Exhibit 1.1(a)
_________ Shares
FLAGSTAR BANCORP, INC.
Common Stock
Form of
U.S UNDERWRITING AGREEMENT
--------------------------
_____________ __, 1997
▇▇▇▇▇▇ Brothers Inc.
PaineWebber Incorporated
▇▇▇▇▇ & Co.,
As Representatives of the several
U.S. Underwriters named in Schedule 1,
c/▇ ▇▇▇▇▇▇ Brothers Inc.
Three World ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Dear Sirs:
Flagstar Bancorp, Inc., a Michigan corporation (the "Company"), and
certain stockholders of the Company named in Schedule 2 hereto (the "Selling
Stockholders"), propose to sell an aggregate of _________ shares (the "Firm U.S.
Stock") of the Company's Common Stock, par value $0.01 per share (the "Common
Stock"). Of the _________ shares of the Firm U.S. Stock, _________ shares are
being sold by the Company and _________ shares by the Selling Stockholders. In
addition, the Company and the Selling Stockholders propose to grant to the U.S.
Underwriters named in Schedule 1 hereto (the "U.S. Underwriters") an option to
purchase up to an additional _______ shares and _______ shares, respectively, of
the Common Stock on the terms and for the purposes set forth in Section 3
(collectively, the "Option U.S. Stock"). The Firm U.S. Stock and the Option
U.S. Stock, if purchased, are hereinafter collectively called the "U.S. Stock."
This is to confirm the agreement concerning the purchase of the U.S. Stock from
the Company and the Selling Stockholders by the U.S. Underwriters.
It is understood by all parties that the Company and the Selling
Stockholders are concurrently entering into an agreement dated the date hereof
(the "International Underwriting Agreement") providing for the sale by the
Company and the Selling Stockholders of an aggregate of _________ Shares (the
"Firm Stock") and the granting of an option by the Company and the Selling
Shareholders to purchase up to an additional ________ Shares (the "Option
Stock"; and together with the Firm Stock, the "Stock") through arrangements with
the International Managers named in Schedule 1 to the International Underwriting
Agreement outside the United States and Canada, for whom ▇▇▇▇▇▇ Brothers
International (Europe), PaineWebber Incorporated and ▇▇▇▇▇ & Co. are acting as
lead managers ("Lead Managers"). The U.S. Underwriters and the International
Managers simultaneously are entering into an agreement between the U.S. and
international underwriting syndicates (the "Agreement Between U.S. Underwriters
and International Managers") which provides for, among other things, the
transfer of Common Stock
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between the two syndicates. Two forms of prospectus are to be used in
connection with the offering and sale of the Common Stock contemplated by the
foregoing, one relating to the U.S. Stock to be sold in the United States and
Canada (the "U.S. Prospectus") and the second relating to the Stock to be sold
outside of the United States and Canada (the "International Prospectus"). The
International Prospectus will be identical to the U.S. Prospectus except for
certain substitute and additional pages.
1. Representations, Warranties and Agreements of the Company and the
Selling Stockholders. The Company and the Selling Stockholders, jointly and
severally, represent, warrant and agree that:
(a) A registration statement on Form S-1, and one or more
amendments thereto, with respect to the U.S. Stock and the Stock have
(i) been prepared by the Company in conformity with the requirements
of the Securities Act of 1933, as amended (the "Securities Act"), and
the rules and regulations (the "Rules and Regulations") of the
Securities and Exchange Commission (the "Commission") thereunder, (ii)
been filed with the Commission under the Securities Act and (iii)
become effective under the Securities Act; and a second registration
statement on Form S-1 with respect to the U.S. Stock and the Stock (i)
may also be prepared by the Company in conformity with the
requirements of the Securities Act and the Rules and Regulations and
(ii) if to be so prepared, will be filed with the Commission under the
Securities Act pursuant to Rule 462(b) of the Rules and Regulations on
the date hereof. Copies of the first such registration statement and
the amendments to such registration statement, together with the form
of any such second registration statement, have been delivered by the
Company to you as the representatives (the "Representatives") of the
U.S. Underwriters. As used in this Agreement, "Effective Time" means
(i) with respect to the first such registration statement, the date
and the time as of which such registration statement, or the most
recent post-effective amendment thereto, if any, was declared
effective by the Commission and (ii) with respect to any second
registration statement, the date and time as of which such second
registration statement is filed with the Commission, and "Effective
Times" is the collective reference to both Effective Times; "Effective
Date" means (i) with respect to the first such registration statement,
the date of the Effective Time of such registration statement and (ii)
with respect to any second registration statement, the date of the
Effective Time of such second registration statement, and "Effective
Dates" is the collective reference to both Effective Dates;
"Preliminary Prospectus" means (i) the U.S. prospectus included in any
such registration statement, or amendments thereof, before it became
effective under the Securities Act and any prospectus filed with the
Commission by the Company with the consent of the Representatives
pursuant to Rule 424(a) of the Rules and Regulations and (ii) the
International Prospectus; "Primary Registration Statement" means the
first registration statement referred to in this Section 1(a), as
amended at its Effective Time, "Rule 462(b) Registration Statement"
means the second registration statement, if any, referred to in this
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Section 1(a), as filed with the Commission, and "Registration
Statements" means both the Primary Registration Statement and any Rule
462(b) Registration Statement, including in each case all information
contained in the final prospectus filed with the Commission pursuant
to Rule 424(b) of the Rules and Regulations in accordance with Section
6(a) hereof and deemed to be a part of the Registration Statements as
of the Effective Time of the Primary Registration Statement pursuant
to paragraph (b) of Rule 430A of the Rules and Regulations; and
"Prospectus" means such final U.S. Prospectus and International
Prospectus, as first filed with the Commission pursuant to paragraph
(1) or (4) of Rule 424(b) of the Rules and Regulations. The Commission
has not issued any order preventing or suspending the use of any
Preliminary Prospectus.
(b) The Primary Registration Statement conforms (and the Rule
462(b) Registration Statement, if any, the Prospectus and any further
amendments or supplements to the Registration Statements or the
Prospectus, when they become effective or are filed with the
Commission, as the case may be, will conform) in all respects to the
requirements of the Securities Act and the Rules and Regulations and
do not and will not, as of the applicable Effective Date (as to the
Registration Statements and any amendment thereto) and as of the
applicable filing date with the Commission (as to the Prospectus and
any amendment or supplement thereto) contain 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 not misleading;
provided that no representation or warranty is made as to information
contained in or omitted from the Registration Statements or the
Prospectus in reliance upon and in conformity with written information
furnished to the Company through the Representatives by or on behalf
of any U.S. Underwriter specifically for inclusion therein.
(c) the Prospectus delivered to the U.S. Underwriters for use in
connection with this offering was identical to the electronically
transmitted copies thereof filed with the Commission pursuant to
▇▇▇▇▇, except to the extent permitted by Regulation S-T;
(d) The Company and each of its subsidiaries (as defined in
Section 17) have been duly incorporated and are validly existing as
corporations in good standing under the laws of their respective
jurisdictions of incorporation (or, in the case of Flagstar Bank, FSB
(the "Bank"), is duly chartered and validly existing as a federal
stock savings bank in good standing under the Home Owners' Loan Act
("HOLA") and the rules and regulations of the Office of Thrift
Supervision ("OTS") thereunder), are duly qualified to do business and
are in good standing as foreign corporations in each jurisdiction in
which their respective ownership or lease of property or the conduct
of their respective businesses requires such qualification, except
where the failure to be so qualified and in good standing would not
have a material adverse effect on the consolidated financial position,
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stockholders' equity, results of operations, business or prospects of
the Company and its subsidiaries, are in compliance in all material
respects with the laws, orders, rules, regulations and directives
issued or administered by such jurisdictions and have all power and
authority necessary to own or hold their respective properties and to
conduct the businesses in which they are engaged.
(e) The Company has an authorized capitalization as set forth in
the Prospectus, and all of the issued shares of capital stock of the
Company have been duly and validly authorized and issued, are fully
paid and non-assessable and conform to the description thereof
contained in the Prospectus; and all of the issued shares of capital
stock of each subsidiary of the Company have been duly and validly
authorized and issued and are fully paid and non-assessable and
(except for directors' qualifying shares) are owned directly or
indirectly by the Company, free and clear of all liens, encumbrances,
equities or claims.
(f) The Company is duly registered as a savings and loan holding
company under HOLA; the Company owns, directly or indirectly,
beneficially and of record, all of the outstanding shares of capital
stock of the Bank; the Bank is a member in good standing of the
Federal Home Loan Bank System; the savings accounts of depositors in
the Bank are insured by the Savings Association Insurance Fund of the
Federal Deposit Insurance Corporation (the "FDIC") to the fullest
extent permitted by law and the rules and regulations of the FDIC, and
no proceedings for the termination of such insurance are pending or,
to the best of the Company's knowledge, threatened.
(g) The shares of the U.S. Stock to be issued and sold by the
Company to the U.S. Underwriters hereunder have been duly and validly
authorized and, when issued and delivered against payment therefor as
provided herein, will be duly and validly issued, fully paid and non-
assessable, and the U.S. Stock will conform to the descriptions
thereof contained in the Prospectus.
(h) The execution, delivery and performance of this Agreement
and the International Underwriting Agreement by the Company and the
consummation of the transactions contemplated hereby will not conflict
with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any indenture, mortgage,
deed of trust, loan agreement or other agreement or instrument to
which the Company or any of its subsidiaries is a party or by which
the Company or any of its subsidiaries is bound or to which any of the
properties or assets of the Company or any of its subsidiaries is
subject, except for such breaches, violations or defaults as would not
individually or in the aggregate have a material adverse effect on the
consolidated financial position, stockholders' equity, results of
operations, business or prospects of the Company and its subsidiaries,
nor will such actions result in any violation of the provisions of the
charter or by-laws of the Company or any of its subsidiaries or any
statute or any
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order, rule or regulation of any court or governmental agency or body
having jurisdiction over the Company or any of its subsidiaries or any
of their properties or assets; and except for the registration of the
U.S. Stock and the Stock under the Securities Act and under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), such
approvals as have been obtained in connection with the approval of the
quotation of the U.S. Stock and the Stock on the Nasdaq National
Market System and such filings or registrations as may be required
under applicable state securities laws in connection with the purchase
and distribution of the U.S. Stock and the Stock by the U.S.
Underwriters and International Managers, no consent, approval,
authorization or order of, or filing or registration with, any such
court or governmental agency or body is required for the execution,
delivery and performance of this Agreement by the Company and the
consummation of the transactions contemplated hereby.
(i) [Except as described in the Prospectus,] there are no
contracts, agreements or understandings between the Company and any
person granting such person the right to require the Company to file a
registration statement under the Securities Act with respect to any
securities of the Company owned or to be owned by such person or to
require the Company to include such securities in the securities
registered pursuant to the Registration Statements or in any
securities being registered pursuant to any other registration
statement filed by the Company under the Securities Act.
(j) Except as described in the Prospectus, the Company has not
sold or issued any shares of Common Stock during the six-month period
preceding the date of the Prospectus, including any sales pursuant to
Rule 144A under, or Regulations D or S of, the Securities Act [, other
than shares issued pursuant to employee benefit plans, qualified stock
options plans or other employee compensation plans or pursuant to
outstanding options, rights or warrants].
(k) Neither the Company nor any of its subsidiaries has
sustained, since the date of the latest audited financial statements
included in the Prospectus, any material loss or interference with its
business from fire, explosion, flood or other calamity, whether or not
covered by insurance, or from any labor dispute or court or
governmental action, order or decree, otherwise than as set forth or
contemplated in the Prospectus; and, since such date, there has not
been any change in the capital stock or long-term debt of the Company
or any of its subsidiaries or any material adverse change, or any
development involving a prospective material adverse change, in or
affecting the general affairs, management, financial position,
stockholders' equity or results of operations of the Company and its
subsidiaries, other than as set forth or contemplated in the
Prospectus.
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(l) The financial statements (including the related notes and
supporting schedules) filed as part of the Registration Statements or
included in the Prospectus present fairly the financial condition and
results of operations of the entities purported to be shown thereby,
at the dates and for the periods indicated, and have been prepared in
conformity with generally accepted accounting principles applied on a
consistent basis throughout the periods involved.
(m) ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP, who have certified certain financial
statements of the Company, whose report appears in the Prospectus and
who have delivered the initial letter referred to in Section 9(f)
hereof, are independent public accountants as required by the
Securities Act and the Rules and Regulations.
(n) The Company and each of its subsidiaries own or possess
adequate rights to use all material patents, patent applications,
trademarks, service marks, trade names, trademark registrations,
service ▇▇▇▇ registrations, copyrights and licenses necessary for the
conduct of their respective businesses as described in the Prospectus
and have no reason to believe that such conduct of their respective
businesses will conflict with, and have not received any notice of any
claim of conflict with, any such rights of others.
(o) There are no legal or governmental proceedings pending to
which the Company or any of its subsidiaries is a party or of which
any property or asset of the Company or any of its subsidiaries is the
subject which might have a material adverse effect on the consolidated
financial position, stockholders' equity, results of operations,
business or prospects of the Company and its subsidiaries; and to the
best of the Company's knowledge, no such proceedings are threatened or
contemplated by governmental authorities or threatened by others.
(p) Neither the Company nor any of its subsidiaries is a party
to any written agreement or memorandum of understanding with, or a
party to any commitment letter or similar undertaking to, or is
subject to any order or directive by, or is a recipient of any
extraordinary supervisory letter from, or has adopted any board
resolutions at the request of, the OTS, the FDIC or any other
government authority or agency responsible for the supervision,
regulation or insurance of depository institutions or their holding
companies which restricts materially the conduct of its business, or
in any manner relates to its capital adequacy (other than as described
in the Prospectus), its credit policies or its management, nor have
any of them been advised by the OTS, the FDIC or any such other
government authority or agency that it is contemplating issuing or
requesting (or is considering the appropriateness of issuing or
requesting) any such order, decree, agreement, memorandum of
understanding, extraordinary supervisory letter, commitment letter or
similar submission, or any such board resolutions.
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(q) There are no contracts or other documents which are required
to be described in the Prospectus or filed as exhibits to either of
the Registration Statements by the Securities Act or by the Rules and
Regulations which have not been described in the Prospectus or filed
as exhibits to either of the Registration Statements or incorporated
therein by reference as permitted by the Rules and Regulations.
(r) No relationship, direct or indirect, exists between or among
the Company on the one hand, and the directors, officers,
stockholders, customers or suppliers of the Company on the other hand,
which is required to be described in the Prospectus which is not so
described.
(s) Since the date as of which information is given in the
Prospectus through the date hereof, and except as may otherwise be
disclosed in the Prospectus, the Company has not (i) issued or granted
any securities, (ii) incurred any liability or obligation, direct or
contingent, other than liabilities and obligations which were incurred
in the ordinary course of business, (iii) entered into any transaction
not in the ordinary course of business or (iv) declared or paid any
dividend on its capital stock.
(t) Neither the Company nor any of its subsidiaries (i) is in
violation of its charter or by-laws, (ii) is in default in any
material respect, and no event has occurred which, with notice or
lapse of time or both, would constitute such a default, in the due
performance or observance of any term, covenant or condition contained
in any material indenture, mortgage, deed of trust, loan agreement,
investor purchase or servicing agreement or other agreement or
instrument to which it is a party or by which it is bound or to which
any of its properties or assets is subject or (iii) is in violation in
any material respect of any law, ordinance, governmental rule,
regulation or court decree to which it or its properties or assets may
be subject or the rules and requirements of the Federal Home Loan
Mortgage Corporation, the Federal National Mortgage Association, the
Government National Mortgage Association, the Federal Housing
Authority or any other government agency or government-sponsored
enterprise in whose secondary market programs the Company and its
subsidiaries participate, or has failed to obtain any material
license, permit, certificate, franchise or other governmental
authorization or permit necessary to the ownership of its properties
or assets or to the conduct of its business.
(u) Neither the Company nor any subsidiary is, nor upon the sale
of the U.S. Stock as herein contemplated will be, an "investment
company" or an entity "controlled" by an "investment company" within
the meaning of such terms under the Investment Company Act of 1940, as
amended, and the rules and regulations of the Commission thereunder
(the "1940 Act").
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(v) Neither the Company nor any subsidiary has taken or will
take, directly or indirectly, any action which is designed to or which
has constituted or which might reasonably be expected to cause or
result in the stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of the shares
of the Stock.
2. Representations, Warranties and Agreements of the Selling
Stockholders. Each Selling Stockholder severally represents, warrants and agrees
that:
(a) Such Selling Stockholder has, and immediately prior to the
First Delivery Date (as defined in Section 5 hereof) such Selling
Stockholder will have, good and valid title to the shares of U.S.
Stock to be sold by such Selling Stockholder hereunder and to the
Stock to be sold by such Selling Stockholder under the International
Underwriting Agreement on such date, free and clear of all liens,
encumbrances, equities or claims; and upon delivery of such shares and
payment therefor pursuant hereto, good and valid title to such shares,
free and clear of all liens, encumbrances, equities or claims, will
pass to the several U.S. Underwriters and International Managers, as
the case may be.
(b) Such Selling Stockholder has placed in custody under a
custody agreement (the "Custody Agreement") with __________, as
custodian (the "Custodian"), for delivery under this Agreement,
certificates in negotiable form (with signature guaranteed by a
commercial bank or trust company having an office or correspondent in
the United States or a member firm of the New York or American Stock
Exchanges) representing the shares of U.S. Stock to be sold by such
Selling Stockholder hereunder.
(c) Such Selling Stockholder has duly and irrevocably executed
and delivered a power of attorney (the "Power of Attorney") appointing
the Custodian and one or more other persons, as attorneys-in-fact,
with full power of substitution, and with full authority (exercisable
by any one or more of them) to execute and deliver this Agreement and
the International Underwriting Agreement and to take such other action
as may be necessary or desirable to carry out the provisions hereof
and thereof on behalf of such Selling Stockholder.
(d) Such Selling Stockholder has full right, power and authority
to enter into this Agreement, the International Underwriting
Agreement, the Power of Attorney and the Custody Agreement; the
execution, delivery and performance of this Agreement, the
International Underwriting Agreement, the Power of Attorney and the
Custody Agreement by such Selling Stockholder and the consummation by
such Selling Stockholder of the transactions contemplated hereby and
thereby will not conflict with or result in a breach or violation of
any of the terms or provisions of, or constitute a default under, any
indenture, mortgage, deed of trust, loan agreement or other agreement
or instrument to which such Selling
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Stockholder is a party or by which such Selling Stockholder is bound
or to which any of the property or assets of such Selling Stockholder
is subject, other than such conflicts, breaches and violations as
would not adversely affect such Selling Stockholder's ability to
perform its obligations under this Agreement, the International
Underwriting Agreement, the Power of Attorney and the Custody
Agreement on a timely basis, nor will such actions result in any
violation of any statute or any order, rule or regulation of any court
or governmental agency or body having jurisdiction over such Selling
Stockholder or the property or assets of such Selling Stockholder;
and, except for the registration of the U.S. Stock and the Stock under
the Securities Act and the Exchange Act, such approvals as have been
obtained in connection with the approval of the quotation of the U.S.
Stock and the Stock on the Nasdaq National Market System and such
filings and registrations as may be required under applicable state
securities laws in connection with the purchase and distribution of
the U.S. Stock and the Stock by the U.S. Underwriters and the
International Managers, no consent, approval, authorization or order
of, or filing or registration with, any such court or governmental
agency or body is required for the execution, delivery and performance
of this Agreement, the International Underwriting Agreement, the Power
of Attorney or the Custody Agreement by such Selling Stockholder and
the consummation by such Selling Stockholder of the transactions
contemplated hereby and thereby.
(e) Such Selling Stockholder has not taken and will not take,
directly or indirectly, any action which is designed to or which has
constituted or which might reasonably be expected to cause or result
in the stabilization or manipulation of the price of any security of
the Company to facilitate the sale or resale of the shares of the U.S.
Stock or the Stock.
(f) Such Selling Stockholder is not prompted to sell the U.S.
Stock to be sold by such Selling Stockholder hereunder by any material
information concerning the Company or any of its subsidiaries which is
not set forth in the Prospectus.
3. Purchase of the U.S. Stock by the U.S. Underwriters. On the basis
of the representations and warranties contained in, and subject to the terms and
conditions of, this Agreement, the Company hereby agrees to sell _________
shares of the Firm U.S. Stock and each Selling Stockholder hereby agrees to sell
the number of shares of the Firm U.S. Stock set forth opposite his or her name
in Schedule 2 hereto, severally and not jointly, to the several U.S.
Underwriters, and each of the U.S. Underwriters, severally and not jointly,
agrees to purchase the number of shares of the Firm U.S. Stock set opposite that
U.S. Underwriter's name in Schedule 1 hereto. Each U.S. Underwriter shall be
obligated to purchase from the Company, and from each Selling Stockholder, that
number of shares of the Firm U.S. Stock which represents the same proportion of
the number of shares of the Firm U.S. Stock to be sold by the Company, and by
each Selling Stockholder, as the number of shares of the Firm U.S. Stock set
forth opposite
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the name of such U.S. Underwriter in Schedule 1 represents of the total number
of shares of the Firm U.S. Stock to be purchased by all of the U.S. Underwriters
pursuant to this Agreement. The respective purchase obligations of the U.S.
Underwriters with respect to the Firm U.S. Stock shall be rounded among the U.S.
Underwriters to avoid fractional shares, as the Representatives may determine.
In addition, the Company hereby grants to the U.S. Underwriters an
option to purchase up to _______ shares of Option U.S. Stock and the Selling
Stockholders collectively hereby grant to the U.S. Underwriters an option to
purchase up to an aggregate of _______ shares of Option Stock. Such options are
granted solely for the purpose of covering over-allotments in the sale of Firm
U.S. Stock and are exercisable as provided in Section 5 hereof. Shares of
Option U.S. Stock shall be sold severally by the Company and each Selling
Stockholder on a pro rata basis to the U.S. Underwriters. Each U.S. Underwriter
shall be obligated to purchase from the Company and from each Selling
Stockholder that number of shares of the Option U.S. Stock to be sold by such
party which represents the same proportion of the total number of shares of the
Option U.S. Stock to be sold by the Company and by the Selling Stockholders in
the aggregate as the number of shares of the Firm U.S. Stock set forth opposite
the name of such U.S. Underwriter in Schedule 1 represents of the total number
of shares of the Firm U.S. Stock to be purchased by all of the U.S. Underwriters
pursuant to this Agreement. The respective purchase obligations of the U.S.
Underwriters with respect to the Option U.S. Stock shall be rounded among the
U.S. Underwriters to avoid fractional shares, as the Representatives may
determine.
The price of both the Firm U.S. Stock and any Option U.S. Stock shall
be $_____ per share.
The Company and the Selling Stockholders shall not be obligated to
deliver any of the U.S. Stock to be delivered on the First Delivery Date or the
Second Delivery Date (each as hereinafter defined), as the case may be, except
upon payment for all the U.S. Stock to be purchased on such Delivery Date (as
hereinafter defined) as provided herein.
As compensation for their commitments hereunder, the U.S. Underwriters
shall receive, on the applicable Delivery Date, an amount equal to $___ per
share for all of the U.S. Stock to be delivered by the Company and the Selling
Stockholders hereunder on such Delivery Date, such amount to be paid on such
date to the Representatives, for the accounts of the several U.S. Underwriters,
fifty percent by the Company and fifty percent by the Selling Stockholders
(ratably in accordance with the number of shares of U.S. Stock being delivered
by each such Selling Stockholder on such Delivery Date).
4. Offering of U.S. Stock by the U.S. Underwriters.
Upon authorization by the Representatives of the release of the Firm
U.S. Stock, the several U.S. Underwriters propose to offer the Firm U.S. Stock
for sale upon the terms and conditions set forth in the U.S. Prospectus;
provided, however, that no U.S. Stock registered
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pursuant to the Rule 462(b) Registration Statement, if any, shall be offered
prior to the Effective Time thereof.
It is understood that ________ shares of the Firm U.S. Stock will
initially be reserved by the several U.S. Underwriters for offer and sale upon
the terms and conditions set forth in the U.S. Prospectus to employees and
persons having business relationships with the Company and its subsidiaries who
have heretofore delivered to the Representatives offers to purchase shares of
Firm U.S. Stock in form satisfactory to the Representatives, and that any
allocation of such Firm U.S. Stock among such persons will be made in accordance
with timely directions received by the Representatives from the Company;
provided, that under no circumstances will the Representatives or any U.S.
Underwriter be liable to the Company or to any such person for any action taken
or omitted in good faith in connection with such offering to employees and
persons having business relationships with the Company and its subsidiaries. It
is further understood that any shares of such Firm U.S. Stock which are not
purchased by such persons will be offered by the U.S. Underwriters to the public
upon the terms and conditions set forth in the U.S. Prospectus.
Each U.S. Underwriter agrees that, except to the extent permitted by
the Agreement Between U.S. Underwriters and International Managers, it will not
offer or sell any of the U.S. Stock outside the United States or Canada.
5. Delivery of and Payment for the Stock. Delivery of and payment
for the Firm U.S. Stock shall be made at the office of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ &
▇▇▇▇▇▇▇▇ at ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, at 10:00 A.M., New York
City time, on the third full business day following the date of this Agreement
or at such other date or place as shall be determined by agreement between the
Representatives and the Company. This date and time are sometimes referred to
as the "First Delivery Date." On the First Delivery Date, the Company and the
Selling Stockholders shall deliver or cause to be delivered certificates
representing the Firm U.S. Stock to the Representatives for the account of each
U.S. Underwriter against payment to or upon the order of the Company and the
Selling Stockholders of the purchase price (net of the commission provided for
in the last paragraph of Section 3) by certified or official bank check or
checks payable in immediately available (same-day) funds. Time shall be of the
essence, and delivery at the time and place specified pursuant to this Agreement
is a further condition of the obligation of each U.S. Underwriter hereunder.
Upon delivery, the Firm U.S. Stock shall be registered in such names and in such
denominations as the Representatives shall request in writing not less than two
full business days prior to the First Delivery Date. For the purpose of
expediting the checking and packaging of the certificates for the Firm Stock,
the Company and the Selling Stockholders shall make the certificates
representing the Firm U.S. Stock available for inspection by the Representatives
in New York, New York, not later than 2:00 P.M., New York City time, on the
business day prior to the First Delivery Date.
At any time on or before the thirtieth day after the date of this
Agreement the option granted in Section 3 may be exercised by written notice
being given to the Company and the Selling Stockholders by the Representatives.
Such notice shall set forth the aggregate number
12
of shares of Option U.S. Stock as to which the option is being exercised, the
names in which the shares of Option U.S. Stock are to be registered, the
denominations in which the shares of Option U.S. Stock are to be issued and the
date and time, as determined by the Representatives, when the shares of Option
U.S. Stock are to be delivered; provided, however, that this date and time shall
not be earlier than the First Delivery Date nor earlier than the second business
day after the date on which the option shall have been exercised nor later than
the fifth business day after the date on which the option shall have been
exercised. The date and time the shares of Option U.S. Stock are delivered are
sometimes referred to as the "Second Delivery Date" and the First Delivery Date
and the Second Delivery Date are sometimes each referred to as a "Delivery
Date".
Delivery of and payment for the Option U.S. Stock shall be made at the
place specified in the first sentence of the first paragraph of this Section 5
(or at such other place as shall be determined by agreement between the
Representatives and the Company) at 10:00 A.M., New York City time, on the
Second Delivery Date. On the Second Delivery Date, the Company and the Selling
Stockholders shall deliver or cause to be delivered the certificates
representing the Option U.S. Stock to the Representatives for the account of
each U.S. Underwriter against payment to or upon the order of the Company and
the Selling Stockholders, as the case may be, of the purchase price (net of the
commission provided for in the last paragraph of Section 3) by certified or
official bank check or checks payable in immediately available (same-day) funds.
Time shall be of the essence, and delivery at the time and place specified
pursuant to this Agreement is a further condition of the obligation of each U.S.
Underwriter hereunder. Upon delivery, the Option U.S. Stock shall be registered
in such names and in such denominations as the Representatives shall request in
the aforesaid written notice. For the purpose of expediting the checking and
packaging of the certificates for the Option Stock, the Company and the Selling
Stockholders shall make the certificates representing the Option U.S. Stock
available for inspection by the Representatives in New York, New York, not later
than 2:00 P.M., New York City time, on the business day prior to the Second
Delivery Date.
On each Delivery Date, the Company and the Selling Stockholders will
pay the commission payable on such Delivery Date to the U.S. Underwriters under
the last paragraph of Section 3. The Company and the Selling Stockholders
hereby authorize the Representatives, in order to effect such payment, to deduct
from the purchase price payable to the Company and the Selling Stockholders in
exchange for the U.S. Stock sold on such date an amount equal to such
commission, calculated in accordance with the last paragraph of Section 3.
6. Further Agreements of the Company. The Company agrees:
(a) To prepare the Rule 462(b) Registration Statement, if
necessary, in a form approved by the Representatives and to file such
Rule 462(b) Registration Statement with the Commission on the date
hereof; to prepare the Prospectus in a form approved by the
Representatives and to file such Prospectus pursuant to Rule 424(b)
under the Securities Act not later than 10:00 A.M., New York City
time, on the day following the execution and delivery of this
Agreement; to make no further amendment or any supplement to the
Registration Statements or to the
13
Prospectus except as permitted herein; to advise the Representatives,
promptly after it receives notice thereof, of the time when any
amendment to either Registration Statement has been filed or becomes
effective or any supplement to the Prospectus or any amended
Prospectus has been filed and to furnish the Representatives with
copies thereof; to advise the Representatives, promptly after it
receives notice thereof, of the issuance by the Commission of any stop
order or of any order preventing or suspending the use of any
Preliminary Prospectus or the Prospectus, of the suspension of the
qualification of the U.S. Stock for offering or sale in any
jurisdiction, of the initiation or threatening of any proceeding for
any such purpose, or of any request by the Commission for the amending
or supplementing of the Registration Statements or the Prospectus or
for additional information; and, in the event of the issuance of any
stop order or of any order preventing or suspending the use of any
Preliminary Prospectus or the Prospectus or suspending any such
qualification, to use promptly its best efforts to obtain its
withdrawal;
(b) To furnish promptly to the Representatives and to counsel
for the U.S. Underwriters a signed copy of each of the Registration
Statements as originally filed with the Commission, and each amendment
thereto filed with the Commission, including all consents and exhibits
filed therewith;
(c) To deliver promptly to the Representatives in New York City
such number of the following documents as the Representatives shall
request: (i) conformed copies of the Registration Statements as
originally filed with the Commission and each amendment thereto (in
each case excluding exhibits other than this Agreement and the
computation of per share earnings) and (ii) each Preliminary
Prospectus, the Prospectus (not later than 10:00 A.M., New York City
time, of the day following the execution and delivery of this
Agreement) and any amended or supplemented Prospectus (not later than
10:00 A.M., New York City time, on the day following the date of such
amendment or supplement); and, if the delivery of a prospectus is
required at any time after the Effective Time of the Primary
Registration Statement in connection with the offering or sale of the
U.S. Stock and if at such time any event shall have occurred as a
result of which the Prospectus as then amended or supplemented would
include any untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made when such
Prospectus is delivered, not misleading, or, if for any other reason
it shall be necessary to amend or supplement the Prospectus in order
to comply with the Securities Act, to notify the Representatives and,
upon their request, to prepare and furnish without charge to each U.S.
Underwriter and to any dealer in securities as many copies as the
Representatives may from time to time request of an amended or
supplemented Prospectus which will correct such statement or omission
or effect such compliance;
14
(d) To file promptly with the Commission any amendment to the
Registration Statements or the Prospectus or any supplement to the
Prospectus that may, in the judgment of the Company or the
Representatives, be required by the Securities Act or requested by the
Commission;
(e) Prior to filing with the Commission (i) any amendment to
either of the Registration Statements or supplement to the Prospectus
or (ii) any Prospectus pursuant to Rule 424 of the Rules and
Regulations, to furnish a copy thereof to the Representatives and
counsel for the U.S. Underwriters and obtain the consent of the
Representatives to any such filing;
(f) As soon as practicable after the Effective Date of the
Primary Registration Statement, to make generally available to the
Company's security holders and to deliver to the Representatives an
earnings statement of the Company and its subsidiaries (which need not
be audited) complying with Section 11(a) of the Securities Act and the
Rules and Regulations (including, at the option of the Company, Rule
158);
(g) For a period of five years following the Effective Date of
the Primary Registration Statement, to furnish to the Representatives
(i) copies of all materials furnished by the Company to its
shareholders and all public reports and all reports and financial
statements furnished by the Company to the principal national
securities exchange upon which the Common Stock may be listed pursuant
to requirements of or agreements with such exchange or to the
Commission pursuant to the Exchange Act or any rule or regulation of
the Commission thereunder, (ii) copies of the publicly available
reports filed by the Bank with the OTS and (iii) such other
information as the U.S. Underwriters may reasonably request regarding
the Company and/or its subsidiaries;
(h) Promptly from time to time to take such action as the
Representatives may reasonably request to qualify the U.S. Stock for
offering and sale under the securities laws of such jurisdictions as
the Representatives may request and to comply with such laws so as to
permit the continuance of sales and dealings therein in such
jurisdictions for as long as may be necessary to complete the
distribution of the Stock;
(i) For a period of 180 days from the date of the Prospectus,
not to, directly or indirectly, offer for sale, sell or otherwise
dispose of (or enter into any transaction or device which is designed
to, or could be expected to, result in the disposition or purchase by
any person at any time in the future of) any shares of Common Stock
(other than the U.S. Stock and shares issued pursuant to employee
benefit plans, qualified stock option plans or other employee
compensation plans existing on the date hereof, as described in the
Prospectus), or sell or grant options, rights or warrants with respect
to any shares of Common Stock (other
15
than the grant of options pursuant to option plans existing on the
date hereof, as described in the Prospectus), without the prior
written consent of ▇▇▇▇▇▇ Brothers Inc. ("▇▇▇▇▇▇ Brothers") on behalf
of the Representatives; and to cause each officer and director of the
Company to furnish to the Representatives, prior to the First Delivery
Date, a letter or letters, in form and substance satisfactory to
counsel for the U.S. Underwriters, pursuant to which each such person
shall agree not to, directly or indirectly, offer for sale, sell or
otherwise dispose of (or enter into any transaction or device which is
designed to, or could be expected to, result in the disposition or
purchase by any person at any time in the future of) any shares of
Common Stock for a period of 180 days from the date of the Prospectus,
without the prior written consent of ▇▇▇▇▇▇ Brothers on behalf of the
Representatives;
(j) Prior to filing with the Commission any reports on Form SR
pursuant to Rule 463 of the Rules and Regulations, to furnish a copy
thereof to the counsel for the U.S. Underwriters and receive and
consider its comments thereon, and to deliver promptly to the
Representatives a signed copy of each report on Form SR filed by it
with the Commission;
(k) To apply the net proceeds from the sale of the U.S. Stock
being sold by the Company as set forth in the Prospectus; and
(l) To take such steps as shall be necessary to ensure that
neither the Company nor any subsidiary thereof shall become an
"investment company" or an entity "controlled" by an "investment
company" within the meaning of such terms under the 1940 Act.
7. Further Agreements of the Selling Stockholders. Each Selling
Stockholder agrees:
(a) For a period of 180 days from the date of the Prospectus,
not to, directly or indirectly, offer for sale, sell or otherwise
dispose of (or enter into any transaction or device which is designed
to, or could be expected to, result in the disposition or purchase by
any person at any time in the future of) any shares of Common U.S.
Stock (other than the U.S. Stock and the Stock), without the prior
written consent of ▇▇▇▇▇▇ Brothers on behalf of the Representatives
and the Lead Managers.
(b) That the U.S. Stock to be sold by such Selling Stockholder
hereunder, and the Stock to be sold by such Selling Stockholder under
the International Underwriting Agreement which is represented by the
certificates held in custody for such Selling Stockholder, is subject
to the interest of the U.S. Underwriters and the International
Managers and the other Selling Stockholders thereunder, that the
arrangements made by such Selling Stockholder for such custody are to
that
16
extent irrevocable, and that the obligations of such Selling
Stockholder hereunder and under the International Underwriting
Agreement shall not be terminated by any act of such Selling
Stockholder, by operation of law, by the death or incapacity of any
individual Selling Stockholder or, in the case of a trust, by the
death or incapacity of any executor or trustee or the termination of
such trust, or the occurrence of any other event.
(c) To deliver to the Representatives prior to the First
Delivery Date a properly completed and executed United States Treasury
Department Form W-8 (if such Selling Stockholder is a non-United
States person) or Form W-9 (if such Selling Stockholder is a United
States person.)
8. Expenses. The Company agrees to pay, in addition to the
commissions specified in the last paragraph of Section 3, (a) the costs incident
to the authorization, issuance, sale and delivery of the U.S. Stock to the U.S.
Underwriters and any taxes payable in that connection; (b) the costs incident to
the preparation, printing and filing under the Securities Act of the
Registration Statements and any amendments and exhibits thereto; (c) the costs
of distributing the Registration Statements as originally filed and each
amendment thereto and any post-effective amendments thereto (including, in each
case, exhibits), any Preliminary Prospectus, the International Prospectus and
the U.S. Prospectus and any amendment or supplement to the International
Prospectus and the U.S. Prospectus, all as provided in this Agreement and the
International Underwriting Agreement; (d) the costs of reproducing and
distributing this Agreement, the International Underwriting Agreement, the
Agreement Between U.S. Underwriters and International Managers, the Agreement
Among International Managers and the Supplemental Agreement Among U.S.
Underwriters; (e) the costs of distributing the terms of agreement relating to
the organization of the underwriting syndicate and selling group to the members
thereof by mail, telex or other means of communication; (f) the costs of
delivering and distributing the Custody Agreement and the Power of Attorney; (g)
the filing fees incident to securing any required review by the National
Association of Securities Dealers, Inc. of the terms of sale of the U.S. Stock
and the Stock; (h) any applicable listing or other fees; (i) the fees and
expenses of qualifying the U.S. Stock under the securities laws of the several
jurisdictions as provided in Section 6 and of preparing, printing and
distributing a Blue Sky Memorandum (including related fees and expenses of
counsel to the U.S. Underwriters); (j) all costs and expenses of the U.S.
Underwriters, including the fees and disbursements of counsel for the U.S.
Underwriters, incident to the offer and sale of shares of the U.S. Stock by the
U.S. Underwriters to employees and persons having business relationships with
the Company and its subsidiaries, as described in Section 4; and (k) all other
costs and expenses incident to the performance of the obligations of the Company
and the Selling Stockholders under this Agreement; provided that, except as
provided in this Section 8 and in Section 13, the U.S. Underwriters shall pay
their own costs and expenses, including the costs and expenses of their counsel,
any transfer taxes on the U.S. Stock which they may sell and the expenses of
advertising any offering of the U.S. Stock made by the U.S. Underwriters.
17
9. Conditions of U.S. Underwriters' Obligations. The respective
obligations of the U.S. Underwriters hereunder are subject to the accuracy, when
made and on each Delivery Date, of the representations and warranties of the
Company and the Selling Stockholders contained herein, to the performance by the
Company and the Selling Stockholders of their respective obligations hereunder,
and to each of the following additional terms and conditions:
(a) The Rule 462(b) Registration Statement, if any, and the
Prospectus shall have been timely filed with the Commission in
accordance with Section 6; no stop order suspending the effectiveness
of either of the Registration Statements or any part thereof shall
have been issued and no proceeding for that purpose shall have been
initiated or threatened by the Commission; and any request of the
Commission for inclusion of additional information in either of the
Registration Statements or the Prospectus or otherwise shall have been
complied with.
(b) No U.S. Underwriter or International Manager shall have
discovered and disclosed to the Company on or prior to such Delivery
Date that either of the Registration Statements or the Prospectus or
any amendment or supplement thereto contains any untrue statement of a
fact which, in the opinion of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, counsel for
the U.S. Underwriters and the International Managers, is material or
omits to state any fact which, in the opinion of such counsel, is
material and is required to be stated therein or is necessary to made
the statements therein not misleading.
(c) All corporate proceedings and other legal matters incident
to the authorization, form and validity of this Agreement, the
International Underwriting Agreement, the Custody Agreement, the Power
of Attorney, the U.S. Stock, the Stock, the Registration Statements
and the Prospectus, and all other legal matters relating to this
Agreement and the International Underwriting Agreement and the
transactions contemplated hereby and thereby shall be satisfactory in
all respects to counsel for the U.S. Underwriters and the
International Managers, and the Company and the Selling Stockholders
shall have furnished to such counsel all documents and information
that they may reasonably request to enable them to pass upon such
matters.
(d) Reinhart, Boerner, Van Deuren, ▇▇▇▇▇▇ & Rieselbach, P.C.
shall have furnished to the Representatives its written opinion, as
counsel to the Company and the Selling Stockholders, addressed to the
U.S. Underwriters and dated such Delivery Date, in form and substance
satisfactory to the Representatives, to the effect that:
(i) The Company is duly registered as a savings and loan
holding company under HOLA;
18
(ii) The Bank has been duly chartered and is validly
existing as a federal stock savings bank under the laws of the
United States of America, with full corporate power and authority
necessary to own or hold its properties and conduct the
businesses in which it is engaged, and is a member of the Federal
Home Loan Bank of Indianapolis;
(iii) This Agreement and the International Underwriting
Agreement each has been duly authorized, executed and delivered
by the Company and has been duly executed and delivered by or on
behalf of each Selling Stockholder;
(iv) The Company has an authorized capitalization as set
forth in the Prospectus, and all of the issued shares of capital
stock of the Company (including the shares of U.S. Stock and
Stock being delivered on such Delivery Date) have been duly and
validly authorized and issued, are fully paid and non-assessable
and conform to the description thereof contained in the
Prospectus; and all of the issued shares of capital stock of the
Bank and each other subsidiary of the Company have been duly and
validly authorized and issued and are fully paid, non-assessable
and (except for directors' qualifying shares) are owned directly
or indirectly by the Company, free and clear of all liens,
encumbrances, equities or claims;
(v) The Primary Registration Statement was declared
effective under the Securities Act as of the date and time
specified in such opinion, the Rule 462(b) Registration
Statement, if any, was filed with the Commission on the date
specified therein, the Prospectus was filed with the Commission
pursuant to the subparagraph of Rule 424(b) of the Rules and
Regulations specified in such opinion on the date specified
therein and no stop order suspending the effectiveness of either
of the Registration Statements has been issued and, to the
knowledge of such counsel, no proceeding for that purpose is
pending or threatened by the Commission;
(vi) The Registration Statements, as of their respective
Effective Dates, and the Prospectus, as of its date, and any
further amendments or supplements thereto, as of their respective
dates, made by the Company prior to such Delivery Date (other
than the financial statements and other financial data contained
therein, as to which such counsel need express no opinion)
complied as to form in all material respects with the
requirements of the Securities Act and the Rules and Regulations;
(vii) The issue and sale of the shares of U.S. Stock and
Stock being delivered on such Delivery Date by the Company and
the compliance by the Company with all of the provisions of this
Agreement and the International Underwriting Agreement and the
consummation of
19
the transactions contemplated hereby will not conflict with or
result in a breach or violation of any of the terms or provisions
of, or constitute a default under, any indenture, mortgage, deed
of trust, loan agreement or other agreement or instrument known
to such counsel to which the Company or any of its subsidiaries
is a party or by which the Company or any of its subsidiaries is
bound or to which any of the properties or assets of the Company
or any of its subsidiaries is subject, nor will such actions
result in any violation of the provisions of the charter or by-
laws of the Company or any of its subsidiaries or any statute or
any order, rule or regulation known to such counsel of any court
or governmental agency or body having jurisdiction over the
Company or any of its subsidiaries or any of their properties or
assets (including, without limitation, HOLA and the rules and
regulations of the OTS thereunder); and, except for the
registration of the U.S. Stock and the Stock under the Securities
Act and the Exchange Act and such filings and registrations as
may be required under applicable state securities laws in
connection with the purchase and distribution of the U.S. Stock
and the Stock by the U.S. Underwriters and the International
Managers, no consent, approval, authorization or order of, or
filing or registration with, any such court or governmental
agency or body is required for the execution, delivery and
performance of this Agreement by the Company and the consummation
of the transactions contemplated hereby;
(viii) Each Selling Stockholder has full right, power and
authority to enter into this Agreement and the International
Underwriting Agreement, the Power of Attorney and the Custody
Agreement; the Power of Attorney and the Custody Agreement have
been duly executed and delivered by each Selling Stockholder and
constitute valid and binding agreements of each Selling
Stockholder; the execution, delivery and performance of this
Agreement, the International Underwriting Agreement, the Power of
Attorney and the Custody Agreement by each Selling Stockholder
and the consummation by each Selling Stockholder of the
transactions contemplated hereby and thereby will not conflict
with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any indenture,
mortgage, deed of trust, loan agreement or other agreement or
instrument known to such counsel to which any Selling Stockholder
is a party or by which any Selling Stockholder is bound or to
which any of the property or assets of any Selling Stockholder is
subject, nor will such actions result in any violation of any
statute or any order, rule or regulation known to such counsel of
any court or governmental agency or body having jurisdiction over
any Selling Stockholder or the property or assets of any Selling
Stockholder (including, without limitation, HOLA and the rules
and regulations of the OTS, as applicable); and, except for the
registration of the U.S. Stock and the Stock under the
20
Securities Act and the Exchange Act and such filings and
registrations as may be required under applicable state
securities laws in connection with the purchase and distribution
of the U.S. Stock and the Stock by the U.S. Underwriters and the
International Managers, no consent, approval, authorization or
order of, or filing or registration with, any such court or
governmental agency or body is required for the execution,
delivery and performance of this Agreement, the International
Underwriting Agreement, the Power of Attorney or the Custody
Agreement by any Selling Stockholder and the consummation by any
Selling Stockholder of the transactions contemplated hereby and
thereby;
(ix) There are no preemptive or other rights to
subscribe for or to purchase, nor any restriction upon the voting
or transfer of, any shares of the U.S. Stock or Stock pursuant to
the Company's charter or by-laws or any agreement or other
instrument known to such counsel;
(x) To the best of such counsel's knowledge and other
than as set forth in the Prospectus, there are no legal or
governmental proceedings pending to which the Company or any of
its subsidiaries is a party or of which any property or asset of
the Company or any of its subsidiaries is the subject which might
have a material adverse effect on the consolidated financial
position, stockholders' equity, results of operations, business
or prospects of the Company and its subsidiaries; and, to the
best of such counsel's knowledge, no such proceedings are
threatened or contemplated by governmental authorities or
threatened by others;
(xi) To the best of such counsel's knowledge, there are
no contracts or other documents which are required to be
described in the Prospectus or filed as exhibits to the
Registration Statements by the Securities Act or by the Rules and
Regulations which have not been described or filed as exhibits to
the Registration Statements or incorporated therein by reference
as permitted by the Rules and Regulations;
(xii) The savings accounts of depositors in the Bank are
insured by the FDIC to the fullest extent permitted by law and
the rules and regulations of the FDIC, and no proceedings for the
termination of such insurance are pending, or to such counsel's
knowledge, threatened;
(xiii) To the best of such counsel's knowledge, neither
the Company nor any of its subsidiaries is a party to any written
agreement or memorandum of understanding with, or a party to any
commitment letter or similar undertaking to, or is subject to any
order or directive by, or is a recipient of any extraordinary
supervisory letter from, or has adopted any board resolutions at
the request of, the OTS, the FDIC or any other
21
government authority or agency responsible for the supervision,
regulation or insurance of depository institutions or their
holding companies which restricts materially the conduct of its
business, or in any manner relates to its capital adequacy (other
than as described in the Prospectus), its credit policies or its
management, nor have any of them been advised by the OTS, the
FDIC or any such other government authority or agency that it is
contemplating issuing or requesting (or is considering the
appropriateness of issuing or requesting) any such order, decree,
agreement, memorandum of understanding, extraordinary supervisory
letter, commitment letter or similar submission, or any such
board resolutions;
(xiv) The form of certificate used to evidence the U.S.
Stock complies in all material respects with all applicable
statutory requirements, with any applicable requirements of the
articles of incorporation and by-laws of the Company and the
requirements of the Nasdaq National Market;
(xv) [Except as described in the Prospectus,] to the
best of such counsel's knowledge, there are no contracts,
agreements or understandings between the Company and any person
granting such person the right to require the Company to file a
registration statement under the Securities Act with respect to
any securities of the Company owned or to be owned by such person
or to require the Company to include such securities in the
securities registered pursuant to the Registration Statements or
in any securities being registered pursuant to any other
registration statement filed by the Company under the Securities
Act;
(xvi) Neither the Company nor any subsidiary thereof is
an "investment company" or an entity "controlled" by an
"investment company" within the meaning of such terms under the
1940 Act; and
(xvii) Upon payment for, and delivery of, the shares of
U.S. Stock to be sold by each Selling Stockholder under this
Agreement in accordance with the terms hereof, the U.S.
Underwriters will acquire all of the rights of each Selling
Stockholder in such shares and will also acquire the interest of
each Selling Stockholder in such shares free of any adverse claim
(within the meaning of the Uniform Commercial Code).
In rendering such opinion, such counsel may (i) state that its opinion
is limited to matters governed by the Federal laws of the United
States of America [and the laws of _________] and that such counsel is
not admitted in the State of Michigan, (ii) insofar as such opinion
relates to or is dependent on matters governed by the laws of the
State of Michigan, rely on the opinion of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.,
General Counsel of the Company, referred to in Section 9(e) below and
(iii) in rendering the opinion in Section 9(d)(xvii) above, rely upon
a
22
certificate of each Selling Stockholder in respect of matters of fact
as to ownership of, and the absence of adverse claims regarding, the
shares of U.S. Stock sold by such Selling Stockholder, provided that
such counsel shall furnish copies thereof to the Representatives and
state that it believes that both the U.S. Underwriters and it are
justified in relying upon such certificate. Such counsel shall also
have furnished to the Representatives a written statement, addressed
to the U.S. Underwriters and dated such Delivery Date, in form and
substance satisfactory to the Representatives, to the effect that (x)
such counsel has acted as counsel to the Company on a regular basis
(although the Company is also represented by its General Counsel and,
with respect to certain other matters, by other outside counsel) and
has acted as counsel to the Company and the Selling Stockholders in
connection with the preparation of the Registration Statements, and
(y) based on the foregoing, no facts have come to the attention of
such counsel which lead it to believe that the Registration
Statements, as of their respective Effective Dates, contained any
untrue statement of a material fact or omitted to state any material
fact required to be stated therein or necessary in order to make the
statements therein not misleading, or that the Prospectus contains any
untrue statement of a material fact or omits 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. The foregoing opinion and statement may be
qualified by a statement to the effect that such counsel does not
assume any responsibility for the accuracy, completeness or fairness
of the statements contained in the Registration Statements or the
Prospectus except for the statements made in the Prospectus under the
caption "Description of Capital Stock", insofar as such statements
relate to the U.S. Stock and concern legal matters.
(e) ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq., General Counsel of the Company,
shall have furnished to the Representatives his written opinion,
addressed to the U.S. Underwriters and dated such Delivery Date, in
form and substance satisfactory to the Representatives, to the effect
that:
(i) This Agreement and the International Underwriting
Agreement each has been duly authorized, executed and delivered
by the Company;
(ii) The Company has an authorized capitalization as set
forth in the Prospectus, and all of the issued shares of capital
stock of the Company (including the shares of U.S. Stock and the
Stock being delivered on such Delivery Date) have been duly and
validly authorized and issued, are fully paid and non-assessable
and conform to the description thereof contained in the
Prospectus; and all of the issued shares of capital stock of the
Bank and each other subsidiary of the Company have been duly and
validly authorized and issued and are fully paid, non-
23
assessable and (except for directors' qualifying shares) are
owned directly or indirectly by the Company, free and clear of
all liens, encumbrances, equities or claims;
(iii) The Company and each of its subsidiaries (other
than the Bank) have been duly incorporated and are validly
existing as corporations in good standing under the laws of their
respective jurisdictions of incorporation, are duly qualified to
do business and are in good standing as foreign corporations in
each jurisdiction in which their respective ownership or lease of
property or the conduct of their respective businesses requires
such qualification (other than those jurisdictions in which the
failure to so qualify would not have a material adverse effect on
the Company or the Company and its subsidiaries taken as a
whole), and have all power and authority necessary to own or hold
their respective properties and conduct the businesses in which
they are engaged;
(iv) The issue and sale of the shares of U.S. Stock and
Stock being delivered on such Delivery Date by the Company and
the compliance by the Company with all of the provisions of this
Agreement and the International Underwriting Agreement and the
consummation of the transactions contemplated hereby will not
conflict with or result in a breach or violation of any of the
terms or provisions of, or constitute a default under, any
indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument known to such counsel to which the
Company or any of its subsidiaries is a party or by which the
Company or any of its subsidiaries is bound or to which any of
the properties or assets of the Company or any of its
subsidiaries is subject, nor will such actions result in any
violation of the provisions of the charter or by-laws of the
Company or any of its subsidiaries or any statute or any order,
rule or regulation known to such counsel of any court or
governmental agency or body having jurisdiction over the Company
or any of its subsidiaries or any of their properties or assets
(including, without limitation, HOLA and the rules and
regulations of the OTS); and, except for the registration of the
U.S. Stock and the Stock under the Securities Act and such
consents, approvals, authorizations, registrations or
qualifications as may be required under the Exchange Act and
applicable state securities laws in connection with the purchase
and distribution of the U.S. Stock and the Stock by the U.S.
Underwriters and the International Managers, no consent,
approval, authorization or order of, or filing or registration
with, any such court or governmental agency or body is required
for the execution, delivery and performance of this Agreement by
the Company and the consummation of the transactions contemplated
hereby;
24
(v) There are no preemptive or other rights to
subscribe for or to purchase, nor any restriction upon the voting
or transfer of, any shares of the U.S. Stock or the Stock
pursuant to the Company's charter or by-laws or any agreement or
other instrument known to such counsel;
(vi) To the best of such counsel's knowledge and other
than as set forth in the Prospectus, there are no legal or
governmental proceedings pending to which the Company or any of
its subsidiaries is a party or of which any property or asset of
the Company or any of its subsidiaries is the subject which, if
determined adversely to the Company or any of its subsidiaries,
might have a material adverse effect on the consolidated
financial position, stockholders' equity, results of operations,
business or prospects of the Company and its subsidiaries; and,
to the best of such counsel's knowledge, no such proceedings are
threatened or contemplated by governmental authorities or
threatened by others;
(vii) To the best of such counsel's knowledge, neither
the Company nor any of its subsidiaries is party to or otherwise
the subject of any consent decree, memorandum of understanding,
written agreement or similar supervisory or enforcement agreement
or understanding with the OTS, the FDIC or any other government
authority or agency responsible for the supervision, regulation
or insurance of depository institutions or their holding
companies; and
(viii) The form of certificate used to evidence the U.S.
Stock complies in all material respects with all applicable
statutory requirements, with any applicable requirements of the
articles of incorporation and by-laws of the Company.
In rendering such opinion, such counsel may state that his opinion is
limited to matters governed by the laws of the State of Michigan.
Such counsel shall also have furnished to the Representatives a
written statement, addressed to the U.S. Underwriters and dated such
Delivery Date, in form and substance satisfactory to the
Representatives, to the effect that (x) such counsel is General
Counsel to the Company and, as such, has acted as counsel to the
Company in connection with the preparation of the Registration
Statements, and (y) based on the foregoing, no facts have come to the
attention of such counsel which lead him to believe that the
Registration Statements, as of their respective Effective Dates,
contained any untrue statement of a material fact or omitted to state
any material fact required to be stated therein or necessary in order
to make the statements therein not misleading, or that the Prospectus
contains any untrue statement of a material fact or omits 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. The foregoing opinion and statement
may be
25
qualified by a statement to the effect that such counsel does not
assume any responsibility for the accuracy, completeness or fairness
of the statements contained in the Registration Statements or the
Prospectus.
(f) With respect to the letter of ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP delivered
to the Representatives concurrently with the execution of this
Agreement (the "initial letter"), the Company shall have furnished to
the Representatives a letter (the "bring-down letter") of such
accountants, addressed to the U.S. Underwriters and dated such
Delivery Date (i) confirming that they are independent public
accountants within the meaning of the Securities Act and are in
compliance with the applicable requirements relating to the
qualification of accountants under Rule 2-01 of Regulation S-X of the
Commission, (ii) stating, as of the date of the bring-down letter (or,
with respect to matters involving changes or developments since the
respective dates as of which specified financial information is given
in the Prospectus, as of a date not more than five days prior to the
date of the bring-down letter), the conclusions and findings of such
firm with respect to the financial information and other matters
covered by the initial letter and (iii) confirming in all material
respects the conclusions and findings set forth in the initial letter.
(g) The Company shall have furnished to the Representatives a
certificate, dated such Delivery Date, of its Chairman of the Board
and Chief Executive Officer and its Chief Financial Officer stating
that:
(i) The representations, warranties and agreements of the
Company in Section 1 are true and correct as of such Delivery
Date; the Company has complied with all its agreements contained
herein; and the conditions set forth in Section 9(a) have been
fulfilled;
(ii) (A) Neither the Company nor any of its subsidiaries
has sustained since the date of the latest audited financial
statements included in the Prospectus any loss or interference
with its business from fire, explosion, flood or other calamity,
whether or not covered by insurance, or from any labor dispute or
court or governmental action, order or decree, otherwise than as
set forth or contemplated in the Prospectus and (B) since such
date there has not been any change in the capital stock or long-
term debt of the Company or any of its subsidiaries or any
material adverse change, or any development involving a
prospective material adverse change, in or affecting the general
affairs, management, financial position, stockholders' equity or
results of operations of the Company and its subsidiaries, other
than as set forth or contemplated in the Prospectus; and
(iii) They have carefully examined the Registration
Statements and the Prospectus and, in their opinion, (A) the
Registration Statements, as of
26
their respective Effective Dates, and the Prospectus, as of each
of the Effective Dates, did not include any untrue statement of a
material fact and did not omit to state any material fact
required to be stated therein or necessary to make the statements
therein not misleading, and (B) since the Effective Date of the
Primary Registration Statement, no event has occurred which
should have been set forth in a supplement or amendment to either
of the Registration Statements or the Prospectus.
(h) Each Selling Stockholder (or the Custodian or one or more
attorneys-in-fact on behalf of such Selling Stockholder) shall have
furnished to the Representatives on such Delivery Date a certificate,
dated such Delivery Date, signed by, or on behalf of, such Selling
Stockholder (or the Custodian or one or more such attorneys-in-fact)
stating that the representations, warranties and agreements of such
Selling Stockholder contained herein are true and correct as of such
Delivery Date and that such Selling Stockholder has complied with all
agreements contained herein to be performed by such Selling
Stockholder at or prior to such Delivery Date.
(i) (i) Neither the Company nor any of its subsidiaries shall
have sustained since the date of the latest audited financial
statements included in the Prospectus any loss or interference with
its business from fire, explosion, flood or other calamity, whether or
not covered by insurance, or from any labor dispute or court or
governmental action, order or decree, otherwise than as set forth or
contemplated in the Prospectus or (ii) since such date there shall not
have been any change in the capital stock or long-term debt of the
Company or any of its subsidiaries or any change, or any development
involving a prospective change, in or affecting the general affairs,
management, financial position, stockholders' equity or results of
operations of the Company and its subsidiaries, other than as set
forth or contemplated in the Prospectus, the effect of which, in any
such case described in clause (i) or (ii), is, in the judgment of the
Representatives, so material and adverse as to make it impracticable
or inadvisable to proceed with the public offering or the delivery of
the U.S. Stock being delivered on such Delivery Date on the terms and
in the manner contemplated in the Prospectus.
(j) Subsequent to the execution and delivery of this Agreement
there shall not have occurred any of the following: (i) trading in
securities generally on the New York Stock Exchange or the American
Stock Exchange or in the over-the-counter market, or trading in any
securities of the Company on any exchange or in the over-the-counter
market, shall have been suspended or minimum prices shall have been
established on any such exchange or such market by the Commission, by
such exchange or by any other regulatory body or governmental
authority having jurisdiction, (ii) a banking moratorium shall have
been declared by Federal authorities or authorities in the State of
Michigan, (iii) the United States shall have become engaged in
hostilities, there shall have been an escalation in hostilities
27
involving the United States or there shall have been a declaration of
a national emergency or war by the United States or (iv) there shall
have occurred such a material adverse change in general economic,
political or financial conditions (or the effect of international
conditions on the financial markets in the United States shall be
such) as to make it, in the judgment of a majority in interest of the
several U.S. Underwriters, impracticable or inadvisable to proceed
with the public offering or delivery of the U.S. Stock being delivered
on such Delivery Date on the terms and in the manner contemplated in
the Prospectus.
(k) The Nasdaq National Market System shall have approved the
U.S. Stock for listing, subject only to official notice of issuance
and evidence of satisfactory distribution.
(l) The closing under the International Underwriting Agreement shall
have occurred concurrently with the closing hereunder on such Delivery Date.
All opinions, letters, evidence and certificates mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if they are in form and substance satisfactory to counsel
for the U.S. Underwriters and the International Managers.
10. Indemnification and Contribution.
(a) The Company and the Bank (subject to Section 10(g) below), jointly
and severally, shall indemnify and hold harmless each Underwriter, its officers
and employees and each person, if any, who controls any U.S. Underwriter within
the meaning of the Securities Act, from and against any loss, claim, damage or
liability, joint or several, or any action in respect thereof (including, but
not limited to, any loss, claim, damage, liability or action relating to
purchases and sales of Stock), to which that U.S. Underwriter, officer, employee
or controlling person may become subject, under the Securities Act or otherwise,
insofar as such loss, claim, damage, liability or action arises out of, or is
based upon, (i) any untrue statement or alleged untrue statement of a material
fact contained in any Preliminary Prospectus, either of the Registration
Statements or the Prospectus, or in any amendment or supplement thereto, (ii)
the omission or alleged omission to state in any Preliminary Prospectus, either
of the Registration Statements or the Prospectus, or in any amendment or
supplement thereto, any material fact required to be stated therein or necessary
to make the statements therein not misleading or (iii) any act or failure to
act, or any alleged act or failure to act, by any U.S. Underwriter in connection
with, or relating in any manner to, the U.S. Stock or the offering contemplated
hereby, and which is included as part of or referred to in any loss, claim,
damage, liability or action arising out of or based upon matters covered by
clause (i) or (ii) above (provided that the Company and the Bank shall not be
liable in the case of any matter covered by this clause (iii) to the extent that
it is determined in a final judgment by a court of competent jurisdiction that
such loss, claim, damage, liability or action resulted directly from any such
act or failure to act undertaken or omitted to be taken by such U.S. Underwriter
through its gross negligence or
28
wilful misconduct), and shall reimburse each U.S. Underwriter and each such
officer, employee and controlling person promptly upon demand for any legal or
other expenses reasonably incurred by that U.S. Underwriter, officer, employee
or controlling person in connection with investigating or defending or preparing
to defend against any such loss, claim, damage, liability or action as such
expenses are incurred; provided, however, that the Company and the Bank shall
not be liable in any such case to the extent that any such loss, claim, damage,
liability or action arises out of, or is based upon, any untrue statement or
alleged untrue statement or omission or alleged omission made in any Preliminary
Prospectus, the Registration Statement or the Prospectus, or in any such
amendment or supplement, in reliance upon and in conformity with the written
information furnished to the Company through the Representatives by or on behalf
of any U.S. Underwriter specifically for inclusion therein and described in
Section 10; and provided further that as to any Preliminary Prospectus this
indemnity agreement shall not inure to the benefit of any U.S. Underwriter, its
officers or employees or any person controlling that U.S. Underwriter on account
of any loss, claim, damage, liability or action arising from the sale of U.S.
Stock to any person by that U.S. Underwriter if that U.S. Underwriter failed to
send or give a copy of the Prospectus, as the same may be amended or
supplemented, to that person within the time required by the Securities Act, and
the untrue statement or alleged untrue statement of any material fact or
omission or alleged omission to state a material fact in such Preliminary
Prospectus was corrected in the Prospectus, unless such failure resulted from
non-compliance by the Company with Section 6. The foregoing indemnity
agreement is in addition to any liability which the Company and/or the Bank may
otherwise have to any U.S. Underwriter or to any officer, employee or
controlling person of that U.S. Underwriter.
(b) The Selling Stockholders, jointly and severally, shall indemnify
and hold harmless each U.S. Underwriter, its officers and employees and each
person, if any, who controls any U.S. Underwriter within the meaning of the
Securities Act, from and against any loss, claim, damage or liability, joint or
several, or any action in respect thereof (including, but not limited to, any
loss, claim, damage, liability or action relating to purchases and sales of
Stock), to which that U.S. Underwriter, officer, employee or controlling person
may become subject, under the Securities Act or otherwise, insofar as such loss,
claim, damage, liability or action arises out of, or is based upon, (i) any
untrue statement or alleged untrue statement of a material fact contained in any
Preliminary Prospectus, either of the Registration Statements or the Prospectus,
or in any amendment or supplement thereto, or (ii) the omission or alleged
omission to state in any Preliminary Prospectus, either of the Registration
Statements or the Prospectus, or in any amendment or supplement thereto, any
material fact required to be stated therein or necessary to make the statements
therein not misleading, and shall reimburse each U.S. Underwriter, its officers
and employees and each such controlling person for any legal or other expenses
reasonably incurred by that U.S. Underwriter, its officers, employees or
controlling person in connection with investigating or defending or preparing to
defend against any such loss, claim, damage, liability or action as such
expenses are incurred; provided, however, that the Selling Stockholders shall
not be liable in any such case to the extent that any such loss, claim, damage,
liability or action arises out of, or is based upon, any untrue statement or
alleged untrue statement or omission or alleged omission made in any Preliminary
Prospectus, either of the Registration Statements or the Prospectus or in any
such amendment or supplement in reliance upon and in
29
conformity with written information furnished to the Company through the
Representatives by or on behalf of any U.S. Underwriter specifically for
inclusion therein; and provided further, that as to any Preliminary Prospectus
this indemnity agreement shall not inure to the benefit of any U.S. Underwriter,
its officers or employees or any person controlling that U.S. Underwriter on
account of any loss, claim, damage, liability or action arising from the sale of
U.S. Stock to any person by that U.S. Underwriter if that U.S. Underwriter
failed to send or give a copy of the Prospectus, as the same may be amended or
supplemented, to that person within the time required by the Securities Act, and
the untrue statement or alleged untrue statement of a material fact or omission
or alleged omission to state a material fact in such Preliminary Prospectus was
corrected in the Prospectus, unless such failure resulted from non-compliance by
the Company with Section 6; and provided still further, that the aggregate
liability of each Selling Stockholder under this Section 10(b) shall not exceed
the amount of net proceeds received by such Selling Stockholder from the U.S.
Stock and the Stock sold by it pursuant to this Agreement and the International
Underwriting Agreement. The foregoing indemnity agreement is in addition to any
liability which the Selling Stockholders may otherwise have to any U.S.
Underwriter or any officer, employee or controlling person of that U.S.
Underwriter.
(c) Each U.S. Underwriter, severally and not jointly, shall indemnify
and hold harmless the Company, its officers and employees, each of its directors
and each person, if any, who controls the Company within the meaning of the
Securities Act, from and against any loss, claim, damage or liability, joint or
several, or any action in respect thereof, to which the Company or any such
director, officer or controlling person may become subject, under the Securities
Act or otherwise, insofar as such loss, claim, damage, liability or action
arises out of, or is based upon, (i) any untrue statement or alleged untrue
statement of a material fact contained in any Preliminary Prospectus, either of
the Registration Statements or the Prospectus, or in any amendment or supplement
thereto, or (ii) the omission or alleged omission to state in any Preliminary
Prospectus, either of the Registration Statements or the Prospectus, or in any
amendment or supplement thereto, any material fact required to be stated therein
or necessary to make the statements therein not misleading, but in each case
only to the extent that the untrue statement or alleged untrue statement or
omission or alleged omission was made in reliance upon and in conformity with
the written information furnished to the Company through the Representatives by
or on behalf of that U.S. Underwriter specifically for inclusion therein and
described in Section 10, and shall reimburse the Company and any such director,
officer or controlling person for any legal or other expenses reasonably
incurred by the Company or any such director, officer or controlling person in
connection with investigating or defending or preparing to defend against any
such loss, claim, damage, liability or action as such expenses are incurred.
The foregoing indemnity agreement is in addition to any liability which any U.S.
Underwriter may otherwise have to the Company or any such director, officer or
controlling person.
(d) Promptly after receipt by an indemnified party under this Section
10 of notice of any claim or the commencement of any action, the indemnified
party shall, if a claim in respect thereof is to be made against the
indemnifying party under this Section 10, notify the indemnifying party in
writing of the claim or the commencement of that action; provided,
30
however, that the failure to notify the indemnifying party shall not relieve it
from any liability which it may have under this Section 10 except to the extent
it has been materially prejudiced by such failure and, provided further, that
the failure to notify the indemnifying party shall not relieve it from any
liability which it may have to an indemnified party otherwise than under this
Section 10. If any such claim or action shall be brought against an
indemnified party, and it shall notify the indemnifying party thereof, the
indemnifying party shall be entitled to participate therein and, to the extent
that it wishes, jointly with any other similarly notified indemnifying party, to
assume the defense thereof with counsel reasonably satisfactory to the
indemnified party. After notice from the indemnifying party to the indemnified
party of its election to assume the defense of such claim or action, the
indemnifying party shall not be liable to the indemnified party under this
Section 10 for any legal or other expenses subsequently incurred by the
indemnified party in connection with the defense thereof other than reasonable
costs of investigation; provided, however, that the Representatives shall have
the right to employ counsel to represent jointly the Representatives and those
other U.S. Underwriters and their respective officers, employees and controlling
persons who may be subject to liability arising out of any claim in respect of
which indemnity may be sought by the U.S. Underwriters against the Company, the
Bank or any Selling Stockholder under this Section 10 if, in the reasonable
judgment of the Representatives, it is advisable for the Representatives and
those U.S. Underwriters, officers, employees and controlling persons to be
jointly represented by separate counsel, and in that event the fees and expenses
of such separate counsel shall be paid by the Company. Each indemnified party,
as a condition of the indemnity agreements contained in Sections 10, 10 and
10, shall use its best efforts to cooperate with the indemnifying party in the
defense of any such action or claim. No indemnifying party shall (i) without
the prior written consent of the indemnified parties (which consent shall not be
unreasonably withheld), settle or compromise or consent to the entry of any
judgment with respect to any pending or threatened claim, action, suit or
proceeding in respect of which indemnification or contribution may be sought
hereunder (whether or not the indemnified parties are actual or potential
parties to such claim or action) unless such settlement, compromise or consent
includes an unconditional release of each indemnified party from all liability
arising out of such claim, action, suit or proceeding, or (ii) be liable for any
settlement of any such action effected without its written consent (which
consent shall not be unreasonably withheld), but if settled with its written
consent or if there be a final judgment of the plaintiff in any such action, the
indemnifying party agrees to indemnify and hold harmless any indemnified party
from and against any loss of liability by reason of such settlement or judgment.
(e) If the indemnification provided for in this Section 10 shall for
any reason be unavailable to or insufficient to hold harmless an indemnified
party under Section 10, 10 or 10 in respect of any loss, claim, damage or
liability, or any action in respect thereof, referred to therein, then each
indemnifying party shall (subject to Section 10(g)), in lieu of indemnifying
such indemnified party, contribute to the amount paid or payable by such
indemnified party as a result of such loss, claim, damage or liability, or
action in respect thereof, (i) in such proportion as shall be appropriate to
reflect the relative benefits received by the Company, the Bank and the Selling
Stockholders on the one hand and the U.S. Underwriters on the other hand from
the offering of the U.S. Stock or (ii) if the allocation provided by clause (i)
31
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 Company, the Bank and the Selling Stockholders on
the one hand and the U.S. Underwriters on the other hand with respect to the
statements or omissions which resulted in such loss, claim, damage or liability,
or action in respect thereof, as well as any other relevant equitable
considerations. The relative benefits received by the Company, the Bank and the
Selling Stockholders on the one hand and the U.S. Underwriters on the other hand
with respect to such offering shall be deemed to be in the same proportion as
the total net proceeds from the offering of the U.S. Stock purchased under this
Agreement (before deducting expenses) received by the Company, the Bank and the
Selling Stockholders, on the one hand, and the total underwriting discounts and
commissions received by the U.S. Underwriters with respect to the shares of the
U.S. Stock purchased under this Agreement, on the other hand, bear to the total
gross proceeds from the offering of the shares of the U.S. Stock under this
Agreement, in each case as set forth in the table on the cover page of the
Prospectus. The relative fault shall be determined by reference to whether the
untrue or alleged untrue statement of a material fact or omission or alleged
omission to state a material fact relates to information supplied by the
Company, the Bank, the Selling Stockholders or the U.S. Underwriters, the intent
of the parties and their relative knowledge, access to information and
opportunity to correct or prevent such statement or omission. For purposes of
the preceding two sentences, the net proceeds deemed to be received by the
Company shall be deemed to be also for the benefit of the Bank and information
supplied by the Company shall also be deemed to have been supplied by the Bank.
The Company, the Bank, the Selling Stockholders and the U.S. Underwriters agree
that it would not be just and equitable if contributions pursuant to this
Section 10 were to be determined by pro rata allocation (even if the U.S.
Underwriters were treated as one entity for such purpose) or by any other method
of allocation which does not take into account the equitable considerations
referred to herein. The amount paid or payable by an indemnified party as a
result of the loss, claim, damage or liability, or action in respect thereof,
referred to above in this Section 10 shall be deemed to include, for purposes
of this Section 10, any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any such action
or claim. Notwithstanding the provisions of this Section 10, no U.S.
Underwriter shall be required to contribute any amount in excess of the amount
by which the total price at which the U.S. Stock underwritten by it and
distributed to the public was offered to the public exceeds the amount of any
damages which such U.S. Underwriter has otherwise paid or become liable to pay
by reason of any 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 Securities Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. The U.S.
Underwriters' obligations to contribute as provided in this Section 10 are
several in proportion to their respective underwriting obligations and not
joint.
(f) The U.S. Underwriters severally confirm that the statements with
respect to the public offering of the U.S. Stock set forth on the cover page of,
and under the caption "Underwriting" in, the Prospectus are correct and
constitute the only information furnished in writing to the Company by or on
behalf of the U.S. Underwriters specifically for inclusion in the Registration
Statements and the Prospectus.
32
(g) Notwithstanding any other provision of this Section 10, in no
event shall the Bank be liable for or obligated to pay any amounts pursuant to
Section 10(a), (b), (c) or (e) above to the extent such payments would at the
time thereof exceed the applicable limitations set forth in Section 23A of the
Federal Reserve Act.
11. Defaulting U.S. Underwriters.
If, on either Delivery Date, any U.S. Underwriter defaults in the
performance of its obligations under this Agreement, the remaining non-
defaulting U.S. Underwriters shall be obligated to purchase the U.S. Stock which
the defaulting U.S. Underwriter agreed but failed to purchase on such Delivery
Date in the respective proportions which the number of shares of the Firm U.S.
Stock set forth opposite the name of each remaining non-defaulting U.S.
Underwriter in Schedule 1 hereto bears to the total number of shares of the Firm
U.S. Stock set forth opposite the names of all the remaining non-defaulting U.S.
Underwriters in Schedule 1 hereto; provided, however, that the remaining non-
defaulting U.S. Underwriters shall not be obligated to purchase any of the U.S.
Stock on such Delivery Date if the total number of shares of the U.S. Stock
which the defaulting U.S. Underwriter or U.S. Underwriters agreed but failed to
purchase on such date exceeds 9.09% of the total number of shares of the U.S.
Stock to be purchased on such Delivery Date, and any remaining non-defaulting
U.S. Underwriter shall not be obligated to purchase more than 110% of the number
of shares of the U.S. Stock which it agreed to purchase on such Delivery Date
pursuant to the terms of Section 3. If the foregoing maximums are exceeded,
the remaining non-defaulting U.S. Underwriters, or those other underwriters
satisfactory to the Representatives who so agree, shall have the right, but
shall not be obligated, to purchase, in such proportion as may be agreed upon
among them, all the U.S. Stock to be purchased on such Delivery Date. If the
remaining U.S. Underwriters or other underwriters satisfactory to the
Representatives do not elect to purchase the shares which the defaulting U.S.
Underwriter or U.S. Underwriters agreed but failed to purchase on such Delivery
Date, this Agreement (or, with respect to the Second Delivery Date, the
obligation of the U.S. Underwriters to purchase, and of the Company and the
Selling Stockholders to sell, the Option Stock) shall terminate without
liability on the part of any non-defaulting Underwriter, the Company or the
Selling Stockholders, except that the Company will continue to be liable for the
payment of expenses to the extent set forth in Sections 8 and 13. As used in
this Agreement, the term "U.S. Underwriter" includes, for all purposes of this
Agreement unless the context requires otherwise, any party not listed in
Schedule 1 hereto who, pursuant to this Section 11, purchases Firm U.S. Stock
which a defaulting U.S. Underwriter agreed but failed to purchase.
Nothing contained herein shall relieve a defaulting U.S. Underwriter
of any liability it may have to the Company and the Selling Stockholders for
damages caused by its default. If other underwriters are obligated or agree to
purchase the U.S. Stock of a defaulting or withdrawing U.S. Underwriter, either
the Representatives or the Company may postpone the Delivery Date for up to
seven full business days in order to effect any changes that in the opinion of
counsel for the Company or counsel for the U.S. Underwriters may be necessary in
the Registration Statement, the Prospectus or in any other document or
arrangement.
33
12. Termination. The obligations of the U.S. Underwriters hereunder
may be terminated by the Representatives by notice given to and received by the
Company and the Selling Stockholders prior to delivery of and payment for the
Firm U.S. Stock if, prior to that time, any of the events described in Sections
9 or 9 shall have occurred or if the U.S. Underwriters shall decline to
purchase the U.S. Stock for any reason permitted under this Agreement.
13. Reimbursement of U.S. Underwriters' Expenses. If (a) the Company
or any Selling Stockholder shall fail to tender the U.S. Stock for delivery to
the U.S. Underwriters for any reason permitted under this Agreement, or (b) the
U.S. Underwriters shall decline to purchase the U.S. Stock for any reason
permitted under this Agreement (including the termination of this Agreement
pursuant to Section 12), the Company and the Selling Stockholders shall
reimburse the U.S. Underwriters for the fees and expenses of their counsel and
for such other out-of-pocket expenses as shall have been incurred by them in
connection with this Agreement and the proposed purchase of the Stock, and upon
demand the Company and the Selling Stockholders shall pay the full amount
thereof to the Representatives. If this Agreement is terminated pursuant to
Section 11 by reason of the default of one or more U.S. Underwriters, neither
the Company nor any Selling Stockholder shall be obligated to reimburse any
defaulting U.S. Underwriter on account of those expenses.
14. Notices, etc. All statements, requests, notices and agreements
hereunder shall be in writing, and:
(a) if to the U.S. Underwriters, shall be delivered or sent by
mail, telex or facsimile transmission to ▇▇▇▇▇▇ Brothers Inc., Three
World Financial Center, New York, New York 10285, Attention:
Syndicate Department (Fax: ▇▇▇-▇▇▇-▇▇▇▇);
(b) if to the Company or to the Bank, shall be delivered or sent
by mail, telex or facsimile transmission to the address of the Company
set forth in the Primary Registration Statement, Attention: _________
(Fax: _________); and
(c) if to any Selling Stockholder, shall be delivered or sent by
mail, telex or facsimile transmission to such Selling Stockholder at
the address set forth on Schedule 2 hereto;
provided, however, that any notice to an U.S. Underwriter pursuant to Section
10 shall be delivered or sent by mail, telex or facsimile transmission to such
U.S. Underwriter at its address set forth in its acceptance telex to the
Representatives, which address will be supplied to any other party hereto by the
Representatives upon request. Any such statements, requests, notices or
agreements shall take effect at the time of receipt thereof. The Company and
the Selling Stockholders shall be entitled to act and rely upon any request,
consent, notice or agreement given or made on behalf of the U.S. Underwriters by
▇▇▇▇▇▇ Brothers Inc. and the Company
34
and the U.S. Underwriters shall be entitled to act and rely upon any request,
consent, notice or agreement given or made on behalf of the Selling Stockholders
by the Custodian.
15. Persons Entitled to Benefit of Agreement. This Agreement shall
inure to the benefit of and be binding upon the U.S. Underwriters, the Company,
the Selling Stockholders and their respective personal representatives and
successors. This Agreement and the terms and provisions hereof are for the sole
benefit of only those persons, except that (A) the representations, warranties,
indemnities and agreements of the Company and the Selling Stockholders contained
in this Agreement shall also be deemed to be for the benefit of the officers and
employees of each U.S. Underwriter and the person or persons, if any, who
control each U.S. Underwriter within the meaning of Section 15 of the Securities
Act and (B) the indemnity agreement of the U.S. Underwriters contained in
Section 10 of this Agreement shall be deemed to be for the benefit of
directors, officers and employees of the Company and any person controlling the
Company within the meaning of Section 15 of the Securities Act. Nothing in this
Agreement is intended or shall be construed to give any person, other than the
persons referred to in this Section 15, any legal or equitable right, remedy or
claim under or in respect of this Agreement or any provision contained herein.
16. Survival. The respective indemnities, representations,
warranties and agreements of the Company, the Bank, the Selling Stockholders and
the U.S. Underwriters contained in this Agreement or made by or on behalf of
them, respectively, pursuant to this Agreement, shall survive the delivery of
and payment for the U.S. Stock and shall remain in full force and effect,
regardless of any investigation made by or on behalf of any of them or any
person controlling any of them.
17. Definition of the Terms "Business Day" and "Subsidiary". For
purposes of this Agreement, (a) "business day" means any day on which the New
York Stock Exchange, Inc. is open for trading and (b) "subsidiary" has the
meaning set forth in Rule 405 of the Rules and Regulations.
18. Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of New York.
19. Counterparts. This Agreement may be executed in one or more
counterparts and, if executed in more than one counterpart, the executed
counterparts shall each be deemed to be an original but all such counterparts
shall together constitute one and the same instrument.
20. Headings. The headings herein are inserted for convenience of
reference only and are not intended to be part of, or to affect the meaning or
interpretation of, this Agreement.
35
If the foregoing correctly sets forth the agreement among the Company,
the Bank, the Selling Stockholders and the U.S. Underwriters, please indicate
your acceptance in the space provided for that purpose below.
Very truly yours,
FLAGSTAR BANCORP, INC.
By
----------------------------------------
[name]
FLAGSTAR BANK, FSB
By
----------------------------------------
[name]
The Selling Stockholders named in Schedule 2 to
this Agreement
By
----------------------------------------
Attorney-in-Fact
Accepted:
▇▇▇▇▇▇ Brothers Inc.
PaineWebber Incorporated
▇▇▇▇▇ & Co.
For themselves as U.S. Underwriters and
as Representatives of the several
U.S. Underwriters named in Schedule 1 hereto
By ▇▇▇▇▇▇ Brothers Inc.
By
----------------------------------
Authorized Representative
