time, on the date of this
Agreement or on such later date and time as shall be consented to
in writing by ▇▇▇▇▇ & Co.; if the filing of the Prospectus, or any
supplement thereto, is required pursuant to Rule 424(b) of the
Rules, the Prospectus shall have been filed in the manner and
within the time period required by Rule 424(b) of the Rules; at
each Closing Date, if any, no stop order shall have been issued or
proceedings therefor initiated or threatened by the Commission;
and any request of the Commission for inclusion of additional
information in the Registration Statement, or otherwise, shall
have been complied with to the reasonable satisfaction of ▇▇▇▇▇ &
Co.
(b) At each Closing Date, ▇▇▇▇▇ & Co., as representative of
the Underwriters, shall have received the favorable opinion of
Dickinson, Wright, Moon, Van Dusen & ▇▇▇▇▇▇▇, counsel for the
Company, dated the Firm Shares Closing Date or the Optional Shares
Closing Date, as the case may be, addressed to the Underwriters
and in form and scope reasonably satisfactory to counsel for ▇▇▇▇▇
& Co. to the effect that:
(i) Each of the Company and the Bank (A) is a
corporation or banking corporation, as applicable, existing
and in good standing under the laws of the State of Michigan
and (B) is not required to be qualified to do business in
any jurisdiction outside Michigan.
(ii) Each of the Company and the Bank has full
corporate power and authority and all material
authorizations, approvals, orders, licenses, certificates
and permits of and from all governmental bank regulatory
officials and bodies necessary to own its properties and to
commence and conduct its business as described in the
Registration Statement and Prospectus, including, without
limitation, the FIB Order, the FDIC Order and the Federal
Reserve Board Approval, subject to the fulfillment of the
conditions with respect to the FIB Order, the FDIC Order and
the Federal Reserve Board Approval all as described in
Section 4(f) above, except for such authorizations,
approvals, orders, licenses, certificates and permits as are
not material to the ownership of their properties or
commencement or conduct of their businesses;
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(iii) The Company has authorized capital stock as set
forth in the Prospectus and, prior to the Closing, had one
share of Common Stock issued and outstanding; the Shares
have been duly and validly authorized and issued and upon
receipt by the Company of payment therefor in accordance
with the terms of this Agreement will be fully paid and
nonassessable and are not and will not be subject to,
preemptive rights; the Shares and the other capital stock
and Stock Options of the Company conform in all material
respects to the descriptions thereof contained in the
Registration Statement and the Prospectus;
(iv) To such counsel's knowledge, after due inquiry,
the Company has no directly or indirectly held subsidiary
other than the Bank;
(v) When issued, sold, and delivered against payment
therefor in accordance with the terms of the subscription
agreement, the Company will be the registered holder of all
of the outstanding capital stock of the Bank, and all such
shares of stock so held will be validly issued and
outstanding, fully paid and nonassessable and will be owned
free and clear of any liens, encumbrances or other claims or
restrictions whatsoever, subject to the provisions of the
Banking Code, including, without limitation, Sections 77 and
201 of the Banking Code;
(vi) the certificates evidencing the Shares are in the
form approved by the Board of Directors of the Company,
comply with the bylaws and the articles of incorporation of
the Company, comply as to form and in all other material
respects with applicable legal requirements;
(vii) this Agreement has been duly and validly
authorized, executed and delivered by the Company, and is
the legal, valid and binding agreement and obligation of the
Company enforceable in accordance with its terms, except (a)
as enforcement thereof may be limited by bankruptcy,
insolvency, reorganization, moratorium or other laws
relating to or affecting enforcement of creditors' rights or
by general equity principles (including requirements of
reasonableness and good faith in the exercise of rights and
remedies), whether applied by a court of equity or a court
of law in an action at law or in equity, or by the
discretionary nature of specific performance, injunctive
relief, and other equitable remedies, including the
appointment of a receiver, and (b), with respect to
provisions relating to indemnification and contribution, to
the extent they are held by a court of competent
jurisdiction to be void or unenforceable as against public
policy or limited by applicable laws or the policies
embodied in them;
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(viii) the Company is conveying to the respective
Underwriters good and valid title to the Shares that are
issued in their names, free and clear of any adverse claims,
except to the extent any respective Underwriter has notice
of any adverse claim;
(ix) to the best of such counsel's knowledge, after due
inquiry, there are (A) no contracts or other documents which
are required to be filed as exhibits to the Registration
Statement other than those filed as exhibits thereto, (B) no
legal or governmental proceedings pending or threatened
against the Company or the Bank, and (C) no statutes or
regulations applicable to the Company or the Bank, or
certificates, permits, grants or other consents, approvals,
orders, licenses or authorizations from regulatory officials
or bodies, which are required to be obtained or maintained
by the Company or the Bank and which are of a character
required to be disclosed in the Registration Statement and
Prospectus which have not been so disclosed;
(x) the statements in the Registration Statement and
the Prospectus, insofar as they are descriptions of
corporate documents, stock option plans, contracts, or
agreements or descriptions of laws, regulations, or
regulatory requirements, or refer to compliance with law or
to statements of law or legal conclusions, are correct in
all material respects;
(xi) to the best of such counsel's knowledge, after due
inquiry, the execution, delivery and performance of this
Agreement, the consummation of the transactions herein
contemplated and the compliance with the terms and
provisions hereof by the Company will not give rise to a
right to terminate or accelerate the due date of any payment
due under, or conflict with or result in a breach of any of
the terms or provisions of, or constitute a default (or an
event which, with notice or lapse of time, or both, would
constitute a default) under, or require any consent under,
or result in the execution or imposition of any lien, charge
or encumbrance upon any properties or assets of the Company
or the Bank pursuant to the terms of, any lease, indenture,
mortgage, note or other agreement or instrument to which the
Company or the Bank is a party or by which either of them or
either of their properties or businesses is or may be bound
or affected, nor will such action result in any violation of
the provisions of the articles of incorporation or bylaws of
the Company or the Bank or any statute or any order, rule,
or regulation applicable to the Company or the Bank of any
court or any federal, state, local or other regulatory
authority or other governmental body, the effect of which,
in any such case, would be expected to be materially adverse
to the Company or the Bank;
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(xii) to the best of such counsel's knowledge, after
due inquiry, no consent, approval, authorization or order of
any court or governmental agency or body, domestic or
foreign, is required to be obtained by the Company in
connection with the execution and delivery of this Agreement
or the sale of the Shares to the Underwriters as
contemplated by this Agreement, except those which have been
obtained;
(xiii) to the best of such counsel's knowledge, after
due inquiry, (A) neither the Company nor the Bank is in
breach of, or in default (and no event has occurred which,
with notice or lapse of time, or both, would constitute a
default) under, any lease, indenture, mortgage, note, or
other agreement or instrument to which the Company or the
Bank, as the case may be, is a party; or (B) neither the
Company nor the Bank is in violation of any term or
provision of either of their articles of incorporation or
bylaws, or of any franchise, license, grant, permit,
judgment, decree, order, statute, rule or regulation; and
(C) neither the Company nor the Bank has received any notice
of conflict with the asserted rights of others in respect of
Intangibles necessary for the commencement or conduct of its
business, the effect of which, in any such case, would be
expected to be materially adverse to the Company or the
Bank;
(xiv) the Registration Statement and the Prospectus and
any amendments or supplements thereto (other than the
financial statements as to which no opinion need be
rendered) comply as to form with the requirements of the
Securities Act and the Rules in all material respects; and
(xv) the Registration Statement is effective under the
Securities Act, and, to the best of such counsel's
knowledge, after due inquiry, no proceedings for a stop
order are pending or threatened under the Securities Act.
In rendering the foregoing opinion, such counsel may rely
upon certificates of public officials (as to matters of fact and
law) and officers of the Company (as to matters of fact), and
include qualifications in its opinion as are reasonably acceptable
to ▇▇▇▇▇ & Co. Copies of all such certificates shall be furnished
to counsel to ▇▇▇▇▇ & Co. on the Closing Date.
In addition, such counsel shall state that they have
participated in conferences with officers of the Company and a
representative of the Underwriters at which the contents of the
Registration Statement and Prospectus and related matters were
discussed and although such counsel did not independently verify
the accuracy or completeness of the statements made in the
Registration Statement and Prospectus and does not assume any
responsibility for the accuracy or
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completeness of the statements in the Registration Statement and
Prospectus, on the basis of the foregoing, nothing has come to the
attention of such counsel that would lead them to believe that the
Registration Statement or Prospectus, as amended or supplemented,
if amended or supplemented, contains any untrue statement of a
material fact or omits a material fact required to be stated
therein or necessary to make the statements therein not
misleading; except that such statement may exclude financial
statements, financial data, and statistical information included
in the Registration Statement and Prospectus.
(c) On or prior to each Closing Date, ▇▇▇▇▇ & Co., as
representative of the Underwriters, shall have been furnished such
documents, certificates and opinions as they may reasonably
require for the purpose of enabling them to review the matters
referred to in subsection (b) of this Section 5, and in order to
evidence the accuracy, completeness or satisfaction of the
representations, warranties or conditions herein contained.
(d) Prior to each Closing Date, (i) there shall have been no
material adverse change in the condition or prospects, financial
or otherwise, of the Company or the Bank; (ii) there shall have
been no material transaction, not in the ordinary course of
business, entered into by the Company or the Bank except as set
forth in the Registration Statement and Prospectus, other than
transactions referred to or contemplated therein or to which ▇▇▇▇▇
& Co. has given its written consent; (iii) neither the Company nor
the Bank shall be in default (nor shall an event have occurred
which, with notice or lapse of time, or both, would constitute a
default) under any provision of any material agreement,
understanding or instrument relating to any outstanding
indebtedness that is material in amount; (iv) no action, suit or
proceeding, at law or in equity, shall be pending or threatened
against the Company or the Bank before or by any court or Federal,
state or other commission, board or other administrative agency
having jurisdiction over the Company or the Bank, as the case may
be, which is expected to have a material adverse effect on the
Company or the Bank; and (v) no stop order shall have been issued
under the Securities Act and no proceedings therefor shall have
been initiated or be threatened by the Commission.
(e) At each Closing Date, ▇▇▇▇▇ & Co., as representative of
the Underwriters, shall have received a certificate signed by the
Chairman of the Board, and the President or Secretary of the
Company dated the Firm Shares Closing Date or Optional Shares
Closing Date, as the case may be, to the effect that the
conditions set forth in subsection (d) above have been satisfied
and as to the accuracy, as of the Firm Shares Closing Date or the
Optional Shares Closing Date, as the case may be, of the
representations and warranties of the Company set forth in Section
4 hereof.
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(f) At or prior to each Closing Date, ▇▇▇▇▇ & Co., as
representative of the Underwriters, shall have received a "blue
sky" memorandum of Dickinson, Wright, Moon, Van Dusen & ▇▇▇▇▇▇▇,
counsel for the Company, addressed to ▇▇▇▇▇ & Co. and in form and
scope reasonably satisfactory to ▇▇▇▇▇ & Co., as representative of
the Underwriters, concerning compliance with the blue sky or
securities laws of the states listed in Exhibit C attached to this
Agreement.
(g) All proceedings taken in connection with the sale of the
Shares as herein contemplated shall be reasonably satisfactory in
form and substance to ▇▇▇▇▇ & Co. and to counsel for ▇▇▇▇▇ & Co.,
and ▇▇▇▇▇ & Co. shall have received from counsel for ▇▇▇▇▇ & Co. a
favorable opinion, dated as of each Closing Date, with respect to
such of the matters set forth under subsections (b) (i), (iii),
(vi), (vii), and (xv) of this Section 5, and with respect to such
other related matters as ▇▇▇▇▇ & Co. may reasonably require, if
the failure to receive a favorable opinion with respect to such
other related matters would cause ▇▇▇▇▇ & Co. to deem it
inadvisable to proceed with the sale of the Shares.
(h) There shall have been duly tendered to ▇▇▇▇▇ & Co., as
representative of the Underwriters, certificates representing all
the Shares agreed to be sold by the Company on the Firm Shares
Closing Date or the Optional Shares Closing Date, as the case may
be.
(i) No order suspending the sale of the Shares prior to each
Closing Date, in any jurisdiction listed in Exhibit C, shall have
been issued on the Firm Shares Closing Date or the Optional Shares
Closing Date, as the case may be, and no proceedings for that
purpose shall have been instituted or, to ▇▇▇▇▇ & Co.'s knowledge
or that of the Company, shall be contemplated.
(j) The NASD, upon review of the terms of the public offering
of the Shares, shall not have objected to the Underwriters'
participation in the same.
If any condition to the Underwriters' obligations hereunder to be
fulfilled prior to or at the Firm Shares Closing Date or the Optional Shares
Closing Date, as the case may be, is not so fulfilled, ▇▇▇▇▇ & Co., as
representative of the Underwriters, may terminate this Agreement pursuant to
Section 9(c) hereof or, if ▇▇▇▇▇ & Co., as representative of the Underwriters,
so elects, waive any such conditions which have not been fulfilled or extend
the time of their fulfillment.
6. COVENANTS.
The Company covenants and agrees that it will:
(a) Use its best efforts to cause the Registration Statement
to become effective and will notify ▇▇▇▇▇ & Co. immediately, and
confirm the notice in
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writing, (i) when the Registration Statement and any
post-effective amendment thereto becomes effective, (ii)Eof the
issuance by the Commission of any stop order or of the initiation,
or the threatening, of any proceedings for that purpose and (iii)
of the receipt of any comments from the Commission. The Company
will make every reasonable effort to prevent the issuance of a
stop order, and, if the Commission shall enter a stop order at any
time, the Company will make every reasonable effort to obtain the
lifting of such order at the earliest possible moment.
(b) During the time when a prospectus is required to be
delivered under the Securities Act, comply so far as it is able
with all requirements imposed upon it by the Securities Act, as
now and hereafter amended, and by the Rules, as from time to time
in force, so far as necessary to permit the continuance of sales
of or dealings in the Shares. If at any time when a prospectus
relating to the Shares is required to be delivered under the
Securities Act any event shall have occurred as a result of which,
in the reasonable opinion of counsel for the Company or counsel
for ▇▇▇▇▇ & Co., the Registration Statement or Prospectus as then
amended or supplemented includes an untrue statement of a material
fact or omits to state any material fact required to be stated
therein or necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading,
or if it is necessary at any time to amend or supplement the
Registration Statement or Prospectus to comply with the Securities
Act, the Company will notify ▇▇▇▇▇ & Co. promptly and prepare and
file with the Commission an appropriate amendment or supplement in
form satisfactory to ▇▇▇▇▇ & Co. The cost of preparing, filing and
delivering copies of such amendment or supplement shall be paid by
the Company.
(c) Deliver to the Underwriters such number of copies of each
preliminary prospectus as may reasonably be requested by ▇▇▇▇▇ &
Co., as representative of the Underwriters, and, as soon as the
Registration Statement, or any amendment or supplement thereto,
becomes effective, deliver to each Underwriter three signed copies
of the Registration Statement, including exhibits, and all
post-effective amendments thereto and deliver to the Underwriters
such number of copies of the Prospectus, the Registration
Statement and supplements and amendments thereto, if any, without
exhibits, as ▇▇▇▇▇ & Co., as representative of the Underwriters,
may reasonably request.
(d) Endeavor in good faith, in cooperation with ▇▇▇▇▇ & Co.
and its counsel, at or prior to the time the Registration
Statement becomes effective, to qualify the Shares for offering
and sale under the securities laws relating to the offering or
sale of the Shares of the states listed in Exhibit C. In each
jurisdiction where such qualification shall be effected, the
Company will, unless ▇▇▇▇▇ & Co. agrees that such action is not at
the time necessary or advisable, file and make such statements or
reports at such times as are or may reasonably be required by
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the laws of such jurisdiction. The Company will advise ▇▇▇▇▇ &
Co. promptly of the suspension of the qualification of the Shares
for offering, sale or trading in any jurisdiction, or any
initiation or threat of any proceeding for such purpose, and in
the event of the issuance of any order suspending such
qualification, the Company, with the cooperation of ▇▇▇▇▇ & Co.,
will use all reasonable efforts to obtain the withdrawal thereof.
(e) Furnish its security holders as soon as practicable an
earnings statement (which need not be certified by independent
certified public accountants unless required by the Securities Act
or the Rules) covering a period of at least twelve months
beginning after the effective date of the Registration Statement,
which shall satisfy the provisions of Section 11(a) of the
Securities Act and the Rules thereunder.
(f) For a period of five years from the Effective Date,
furnish to its shareholders annual audited and quarterly unaudited
consolidated financial statements with respect to the Company
including balance sheets and income statements.
(g) For a period of five years from the Effective Date,
furnish to ▇▇▇▇▇ & Co. and, upon request of ▇▇▇▇▇ & Co., to each
of the other Underwriters, the following:
(i) at the time they have been sent to shareholders of
the Company or filed with the Commission three copies of
each annual, quarterly, interim, or current financial and
other report or communication sent by the Company to its
shareholders or filed with the Commission;
(ii) as soon as practicable, three copies of every
press release and every material news item and article in
respect of the Company or the affairs of the Company which
was released by the Company;
(iii) all other information reasonably requested by
▇▇▇▇▇ & Co. with respect to the Company to comply with Rule
15c2-11 of the Rules and Section 4 of Schedule H of the NASD
By-Laws; and
(iv) such additional documents and information with
respect to the Company and its affairs as ▇▇▇▇▇ & Co. may
from time to time reasonably request.
(h) Acquire all of the Bank's outstanding capital stock, free
and clear of all liens, encumbrances, or other claims or
restrictions whatsoever, for not less than $___________ from the
proceeds of the offering and, in all other material
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respects, apply the net proceeds from the offering in the manner
set forth under "Use of Proceeds" in the Prospectus.
(i) Not file any amendment or supplement to the Registration
Statement or Prospectus after the effective date of the
Registration Statement to which ▇▇▇▇▇ & Co. shall reasonably
object in writing after being furnished a copy thereof.
(j) Timely file with the Commission reports on Form SR (if
applicable) containing the information required by that Form in
accordance with the provisions of Rule 463 of the Regulation under
the Act.
(k) Comply with all registration, filing and reporting
requirements of the Securities Act or the Exchange Act, which may
from time to time be applicable to the Company.
(l) Cause the proper submission of the Certificate of Paid-In
Capital and Surplus, give advance written notice to the
Commissioner of the Bank's projected opening date, and in all
other respects use reasonable efforts to comply with the
requirements of, and satisfy the conditions of, the FIB Order, the
FDIC Order and the Federal Reserve Board Approval, which are
required to be complied with prior to the Bank commencing the
business of banking; provided, however, that it shall not be a
breach of this Section 6(l) for the Company or the Bank to fail to
maintain any specified level of capital, surplus, capital ratio,
valuation reserve or financial or operating performance after the
Bank has commenced the business of banking or to fail to satisfy
any such requirement or condition if such failure is waived or
performance of such requirement or condition is accepted as
sufficient by the FIB, the FDIC, and/or the Federal Reserve Board,
as applicable.
(m) Pay, or reimburse if paid by the Underwriters, whether or
not the transactions contemplated hereby are consummated or this
Agreement is terminated, all costs and expenses incident to the
performance of the obligations of the Company under this
Agreement, including those relating to (1) the preparation,
printing, filing and delivery of the Registration Statement,
including all exhibits thereto, each preliminary prospectus, the
Prospectus, all amendments of and supplements to the Registration
Statement and the Prospectus, and the photocopying of the
Underwriting Agreement and related agreements including, without
limitation, the Dealer Agreement and Agreement Among Underwriters;
(2) the issuance of the Shares and the preparation and delivery of
certificates for the Shares to the Underwriters; (3) the
registration or qualification of the Shares for offer and sale
under the securities or "blue sky" laws of the various
jurisdictions referred to in Exhibit C, including the fees and
disbursements of counsel in connection with such registration and
qualification and the preparation and printing of preliminary,
supplemental, and final blue sky memoranda; (4) the furnishing
(including costs of shipping and mailing) to the Underwriters of
copies
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of each preliminary prospectus, the Prospectus and all amendments
of or supplements to the Prospectus, and of the several documents
required by this Section to be so furnished; (5) the filing
requirements and fees of the NASD in connection with its review of
the terms of the public offering and the underwriting; (6) the
furnishing (including costs of shipping and mailing) of copies of
all reports and information required by Section 6(g); (7) all
transfer taxes, if any, with respect to the sale and delivery of
the Shares by the Company to the Underwriters; (8) the inclusion
of the Shares on the OTC Bulletin Board; and (9) the Underwriters'
out-of-pocket expenses, including without limitation, road show
expenses and legal fees of counsel to ▇▇▇▇▇ & Co. (such
out-of-pocket expenses and legal fees payable by the Company shall
not exceed $20,000). Upon a successful completion of the
offering, the Underwriters will credit the out-of-pocket and legal
fee reimbursement described in Section 6(m)(9) against the
underwriting discount.
(n) Not, without the prior written consent of ▇▇▇▇▇ & Co.,
sell, contract to sell or grant any option for the sale of or
otherwise dispose of, directly or indirectly, or register with the
Commission, any shares of Common Stock of the Company (or any
securities convertible into or exercisable for such shares of
Common Stock) within 150 days after the date of the Prospectus,
except as provided in this Agreement and except for grants and
exercises of Stock Options under the Stock Option Plan as
described in the Prospectus.
(o) For not less than 3 fiscal years after the Effective
Date, unless ▇▇▇▇▇ & Co. shall otherwise consent in writing, (i)
timely file with the Commission all reports required by Section
15(d) of the Exchange Act and not seek suspension of the duty to
file such reports, and (ii) not less frequently than annually
prepare a proxy statement and annual report which conform
substantially to the requirements of Commission Regulation 14A and
distribute such proxy statement and annual report to record and
beneficial owners substantially in the manner which would be
required by Commission Regulation 14A if applicable.
(p) Use its best efforts to cause itself and the Bank to
commence their businesses as described in the Prospectus not later
than December 31, 1997.
7. INDEMNIFICATION.
(a) The Company agrees to indemnify and hold harmless the
Underwriters and each person, if any, who controls the
Underwriters within the meaning of Section 15 of the Securities
Act or Section 20 of the Exchange Act against any and all losses,
claims, damages and liabilities, joint or several (including any
reasonable investigation, legal and other expenses incurred in
connection with, and any amount paid in settlement of, any action,
suit or proceeding or any claim asserted), to which they may
become subject under the
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Securities Act, the Exchange Act or other Federal or state
statutory law or regulation, at common law or otherwise, insofar
as such losses, claims, damages or liabilities arise out of or are
based upon any untrue statement or alleged untrue statement of a
material fact contained in any preliminary prospectus, the
Registration Statement or the Prospectus or any amendment thereof
or supplement thereto, or arise out of or are based upon the
omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements
therein not misleading; provided, however, that such indemnity
shall not inure to the benefit of the Underwriters (or any person
controlling the Underwriters) on account of any losses, claims,
damages or liabilities arising from the sale of the Shares in the
public offering to any person by the Underwriters if such untrue
statement or omission or alleged untrue statement or omission was
made in such preliminary prospectus, the Registration Statement or
the Prospectus, or such amendment or supplement, in reliance upon
and in conformity with information furnished in writing to the
Company by or on behalf of the Underwriters specifically for use
therein. The Company shall not be liable hereunder to an
Underwriter (or any controlling person thereof) to the extent that
any loss, claim, damage or other liability incurred by the
Underwriter arises from the Underwriter's fraudulent act or
omission.
(b) Each Underwriter severally agrees to indemnify and hold
harmless the Company, each person, if any, who controls the
Company within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act, each director of the Company and
each officer of the Company who signs the Registration Statement,
to the same extent as the foregoing indemnity from the Company to
the Underwriters, but only insofar as such losses, claims, damages
or liabilities arise out of or are based upon any untrue statement
or omission or alleged untrue statement or omission which was made
in any preliminary prospectus, the Registration Statement or the
Prospectus, or any amendment thereof or supplement thereto, in
reliance upon and in conformity with information furnished in
writing to the Company by any of the Underwriters specifically for
use therein; provided, however, that the obligation of each
Underwriter to indemnify the Company (including any controlling
person, director or officer thereof) hereunder shall be limited to
the total price at which the Shares purchased by that Underwriter
hereunder were offered to the public. The Underwriters shall not
be liable hereunder to the Company (including any controlling
person, director or officer thereof) to the extent that any loss,
claim, damage or other liability incurred by the Company arises
from a fraudulent act or omission by the Company.
(c) Any party that proposes to assert the right to be
indemnified under this Section will, promptly after receipt of
notice of commencement of any action, suit or proceeding against
such party in respect of which a claim is to be made against an
indemnifying party or parties under this Section, notify each such
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indemnifying party of the commencement of such action, suit or
proceeding, enclosing a copy of all papers served, but the
omission so to notify such indemnifying party of any such action,
suit or proceeding shall not relieve it from any liability that it
may have to any indemnified party otherwise than under this
Section. In case any such action, suit or proceeding shall be
brought against any indemnified party and it shall notify the
indemnifying party of the commencement thereof, the indemnifying
party shall be entitled to participate in, and, to the extent that
it shall wish, jointly with any other indemnifying party similarly
notified, to assume the defense thereof, with counsel reasonably
satisfactory to such indemnified party, and after notice from the
indemnifying party to such indemnified party of its election so to
assume the defense thereof and the approval by the indemnified
party of such counsel, the indemnifying party shall not be liable
to such indemnified party for any legal or other expenses, except
as provided below and except for the reasonable costs of
investigation subsequently incurred by such indemnified party in
connection with the defense thereof. The indemnified party shall
have the right to employ its counsel in any such action, but the
fees and expenses of such counsel shall be at the expense of such
indemnified party unless (1) the employment of counsel by such
indemnified party has been authorized in writing by the
indemnifying parties, (2) the indemnified party shall have
reasonably concluded that, because of the existence of different
or additional defenses available to the indemnified party or of
other reasons, there may be a conflict of interest between the
indemnifying parties and the indemnified party in the conduct of
the defense of such action (in which case the indemnifying parties
shall not have the right to direct the defense of such action on
behalf of the indemnified party) or that, under the circumstances,
it is otherwise appropriate, or (3) the indemnifying parties shall
not have employed counsel to assume the defense of such action
within a reasonable time after notice of the commencement thereof,
in each of which cases the fees and expenses of counsel shall be
at the expense of the indemnifying parties. An indemnifying party
shall not be liable for any settlement of any action, suit,
proceeding or claims effected without its written consent.
8. CONTRIBUTION. In order to provide for just and equitable contribution
in circumstances in which the indemnification provided for in Section 7(a) or
7(b) is due in accordance with its terms but for any reason is held to be
unavailable, the Company and the Underwriters shall contribute to the aggregate
losses, claims, damages and liabilities (including any investigation, legal and
other expenses reasonably incurred in connection with, and any amount paid in
settlement of, any action, suit or proceeding or any claims asserted, but after
deducting any contribution received from other persons), to which the Company
and the Underwriters may be subject, in such proportion so that the
Underwriters are responsible for that portion represented by the percentage
that the underwriting discount appearing on the front cover page of the
Prospectus bears to the public offering price appearing thereon and the Company
is responsible for the balance; provided, however, that (a) in no case shall
the Underwriters be responsible for any amount in excess of the underwriting
discount applicable to the Shares
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purchased by the Underwriters hereunder and (b) no person found guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. For purposes of this Section,
each person, if any, who controls the Underwriters within the meaning of the
Securities Act or the Exchange Act shall have the same rights to contribution
as the Underwriters, and each person, if any, who controls the Company within
the meaning of the Securities Act or the Exchange Act, each officer and each
director of the Company shall have the same rights to contribution as the
Company, subject in each case to clauses (a) and (b) of this Section. Any
party entitled to contribution will, promptly after receipt of notice of
commencement of any action, suit or proceeding against such party in respect of
which a claim for contribution may be made against another party or parties
under this Section, notify such party or parties from whom contribution may be
sought, but the omission so to notify such party or parties from whom
contribution may be sought shall not relieve the party or parties from whom
contribution may be sought from any other obligation it or they may have
hereunder or otherwise than under this Section. No party shall be liable for
contribution with respect to any action, suit, proceeding or claim settled
without its written consent.
In any proceeding relating to the Registration Statement, any preliminary
prospectus, the Prospectus or any supplement thereto or amendment thereof, each
party against whom contribution may be sought under this Section 8 hereby
consents to the jurisdiction of any court in Michigan, agrees that process
issuing from such court may be served upon him or it by any other contributing
party and consents to the service of such process and agrees that any other
contributing party may join him or it as an additional defendant in any such
proceeding in which such other contributing party is a party.
9. TERMINATION. This Agreement may be terminated by ▇▇▇▇▇ & Co. by
notifying the Company at any time:
(a) before the earliest of (1) 11:00 a.m., Detroit time, on
the business day following the Effective Date, (2) the time of
release by ▇▇▇▇▇ & Co. for publication of the first newspaper
advertisement with respect to the Shares and (3) the time when the
Shares are first generally offered by the Underwriters to dealers
by letter or telegram;
(b) at or before any Closing Date if, in the judgment of
▇▇▇▇▇ & Co., payment for and delivery of the Shares is rendered
impracticable or inadvisable because (1) additional material
governmental restrictions, not known to be in force and effect
when this Agreement is signed, shall have been imposed upon
trading in securities generally or minimum or maximum prices shall
have been generally established on the New York Stock Exchange, on
the American Stock Exchange or on the over-the-counter market, or
trading in securities generally shall have been suspended on
either such Exchange or on the over-the-counter market or a
general banking moratorium shall have been established by federal,
New York or Michigan authorities, (2) a war or other calamity
shall have occurred or shall have
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accelerated to such an extent as to affect adversely the
marketability of the Shares, (3) the Company or the Bank shall
have sustained a material loss by fire, flood, accident,
hurricane, earthquake, theft, sabotage or other calamity or
malicious act, which, whether or not said loss shall have been
insured, will in ▇▇▇▇▇ & Co.'s opinion, make it inadvisable to
proceed with the offering of the Shares, (4) the FIB Order, the
FDIC Order, or the Federal Reserve Board Approval shall have been
withdrawn or materially altered, or notice shall have been
received to the effect that any of such approvals will not be
received, or, if received, will be subject to conditions that the
Company would not be able to fulfill in a reasonable time in ▇▇▇▇▇
& Co.'s reasonable opinion, (5) in ▇▇▇▇▇ & Co.'s reasonable
opinion it is not probable that the Company and Bank will be able
to commence business before December 31, 1997, for any reason, or
(6) there shall have been such material change in the condition,
business operations or prospects of the Company or the market for
the Shares or similar securities as in ▇▇▇▇▇ & Co.'s judgment
would make it inadvisable to proceed with the offering of the
Shares; or
(c) at or before any Closing Date, if any of the conditions
specified in Section 5 or any other agreements, representations or
warranties of the Company in this Agreement shall not have been
fulfilled when and as required by this Agreement.
If this Agreement is terminated pursuant to any of its provisions, except as
otherwise provided in this Agreement, the Company shall not be under any
liability to the Underwriters (other than for obligations assumed in Section 6
hereof), and the Underwriters shall not be under any liability to the Company;
provided, however, that if this Agreement is terminated by ▇▇▇▇▇ & Co. because
of any failure, refusal or inability on the part of the Company to comply with
the terms or to fulfill any of the conditions of this Agreement, or for any
reasons provided in subparagraphs (b) (other than (b)(6)) and (c) above, the
Company will reimburse the Underwriters for all accountable out-of-pocket
expenses (including, without limitation, road show expenses and fees and
disbursements of counsel to ▇▇▇▇▇ & Co.) up to a maximum of $40,000 (including
the $20,000 advance below) incurred by them in connection with the proposed
purchase and sale of the Shares or in contemplation of performing their
obligations hereunder. The Underwriters acknowledge receipt of a $20,000
advance from the Company. If this Agreement is terminated for any reason, the
Underwriters shall be entitled to retain such advance as reimbursement for
their accountable out-of-pocket expenses; provided, however, in the event that
the accountable out-of-pocket expenses to be reimbursed under this paragraph
are less than $20,000, the Underwriters shall pay such difference to the
Company. If this Agreement is not terminated, the $20,000 shall be credited at
closing against the underwriting discount.
10. REPRESENTATIONS AND AGREEMENTS TO SURVIVE DELIVERY. All
representations, warranties and agreements contained in this Agreement shall be
deemed to be representations, warranties and agreements at the Closing Dates,
and such representations, warranties and agreements of the Company, including,
without limitation, the payment and reimbursement
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agreements contained in Section 6 hereof and the indemnity and contribution
agreements contained in Sections 7 and 8 hereof, shall remain operative and in
full force and effect regardless of any investigation made by or on behalf of
the Underwriters or any controlling person and shall survive termination of
this Agreement and/or delivery of the Shares to and payment for the Shares by
the Underwriters pursuant to this Agreement. In addition, the covenants
contained in Section 6 hereof, the agreements contained in this Section 10 and
in Sections 7, 8 and 9 shall survive termination of this Agreement and/or
delivery of the Shares to and payment for the Shares by the Underwriters
pursuant to this Agreement.
11. MISCELLANEOUS. This Agreement has been and is made for the benefit of
the Underwriters, the Company and their respective successors and assigns, and,
to the extent expressed herein, for the benefit of persons controlling the
Underwriters or the Company, and directors and certain officers of the Company,
and their respective successors and assigns, and no other person, partnership,
association or corporation shall acquire or have any right under or by virtue
of this Agreement. The term "successors and assigns" shall not include any
purchaser of Shares from the Underwriters merely because of such purchase.
If any action or proceeding shall be brought by any Underwriter or the
Company in order to enforce any right or remedy under this Agreement, the
Underwriters and the Company hereby consent to, and agree that they will submit
to, the jurisdiction of the courts of the State of Michigan and of any Federal
court sitting in the State of Michigan.
All notices and communications hereunder shall be in writing and mailed or
delivered or by telephone or telegraph, if subsequently confirmed in writing,
to the Underwriters, c/▇ ▇▇▇▇▇ & Co., at ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
(facsimile No. (▇▇▇) ▇▇▇-▇▇▇▇) (with a copy to ▇▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ and ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
(facsimile No. (▇▇▇) ▇▇▇-▇▇▇▇)); and to the Company at ▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇., Chairman of
the Board and Chief Executive Officer (facsimile No. (616) _________) (with a
copy to ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Dickinson, Wright, Moon, Van Dusen & ▇▇▇▇▇▇▇, ▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (facsimile No. (313)
223-3598)).
The laws of the State of Michigan shall govern this Agreement, its
construction, and the determination of any rights, duties or remedies of the
parties arising out of or relating to this Agreement. The parties acknowledge
that the United States District Court for the Eastern District of Michigan or
the Michigan Circuit Court for the County of ▇▇▇▇▇ shall have exclusive
jurisdiction over any case or controversy arising out of or relating to this
Agreement and that all litigation arising out of or relating to this Agreement
shall be commenced in the United States District Court for the Eastern District
of Michigan or in the ▇▇▇▇▇ County (Michigan) Circuit Court.
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Please confirm that the foregoing correctly sets forth the agreement
between us.
Very truly yours,
MERCANTILE BANK CORPORATION
By: __________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
Its: Chief Executive Officer
Confirmed by ▇▇▇▇▇ & Co.,
as representative for, and on behalf of,
the Underwriters named on Exhibit A:
▇▇▇▇▇ & CO., L.L.C.
By:_______________________________
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Director, Corporate Finance
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EXHIBIT A
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EXHIBIT B
Number Relationship
of of Person to
Name Shares to the Company
------------------ ------ ---------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 25,000 Director
C. ▇▇▇▇ ▇▇▇▇ 25,000 Director
▇▇▇▇▇ ▇. ▇▇▇▇▇ 50,000 Director
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 50,000 Chairman of the Board,
Chief Executive Officer and
Director
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 13,500 Director
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 15,000 Director
▇▇▇▇▇ ▇▇▇▇▇▇ 50,000 Organizer
▇▇▇▇ ▇. ▇▇▇▇▇▇ 50,000 Director
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 50,000 Director
▇▇
▇▇▇▇▇▇▇ ▇
▇▇▇▇▇▇
▇▇▇▇▇▇▇
▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇
▇▇▇▇
