Exhibit 99.1
1,265,000 SHARES
DEARBORN BANCORP, INC.
COMMON STOCK
UNDERWRITING AGREEMENT
July 20, 2004
Oppenheimer & Co. Inc.
Howe Barnes Investments, Inc.
As Representatives of the Underwriters
named in Schedule I
c/o Oppenheimer & Co. Inc.
300 River Place
Suite 400
Detroit, MI 48207
Dear Sirs:
The undersigned, Dearborn Bancorp, Inc., a Michigan corporation (the
"Company"), hereby confirms its agreement with Oppenheimer & Co. Inc.
("Oppenheimer") and Howe Barnes Investments, Inc., as Representatives of the
Underwriters named in Schedule I, as follows:
1. INTRODUCTION. The Company proposes to issue and sell to the
Underwriters, jointly and not severally, 1,265,000 shares (the "Firm Stock") of
the Company's common stock (the "Common Stock"). In addition, solely for the
purpose of covering over-allotments, the Company proposes to grant to the
Underwriters the option to purchase an additional 189,750 shares of Common Stock
(the "Additional Stock"). The Firm Stock and the Additional Stock are sometimes
collectively referred to herein as the "Stock." The Stock is more fully
described in the Prospectus referred to below.
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company represents and warrants to the Underwriters that:
(a) The Company has filed with the Securities and Exchange
Commission (the "Commission") a registration statement on Form S-2 (No.
333-116857), as amended by Amendment No. 1 thereto, including any related
preliminary prospectus ("Preliminary Prospectus"), under the Securities
Act of 1933, as amended (the "Act"), and has filed a registration
statement on Form S-2 (No. 333-117502) pursuant to Rule 462(b) under the
Act that incorporates the Corporation's Registration Statement on Form S-2
(No. 333-116857), for the registration of the Stock under the Act. The
Company and the transaction
contemplated hereby meet all of the requirements and comply with all of
the conditions for registering the Stock with the Commission on a
registration statement on Form S-2. Except as the context may otherwise
require, such registration statements, as amended, on file with the
Commission at the time the registration statements became effective
(including the prospectus, financial statements, schedules, exhibits, and
all other documents incorporated by reference therein or filed as a part
thereof) collectively are herein called the "Registration Statement," and
the prospectus, in the form filed with the Commission pursuant to Rule
424(b) of the General Rules and Regulations of the Commission under the
Act (the "Regulations"), is herein called the "Prospectus." The term
"Preliminary Prospectus" means each prospectus included in such
Registration Statement before it became effective under the Act and any
prospectus filed by the Company with the consent of Oppenheimer pursuant
to Rule 424(a) of the Regulations. Reference made herein to any
Preliminary Prospectus or to the Prospectus shall be deemed to refer to
and include any documents incorporated by reference therein and any
document attached as an exhibit thereto, as of the date of such
Preliminary Prospectus or the Prospectus, as the case may be.
(b) Each Preliminary Prospectus, at the time of filing thereof,
contained all material statements which were required to be stated therein
in accordance with the Act and the Regulations, and conformed in all
material respects with the requirements of the Act and the Regulations,
and did not include any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which they
were made, not misleading; provided that the documents attached thereto as
an exhibit are subject to subparagraph (g), below. All contracts and other
documents required to be filed as exhibits to the Registration Statement
have been filed with the Commission as exhibits to the Registration
Statement. The Commission has not issued any order suspending or
preventing the use of any Preliminary Prospectus. The Registration
Statement at the time it became effective and the Prospectus at the time
it is filed with the Commission pursuant to Rule 424(b) of the Regulations
and on the Closing Date as defined herein, as then amended or
supplemented, will contain all material statements which are required to
be stated therein, respectively, in accordance with the Act and the
Regulations and will conform to the requirements of the Act and the
Regulations, and the Registration Statement and the Prospectus will not,
on such dates (as then amended or supplemented), include any untrue
statement of a material fact or omit to state any material fact required
to be stated therein or necessary to make the statements therein, in light
of the circumstances under which they were made, not misleading; provided,
however, that no representations or warranties under this paragraph (b)
are made with respect to statements or omissions made in reliance upon and
in conformity with written information furnished to the Company by you
with respect to the Underwriters expressly for use in connection with any
Preliminary Prospectus, the Registration Statement or Prospectus, or any
amendment thereof or supplement thereto.
(c) Each of the Company and the subsidiaries of the Company as
listed on Schedule II hereto (collectively, the "Subsidiaries") has been
duly organized and is validly existing as a corporation or trust in good
standing under the laws of the jurisdiction of its organization, with all
requisite corporate or trust power and authority, as the case may be, and
all necessary authorizations, consents, approvals, orders, licenses,
grants, certificates,
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and permits of and from all governmental regulatory officials and bodies,
to own their properties and to conduct their businesses as described in
the Prospectus, or are subject to no material liability or disability by
reason of the failure to have any such authorization, consent, approval,
order, license, grant, certificate or permit, and the Company has all such
power, authority, authorizations, consents, approvals, orders, licenses,
certificates, and permits appropriate or desirable to enter into this
Agreement and to carry out the provisions and conditions hereof and the
transactions contemplated hereby. The Company and each of the Subsidiaries
are duly qualified to transact business in all jurisdictions in which the
conduct of their business requires such qualification. The Company and the
Subsidiaries own, or possess adequate rights to use, all patents,
trademarks, service marks, copyrights, trademarks, trade secrets and
rights necessary for the conduct of their businesses as described in the
Prospectus and none of them has received any notice and is not otherwise
aware of any conflict with the asserted rights of others, and the Company
knows no basis therefor.
(d) The Subsidiaries are the only subsidiaries, direct or indirect,
of the Company. The outstanding shares of capital stock of each of the
Subsidiaries that is a corporation have been duly authorized and validly
issued, are fully paid and nonassessable, except to the extent shares of
capital stock of Community Bank of Dearborn, a Michigan banking
corporation (the "Bank"), may be deemed assessable under 12 U.S.C. Section
1831o, or Sections 3803 or 3807 of the Michigan Banking Code, and, to the
extent set forth in Schedule II hereto, are owned by the Company or
another Subsidiary free and clear of all liens, encumbrances and equities
and claims; and no options, warrants or other rights to purchase,
agreements or other obligations to issue or other rights to convert any
obligations into shares of capital stock or other ownership interests in
the Subsidiaries are outstanding.
(e) The Company and its Subsidiaries have good and marketable title
in fee simple to, or valid and enforceable leasehold estates in, all items
of real and personal property which are stated in the Registration
Statement and Prospectus to be owned or leased by them, in each case free
and clear of all liens, encumbrances, claims, security interests and
defects, other than those which are referred to in the Registration
Statement and the Prospectus, other than the security interest of the
Federal Home Loan Bank of Indianapolis, and other than those which do not
have a material adverse effect on the business, condition or prospects of
the Company and the Subsidiaries, taken as a whole.
(f) There is no litigation or governmental proceeding pending or
threatened against, or involving the assets, properties or business of, or
the franchises, permits, grants, approvals, orders, or licenses of, the
Company or the Subsidiaries which might in the aggregate materially and
adversely affect the value or the operations of any such properties,
business or assets of the Company and the Subsidiaries, taken as a whole,
except as referred to in the Registration Statement and the Prospectus.
(g) The documents incorporated by reference in the Registration
Statement and the Prospectus, when they were filed with the Commission,
conformed in all material respects to the requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and the rules and
regulations of the Commission thereunder, and none of
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such documents contained or, except as modified or superseded by the
Prospectus, contains an untrue statement of a material fact or omitted or,
except as modified or superseded by the Prospectus, omits or will omit to
state a material fact therein or necessary to make the statements therein
not misleading.
(h) Except as otherwise disclosed in the notes thereto or the
reports thereon, the combined consolidated financial statements and
related schedules of the Company and the Subsidiaries included in the
Registration Statement and Prospectus fairly present the financial
position and the consolidated results of operations of the Company and the
Subsidiaries at the respective dates and for the respective periods to
which they apply; such financial statements and related schedules have
been prepared in conformity with generally accepted accounting principals,
consistently applied throughout the periods involved; and all adjustments
necessary for a fair presentation of results for such periods have been
made. The summary financial and statistical data included or incorporated
by reference in the Registration Statement and the Prospectus present
fairly the information shown therein and such data have been compiled on a
basis consistent with the financial statements presented therein and the
books and records of the company.
(i) Crowe Chizek and Company LLC, whose reports with respect to the
Company and the Subsidiaries are filed with the Commission as a part of
the Registration Statement and the Prospectus, are independent certified
public accountants as required by the Act and the Regulations.
(j) There has been no material adverse change in the condition,
prospects or business of the Company and the Subsidiaries taken as a
whole, financial or otherwise, from that on the latest dates as of which
such condition, prospect or business is set forth in the Registration
Statement and the Prospectus except as referred to therein; and the
capitalization, prospects and the business of the Company conform to the
descriptions thereof contained in the Registration Statement and
Prospectus.
(k) No default exists, and no event has occurred which, with notice
or lapse of time, or both, would constitute a default or result in an
acceleration in the due performance and observance of any term, covenant
or condition of any indenture, mortgage, deed of trust, note, bank loan or
credit agreement or any other material agreement, understanding or
instrument to which the Company or one of the Subsidiaries is a party or
by which any of them or any of their properties may be bound or affected
(including, without limitation, any agreement or instrument filed as an
exhibit to the Registration Statement or to any document incorporated by
reference in the Registration Statement), except for any such breaches or
defaults which, individually or in the aggregate, would not reasonably be
expected to have a material adverse effect on the Company and the
Subsidiaries taken as a whole or prevent the sale of the Stock by the
Company to the Underwriters in accordance with this Agreement or the
Company's compliance with, or performance of its obligations under, the
terms and provisions of this Agreement (any of such effects, a "Material
Adverse Effect").
(l) Neither the Company nor any of the Subsidiaries is in violation
of (i) any term or provision of its articles of incorporation, bylaws or
declaration of trust, as
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applicable, or (ii) any franchise, license, grant, permit, judgment,
decree, order, statute, rule or regulation, except for, in the case of
this clause (ii), any such violations which, individually or in the
aggregate, would not reasonably be expected to have a Material Adverse
Effect.
(m) Neither the execution and delivery of this Agreement, the
consummation of the transactions herein contemplated, nor compliance with
the terms and provisions hereof, will (i) conflict with, result in a
breach of, or constitute a default under any of the terms, provisions or
conditions of, (A) the articles of incorporation or bylaws of the Company
or the articles of incorporation, bylaws or declaration of trust, as
applicable, of any of the Subsidiaries or (B) any material agreement or
instrument to which any of them is a party or by which any of them is
bound (including, without limitation, any agreement or instrument filed as
an exhibit to the Registration Statement or to any document incorporated
by reference in the Registration Statement) or (ii) violate any franchise,
license, permit, grant, judgment, decree, order, statute, rule or
regulation of any government, governmental instrumentality or court,
except for, in the case of clauses (i)(B) or (ii), any such conflicts,
breaches, defaults or violations which, individually or in the aggregate,
would not reasonably be expected to have a Material Adverse Effect.
(n) The Company has authorized capital stock as set forth in the
Prospectus. No preferred stock has been authorized by the Company. All of
the issued shares of Common Stock of the Company are duly and validly
authorized, issued and outstanding, fully paid and nonassessable, and free
of preemptive rights, and the Stock, when issued and delivered in
accordance with this Agreement, will be duly and validly authorized,
issued and outstanding, fully paid and nonassessable, and free of
preemptive rights. The Company's Common Stock and other securities conform
to all statements in relation thereto contained in the Registration
Statement and Prospectus.
(o) Subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus, and except as may
otherwise be indicated or contemplated herein or therein, neither the
Company nor any of the Subsidiaries, has (i) issued any securities or
incurred any liability or obligation, direct or contingent, for borrowed
money, other than in the ordinary course of business, (ii) entered into
any transaction not in the ordinary course of business that is required to
be disclosed in the Registration Statement, (iii) entered into any
transaction with an affiliate of the Company required to be disclosed in
the Registration Statement, or (iv) declared or paid any dividend on its
shares of capital stock. The Company and the Subsidiaries have no material
contingent obligations which are not disclosed in the Company's financial
statements which are included in the Registration Statement.
(p) The Company has obtained from all of its executive officers and
directors their written agreement that for a period of 120 days from the
date of this Agreement they will not, without your prior written consent,
sell, contract to sell or grant any option for the sale of or otherwise
dispose of, directly or indirectly, of any shares of Common Stock of the
Company (or any securities convertible into or exercisable for such shares
of Common Stock) owned by them, except as provided herein or in the
Registration Statement, and
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except for bona fide gifts to persons who agree in writing with you to be
bound by this clause.
(q) No person holds a right (which has not been waived, in writing),
to (i) require or participate in the registration under the Act of the
Stock to be affected by the Registration Statement, or (ii) require any
other registration statement to be filed in connection with any capital
stock of the Company within 120 days from the date of this Agreement
without your prior written consent.
(r) This Agreement has been duly and validly authorized, executed
and delivered by the Company.
(s) Neither the Company nor any of the Subsidiaries is involved in
any labor dispute which would reasonably be expected to have a Material
Adverse Effect and no such dispute is threatened.
(t) The Company and the Subsidiaries have filed all Federal, state,
local and foreign tax returns which are required to be filed by any of
them or have requested extensions thereof and have paid all taxes shown on
such returns and all assessments received by any of them to the extent
that the same have become due. All tax liabilities have been adequately
provided for in the financial statements of the Company, and the Company
does not know of any actual or proposed additional material tax
assessments except as described in the Prospectus.
(u) Except for the order of the Commission declaring the
Registration Statement effective and permits and similar authorizations
required under the securities or Blue Sky laws of certain jurisdictions,
no consent, authorization, or approval is required from any Federal, state
or local governmental agency or body in connection with this Agreement and
the transactions contemplated hereby other than such consents,
authorizations or approvals as have been obtained.
(v) None of the Company, the Subsidiaries or any officer, director
or employee of the Company or the Subsidiaries has made any payment of
funds of the Company or any of the Subsidiaries or purchased any property
with funds of the Company or any of the Subsidiaries in a manner
prohibited by law, and no funds of the Company or any of the Subsidiaries
or property purchased with funds of the Company or any of the Subsidiaries
have been set aside to be used for any payment prohibited by law. There
are no affiliations or associations between any member of the National
Association of Securities Dealers, Inc. (the "NASD") and any of the
Company's officers, directors or 5% or greater security holders, except as
set forth in the Registration Statement.
(w) The Company has submitted a Notification Form: Listing of
Additional Shares, relating to the Stock, with Nasdaq.
(x) Neither the Company nor any of the Subsidiaries nor any
affiliate of either of them has taken, and they will not take, directly or
indirectly, any action designed to cause or
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result in, or which has constituted or which might reasonably be expected
to constitute, the stabilization or manipulation of the price of the
Company's Common Stock in order to facilitate the sale or resale of the
Stock. The Company acknowledges that the Underwriters may engage in
passive market making transactions in the Common Stock in accordance with
Regulation M under the Exchange Act.
(y) Except as disclosed on Schedule III, neither the Company nor any
of the Subsidiaries owns any shares of stock or any securities of any
corporation, except debt securities acquired in the ordinary course of
business, or has any equity interest in any firm, partnership, association
or other entity.
(z) The Company, for the past two years, has filed all reports,
proxy statements and other information, and all amendments to previously
filed reports, proxy statements and other information, required to be
filed by it pursuant to Sections 13, 14 or 15(d) of the Exchange Act.
(aa) The Company is not and will not immediately after the offering
be an "investment company," or a company "controlled" by an "investment
company" within the meaning of the Investment Company Act of 1940 (the
"1940 Act"), as amended.
(bb) The Company and each of its Subsidiaries maintains a system of
internal accounting controls sufficient to provide reasonable assurances
that (i) transactions are executed in accordance with management's general
or specific authorization; (ii) transactions are recorded as necessary to
permit preparation of financial statements in conformity with generally
accepted accounting principles and to maintain accountability for assets;
(iii) access to material assets is permitted only in accordance with
management's general or specific authorization; and (iv) the recorded
accountability for assets is compared with existing assets at reasonable
intervals and appropriate action is taken with respect to any differences.
(cc) The Company and each of its Subsidiaries carry, or are covered
by, insurance in such amounts and covering such risks as it believes is
adequate for the conduct of their respective businesses and the value of
their respective properties; and neither the Company nor any of the
Subsidiaries has any reason to believe that any of them will not be able
to renew its existing insurance coverage as and when such coverage expires
or to obtain similar coverage from similar insurers as may be necessary to
continue its business.
(dd) The Company and each Subsidiary, and each of their respective
"pension plans" (as defined in the Employee Retirement Income Security Act
of 1974, as amended, including the regulations and published
interpretations thereunder ("ERISA")), are in compliance in all material
respects with all currently applicable provisions of ERISA; no "reportable
event" (as defined in ERISA) has occurred with respect to any "pension
plan" (as defined in ERISA) for which the Company or any Subsidiary would
have any liability; neither the Company nor any of its Subsidiaries has
incurred, and neither the Company nor any of its Subsidiaries expects to
incur, liability under (i) Title IV of ERISA with respect to
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termination of, or withdrawal from, any "pension plan" or (ii) Sections
412 or 4971 of the Internal Revenue Code of 1986, as amended, including
the regulations and published interpretations thereunder (the "Code"); and
each "pension plan" for which the Company or any Subsidiary would have any
liability that is intended to be qualified under Section 401(a) of the
Code is so qualified in all material respects and nothing has occurred,
whether by action or by failure to act, which would cause the loss of such
qualification.
(ee) (i) The Company has established and maintains disclosure
controls and procedures (as such term is defined in Rule 13a-14 under the
Exchange Act); (ii) such disclosure controls and procedures are designed
so that information required to be disclosed by the Company in the reports
it files or submits under the Exchange Act is accumulated and communicated
to the Company's management, including its principal executive officer and
its principal financial officer, as appropriate, to allow timely decisions
regarding disclosure; and (iii) such disclosure controls and procedures
are effective in all material respects to perform the functions for which
they were established.
(ff) Since the date of the filing of the Company's Quarterly Report
on Form 10-Q for the quarter ended March 31, 2004, the Company's auditors
and the audit committee of the Company have not been advised of (i) any
significant deficiencies in the design or operation of internal controls
which could adversely affect the Company's ability to record, process,
summarize and report financial data nor any material weaknesses in
internal controls; and (ii) any fraud, whether or not material, that
involves management or other employees who have a significant role in the
Company's internal controls.
(gg) Since the date of the filing of the Company's Quarterly Report
on Form 10-Q for the quarter ended March 31, 2004, there have been no
significant changes in internal controls or in other factors that could
significantly affect internal controls, including any corrective actions
with regard to significant deficiencies and material weaknesses.
(hh) The chief executive officer and the chief financial officer of
the Company have made all certifications required by the Sarbanes-Oxley
Act of 2002 (the "Sarbanes-Oxley Act") and any related rules and
regulations promulgated by the Commission, and the statements contained in
any such certification are complete and correct; the Company is otherwise
in compliance in all material respects with all applicable effective
provisions of the Sarbanes-Oxley Act.
3. PURCHASE, SALE AND DELIVERY OF THE STOCK. On the basis of the
representations and warranties herein contained, but subject to the terms and
conditions herein set forth, the Company agrees to sell to the Underwriters,
jointly and not severally, and the Underwriters, jointly and not severally,
agree to purchase from the Company, the Firm Stock at the purchase price of
$24.44 per share as set forth in Schedule I.
Payment for the Firm Stock shall be made by wire transfer to an account
specified by the Company upon delivery of the Firm Stock to you for the account
of the several Underwriters. Such
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delivery and payments shall be made at 10:00 A.M., Detroit Time, on the third
business day following the date of this Agreement or at such other time as shall
be agreed upon among us. The hour and date of such delivery and payment are
herein called the "Closing Date."
In addition, on the basis of the representations and warranties herein
contained, but subject to the terms and conditions herein set forth, the Company
grants to the several Underwriters the option to purchase, severally and not
jointly, up to 189,750 shares of the Additional Stock as may be necessary to
cover over-allotments, at the same purchase price to be paid by the several
Underwriters to the Company for the Firm Stock as set forth in the first
paragraph of this Section 3, and in the proportion set forth in Schedule I. The
option may be exercised at any time (but not more than once) on or before the
thirtieth day following the effective date of the Registration Statement by
written notice by Oppenheimer to the Company. Such notice shall set forth the
aggregate number of shares of Additional Stock as to which the options are being
exercised, the name or names in which the shares of Additional Stock are to be
registered, the denominations in which the Additional Stock are to be issued,
and the date and time, as reasonably determined by you, when the Additional
Stock is to be delivered (such date and time being herein sometimes referred to
as the "Additional Closing Date"); provided, however, that the Additional
Closing Date shall not be earlier than the Closing Date nor earlier than the
second business day after the date on which the option shall have been exercised
nor later than the eighth business day after the day on which the option shall
have been exercised.
Payment for the Additional Stock shall be made by wire transfer to an
account specified by the Company upon delivery of the Additional Stock to you.
The Company shall not be obligated to sell or deliver any shares of Firm
Stock or Additional Stock except upon tender of payment by you for all the Firm
Stock or Additional Stock, as the case may be, agreed to be purchased by you
hereunder.
4. OFFERING. The Underwriters are to make a public offering of the Stock
as soon, on or after the effective date of the Registration Statement, as you
deem it advisable so to do. During the offering, the Stock is to be offered to
the public at the public offering price set forth on the cover page of the
Prospectus (such price being herein called the "public offering price"). After
completion of the offering, you may from time to time thereafter increase or
decrease the public offering price to such extent as you may determine.
5. COVENANTS OF THE COMPANY.
The Company covenants that it will:
(a) Will notify you immediately, and confirm the notice in writing,
(i) of the issuance by the Commission of any stop order or of the
initiation, or the threatening, of any proceedings for that purpose, and
(ii) of the receipt of any comments from the Commission. The Company will
make every reasonable effort to prevent the issuance of a stop order, and,
if the Commission shall enter a stop order at any time, the Company will
make every reasonable effort to obtain the lifting of such order at the
earliest possible moment.
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(b) During the time when a prospectus is required to be delivered
under the Act, comply so far as it is able with all requirements imposed
upon it by the Act, as now and hereafter amended, and by the Regulations,
as from time to time in force, so far as necessary to permit the
continuance of sales of or dealings in the Stock in accordance with the
provisions hereof and the Prospectus. If at any time when a prospectus
relating to the Stock is required to be delivered under the Act any event
shall have occurred as a result of which, in the opinion of counsel for
the Company or counsel for the Underwriters, the Registration Statement or
Prospectus as then amended or supplemented includes an untrue statement of
a material fact or omits to state any material fact required to be stated
therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or if it is
necessary at any time to amend or supplement the Registration Statement or
Prospectus to comply with the Act, the Company will notify you promptly
and prepare and file with the Commission an appropriate amendment or
supplement in form satisfactory to you. The cost of preparing, filing and
delivering copies of such amendment or supplement shall be paid by the
Company, unless such untrue statement or omission is made in reliance upon
and in conformity with the written information furnished to the Company by
you with respect to the Underwriters expressly for use in connection with
the Registration Statement or Prospectus.
(c) Deliver to each of the Underwriters such number of copies of
each Preliminary Prospectus as it may reasonably request and deliver to
each of the Representatives one signed copy of the Registration Statement,
including exhibits, and all post-effective amendments thereto and deliver
to you such number of copies of the Prospectus, the Registration Statement
and supplements and amendments thereto, if any, as you may reasonably
request for the purposes contemplated by the Act.
(d) Endeavor in good faith, in cooperation with you, at or prior to
the time the Registration Statement becomes effective, to qualify the
Stock for offering and sale under the securities laws relating to the
offering or sale of the Stock in such jurisdictions as you may reasonably
designate; provided that no such qualification shall be required in any
jurisdiction where, as a result thereof, the Company would be subject to
service of general process or taxation or be required to qualify to do
business as a foreign corporation where it is not now so qualified. In
each jurisdiction where such qualification shall be affected, the Company
will, unless you agree that such action is not at the time necessary or
advisable, file and make statements or reports at such times as may
reasonably be required by the laws of such jurisdiction. The Company will,
from time to time, prepare and file such statements, reports and other
documents as are or may be required to continue any such qualifications in
effect for so long a period as Oppenheimer may reasonably request for
distribution of the Stock.
(e) Make generally available to its security holders as soon as
practicable, but not later than the first day of the fifteenth full
calendar month following the effective date of the Registration Statement
(as defined in Rule 158(c) of the Regulations), an earning statement of
the Company (which need not be certified by independent certified public
accountants unless required by the Act or the Regulations, but which shall
satisfy the provisions of Section 11(a) of the Act including, Rule 158 of
the Regulations).
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(f) For a period of 120 days after the date of this Agreement, not
issue, sell, contract to sell, grant any option for the sale of or
otherwise dispose of, directly or indirectly, any shares of Common Stock
of the Company (or securities convertible into or exercisable for such
Common Stock) other than the Firm Stock and Additional Stock (if
applicable) being sold by the Company without the prior written consent of
Oppenheimer, other than options and Common Stock granted and/or issued to
officers, directors or employees from time to time in the ordinary course
of business pursuant to employment agreements and stock option or stock
bonus plans currently in effect.
(g) For a period of three years from the effective date of the
Registration Statement furnish you with the following:
(i) as soon as practicable after they have been sent to
shareholders of the Company or filed with the Commission, three
copies of each annual and interim financial and other report or
communications sent by the Company to its shareholders or filed with
the Commission;
(ii) as soon as practicable, three copies of every press
release and every material news item and article in respect of the
Company or the affairs of the Company which was released by the
Company; and
(iii) such additional documents and information with respect
to the Company as you may from time to time reasonably request,
including without limitation, information to comply with Rule
15c2-11 of the Exchange Act Rules, to the extent legally permissible
and will not give rise to an obligation by the Company to make a
public disclosure of the information.
(h) Apply the net proceeds from the offering received by it in the
manner set forth under "Use of Proceeds" in the Prospectus.
(i) Furnish to you as early as practicable prior to the Closing
Date, but not later than two full business days prior thereto, a copy of
the latest available unaudited interim consolidated financial statements
of the Company and the Subsidiaries which have been read by the Company's
independent public accountants as stated in their letters to be furnished
pursuant to Section 7(f) hereof.
(j) Not file any amendment or supplement to the Registration
Statement or Prospectus after the effective date of the Registration
Statement to which you shall reasonably object in writing after being
furnished a copy thereof and a reasonable opportunity to review the copy.
(k) Use every reasonable effort to effect the listing of the Common
Stock, including, without limitation, the Firm Stock and the Additional
Stock, on the Nasdaq National Market (the "Market") as promptly as
practicable and to the extent required by the Market.
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(l) Comply with all registration, filing and reporting requirements
of the Act or the Exchange Act which may be applicable to the Company or
any of the Subsidiaries so as to permit the completion of the distribution
of the Stock as contemplated by this Agreement.
(m) Not invest, or otherwise use, the proceeds received by the
Company from its sale of the Stock in such a manner as would require the
Company or any of the Subsidiaries to register as an investment company
under the 1940 Act.
(n) For a period of two years from the date hereof, the Company will
maintain a transfer agent while the Stock is publicly traded.
(o) For a period of two years from the date hereof, the Company will
not take, directly or indirectly, any action designed to cause or result
in, or that has constituted or might reasonably be expected to constitute,
the stabilization or manipulation of the price of any securities of the
Company.
6. PAYMENT OF EXPENSES. The Company hereby agrees to pay all expenses in
connection with (i) the preparation, printing, filing and mailing of the
Registration Statement and the Prospectus and the printing and mailing of this
Agreement and related documents, including the cost of all copies thereof and of
the Preliminary Prospectus and of the Prospectus and any amendments thereof or
supplements thereto supplied to you in quantities as hereinabove stated, (ii)
the printing, engraving, issuance, transfer and delivery of the Stock, including
any transfer or other taxes payable thereon, (iii) the qualification of the
Stock under state securities or Blue Sky laws, including the costs of printing
and mailing the "Blue Sky Survey" and disbursements and fees of counsel in
connection therewith, (iv) the filing fee payable to the NASD, and (v) the
listing of the Firm Stock and the Additional Stock on the Market.
Notwithstanding anything to the contrary contained above, upon completion of the
offering, the Company shall not have any obligation for the fees and
disbursements of counsel for the Underwriters or for any out-of-pocket expenses
incurred by the Underwriters relating to the Registration Statement, including
but not limited to road shows, syndicate expenses, sales literature and
advertising; provided, however that the Company will be responsible for all of
its own out-of-pocket expenses, including transportation, meals and lodging,
incurred in connection with the road shows or other selling efforts.
7. CONDITIONS OF THE UNDERWRITERS' OBLIGATIONS. The obligations of the
Underwriters to purchase and pay for the Stock, as provided herein, shall be
subject to the continuing accuracy of the representations and warranties of the
Company as of the date hereof and as of the Closing Date (with this and every
other reference to the "Closing Date" in this Section 7 deemed to refer to the
Closing Date or the Additional Closing Date, as applicable), to the performance
by the Company of its obligations hereunder and to the following conditions:
(a) The Registration Statement shall have become effective not later
than 5:00 P.M., Detroit Time, on the date of this Agreement or such later
date and time as shall be consented to in writing by you, and, at the
Closing Date, no stop order shall have been issued or proceedings therefor
initiated or threatened by the Commission.
12
(b) At the Closing Date, you shall have received the opinion of
Dickinson Wright PLLC, counsel for the Company, dated the Closing Date,
addressed to the Underwriters and in form and scope reasonably
satisfactory to counsel for the Underwriters, to the effect that:
(i) the Company (A) is a corporation organized and validly
existing as a corporation in good standing under the laws of the
State of Michigan, (B) has full corporate power and authority to own
its properties and to conduct its business as described in the
Registration Statement and Prospectus, and (C) to such counsel's
knowledge, is not qualified to transact business in any jurisdiction
other than the State of Michigan;
(ii) each of the Subsidiaries (A) is a corporation or trust
organized and validly existing and in good standing under the laws
of the state of its organization, (B) has full corporate or trust
power and authority to own its respective properties and conduct its
respective business as described in the Registration Statement and
Prospectus, (C) to such counsel's knowledge, is not qualified to
transact business in any jurisdiction other than the state of its
organization, and (D) to such counsel's knowledge, the Company has
no directly or indirectly held subsidiary other than the
Subsidiaries;
(iii) the Company and/or the Bank is the registered holder of
all of the outstanding capital stock or ownership interests, as
applicable, of the Subsidiaries as described in the Prospectus and,
to such counsel's knowledge, any and all such shares of stock or
ownership interests so owned are validly issued and outstanding,
fully paid and nonassessable except to the extent shares of capital
stock of the Bank may be deemed assessable under 12 U.S.C. Section
1831o, or Sections 3803 and 3807 of the Michigan Banking Code, and
are owned free and clear of any liens, encumbrances or other claims
or restrictions whatsoever other than the security interest of the
Federal Home Loan Bank of Indianapolis;
(iv) the Company has authorized capital stock as set forth in
the Prospectus; the Stock has been duly and validly authorized for
issuance by the Company and, when issued and delivered in exchange
for the Company's receipt of the consideration therefor as
contemplated by this Agreement, will be validly issued, fully paid
and nonassessable; and the Stock conforms to the description thereof
contained under the caption "Description of Common Stock" in the
Registration Statement and the Prospectus;
(v) the statements contained under the captions "Business" and
"Description of Common Stock" in the Registration Statement and the
Prospectus, insofar as they are descriptions of corporate documents,
stock option plans, contracts or agreements or descriptions of laws,
regulations, or regulatory requirements, or refer to compliance with
law or to statements of law or legal conclusions, are correct in all
material respects;
13
(vi) the certificates evidencing the Stock are in the form
approved by the Board of Directors of the Company and the
certificates evidencing the Stock comply with the articles of
incorporation and the bylaws of the Company and the laws of the
State of Michigan;
(vii) this Agreement has been duly authorized, executed and
delivered by the Company, and is a valid and binding agreement of
the Company enforceable in accordance with its terms;
(viii) there are, to such counsel's knowledge, (A) no
contracts or other documents applicable to the Company or any of the
Subsidiaries or to which the Company or any of the Subsidiaries is a
party which are required to be filed as exhibits to the Registration
Statement other than those filed as exhibits thereto, and (B) no
legal or governmental proceedings pending or threatened against, or
involving the assets, properties or business of, the Company or any
of the Subsidiaries which, individually or in the aggregate, would
reasonably be expected to have a Material Adverse Effect, except as
disclosed and properly described in the Registration Statement and
Prospectus;
(ix) the execution and delivery of this Agreement, the sale of
the Stock by the Company to the Underwriters in accordance with this
Agreement and the Company's compliance with, or performance of its
obligations under, the terms and provisions of this Agreement will
not (A) result in a breach of any of the terms and provisions or
conditions of, or constitute a default (or an event which with
notice or lapse of time, or both, would constitute a default or
acceleration) under, or result in the creation or imposition of any
lien, charge or encumbrance upon the Stock being sold by the Company
hereunder or any property or asset of the Company pursuant to the
terms of any material agreement or instrument known to such counsel
(including, without limitation, any agreement or instrument filed as
an exhibit to the Registration Statement or to any document
incorporated by reference in the Registration Statement) to which
the Company or any of the Subsidiaries is a party or by which the
Company or any of the Subsidiaries may be bound or to which any of
the properties or assets of the Company or any of the Subsidiaries
is subject, except for any such breaches or defaults which,
individually or in the aggregate, would not reasonably be expected
to have a Material Adverse Effect, (B) result in any violation of
the provisions of the articles of incorporation, bylaws or
declaration of trust, as applicable, of the Company or any of the
Subsidiaries, or (C) to such counsel's knowledge, result in any
violation of any statute or any order, rule, or regulation
applicable to the Company or any of the Subsidiaries of any court or
of any Federal, state, local or other regulatory authority or other
governmental body having jurisdiction over the Company or any of the
Subsidiaries, except for, in the case of this clause (C), any such
violations which, individually or in the aggregate, would not
reasonably be expected to have a Material Adverse Effect;
(x) no consent, approval, authorization or order of any court
or governmental agency or body, is required to be obtained by the
Company or any of
14
the Subsidiaries in connection with the execution and delivery of
this Agreement or the sale of the Stock by the Company to the
Underwriters in accordance with this Agreement and the Company's
compliance with, or performance of its obligations under, the terms
and provisions of this Agreement, except the registration under the
Act of the Stock and such consents, approvals, authorizations,
registrations or qualifications as may be required under the Act or
state securities or Blue Sky laws;
(xi) to such counsel's knowledge, (A) neither the Company nor
any of the Subsidiaries is in breach of, or in default (nor has an
event occurred which, with notice or lapse of time or both, would
constitute a default or acceleration) under the terms and provisions
or conditions of, any indenture, mortgage, deed of trust, bank loan
or credit agreement or any other material agreement or instrument to
which the Company or any of the Subsidiaries is a party or by which
any of them or any of their properties or assets may be bound or
affected (including, without limitation, any agreement or instrument
filed as an exhibit to the Registration Statement or to any document
incorporated by reference in the Registration Statement), except for
any such breaches or defaults which, individually or in the
aggregate, would not reasonably be expected to have a Material
Adverse Effect, and (B) neither the Company nor any of the
Subsidiaries is in violation of any term or provision of (i) its
articles of incorporation, bylaws or declaration of trust, as
applicable, or (ii) any franchise, license, grant, permit, judgment,
decree, order, statute, rule or regulation, except as referred to in
the Prospectus and except for, in the case of clause (ii), any such
violations which, individually or in the aggregate, would not
reasonably be expected to have a Material Adverse Effect;
(xii) the Registration Statement and the Prospectus and any
amendments or supplements thereto (other than the financial
statements, and other financial and statistical data included
therein or any statements or omissions made in reliance upon and in
conformity with written information furnished to the Company by the
Underwriters expressly for use in connection therewith, as to which
no opinion need be rendered) comply as to form in all material
respects with the requirements of the Act and the Regulations; and
(xiii) that such counsel has received oral confirmation by the
staff of the Securities and Exchange Commission that the
Registration Statement has become effective under the Act, and, to
such counsel's knowledge, no proceedings for a stop order are
pending or threatened under the Act.
In addition, such counsel shall state that, although such counsel is
not passing upon the accuracy, completeness or fairness of the statements
contained in the Registration Statement and Prospectus (except to the
extent stated in paragraph (ix)), no facts have come to the attention of
such counsel that lead them to believe that either the Registration
Statement or any amendment thereto at the time such Registration Statement
or amendment became effective contained an untrue statement of a material
fact or omitted to state a material fact required to be stated therein or
necessary to make the statements therein not misleading or that the
Prospectus, as of its date,
15
or any supplement thereto, as of its date, contained an untrue statement
of a material fact or omitted to state a material fact necessary in order
to make the statements therein, in the light of the circumstances under
which they were made, not misleading (it being understood that such
counsel need express no view with respect to the financial statements,
schedules and other financial and statistical data included therein).
Further, with respect to paragraph (ix), such counsel can also state
that it has assumed that the Underwriters, dealers, brokers and agents
offering and selling the Stock are duly registered and licensed in all
relevant jurisdictions to make such offers and sales, and that such
persons have complied with all relevant laws and regulations regarding
sales practices and delivery of prospectuses in connection with such
offers and sales. Further, with respect to paragraph (ix)(C), such counsel
can also state that it has assumed no material misstatements or omissions
of fact have been made in connection with the offer or sale of the Stock.
In rendering the foregoing opinion, such counsel may rely as to
matters not governed by Federal law or the laws of the State of Michigan
on opinions of legal counsel satisfactory to such counsel and upon which,
in such counsel's opinions, you are justified in relying, and as to
matters of fact upon certificates of public officials and officers of the
Company. Copies of all such opinions and certificates shall be furnished
to your counsel on the Closing Date. Such counsel's opinions may be
qualified to the extent that: (i) enforcement of any of the documents
mentioned therein may be limited by Title 11 of the United States Code and
other applicable bankruptcy, insolvency, reorganization or other laws
affecting or limiting the rights of creditors (including, without
limitation, laws pertaining to the avoidance and/or recovery of
preferences or fraudulent conveyances), and to the discretionary nature of
specific performance, injunctive relief and other equitable remedies,
including the appointment of a receiver; (ii) enforcement thereof may be
subject to general principles of equity (regardless of whether such
enforceability is considered to be in equity or at law); (iii) such
counsel may express no opinion as to any provisions purporting to obligate
any party to pay attorneys' fees or other costs of collection or relating
to indemnification against liabilities arising under Federal or state
securities laws; (iv) no opinion is expressed with respect to any
provision in this Agreement authorizing the exercise of "self-help"
remedies, to any provisions constituting a waiver of statutory or
constitutional rights or exculpating a person or entity from liability for
negligence or other misconduct or with respect to the authorization of any
person to reimbursement of expenses (including attorneys' fees) in excess
of an amount deemed reasonable; and (v) the opinions of such counsel are
not intended and shall not be construed to be an opinion on choice of law
or conflicts of law, and such counsel may assume that the law of the State
of Michigan and the federal law of the United States shall govern all
matters which are the subject of this opinion.
(c) On or prior to the Closing Date, you shall have been furnished
such documents, certificates and opinions as you may require for the
purpose of enabling you to review the matters referred to in subsection
(b) of this Section 7, and in order to evidence the accuracy, completeness
or satisfaction of any of the representations, warranties or conditions
herein contained.
16
(d) Prior to the Closing Date, (i) there shall have been no material
adverse change in the condition or prospects or the business activities,
financial or otherwise, of the Company and the Subsidiaries from that as
of the latest date as of which such condition is set forth in the
Registration Statement and Prospectus; (ii) there shall have been no
material transaction, not in the ordinary course of business, entered into
by the Company from the latest date as of which the financial condition of
the Company is set forth in the Registration Statement and Prospectus,
other than transactions referred to or contemplated therein or to which
you have given your written consent; (iii) neither the Company nor any of
the Subsidiaries shall be in default (nor shall an event have occurred
which, with notice or lapse of time, or both, would constitute a default
or acceleration) under any provision of any agreement, understanding or
instrument relating to any outstanding indebtedness to which the Company
or one of the Subsidiaries is a party or by which any of them or their
properties may be bound or affected, which default could materially and
adversely affect the business, operations, prospects or financial
condition or income of the Company and the Subsidiaries, taken as a whole;
(iv) no material amount of the assets of the Company and the Subsidiaries
shall have been pledged or mortgaged, except as set forth in the
Registration Statement and Prospectus; (v) no action, suit or proceeding,
at law or in equity, shall have been pending or threatened against the
Company or any of the Subsidiaries or affecting any of their properties,
assets or businesses before or by any court or Federal, state or other
commission, board or other administrative agency having jurisdiction over
the Company or any of the Subsidiaries wherein an unfavorable decision,
ruling or finding could materially adversely affect the business,
operations, prospects or financial condition or income of the Company and
the Subsidiaries, taken as a whole, except as set forth in the
Registration Statement and Prospectus; (vi) neither the Company nor any of
the Subsidiaries shall have been involved in any labor dispute nor, to the
knowledge of the Company, shall any dispute be threatened which could have
a material adverse effect on the Company and the Subsidiaries, taken as a
whole; and (vii) no stop order shall have been issued under the Act with
respect to the Stock and no proceedings therefor shall have been initiated
or threatened by the Commission.
(e) At the Closing Date, you shall have received a certificate of
the President and the principal financial officer of the Company, dated
the Closing Date, to the effect that the conditions set forth in
subsection (d) above have been satisfied and as to the accuracy, as of the
Closing Date, of the representations and warranties of the Company set
forth in Section 2 hereof.
(f) At the time this Agreement is executed and at the Closing Date,
you shall have received a letter, addressed to the several Underwriters
and in form and substance satisfactory to you in all respects (including
the non-material nature of the changes or decreases, if any, referred to
in clause (iii) below), from Crowe Chizek and Company LLC, dated as of the
date of this Agreement and as of the Closing Date:
(i) confirming that they are independent public accountants
with respect to the Company and the Subsidiaries within the meaning
of the Act and the applicable published Regulations and stating that
the answer to Item 10 of the Registration Statement is correct
insofar as it relates to them;
17
(ii) stating that, in their opinion, the consolidated
financial statements and schedules of the Company audited by them
and the selected financial data to the extent derived from financial
statements examined by them included in the Registration Statement
comply as to form in all material respects with the applicable
accounting requirements of the Act and the related published
Regulations;
(iii) stating that, on the basis of procedures (but not an
examination made in accordance with generally accepted auditing
standards) which included a reading of the latest available
unaudited interim consolidated financial statements of the Company
and the Subsidiaries (with an indication of the date of the latest
available unaudited interim consolidated financial statements), a
reading of the latest available minutes of the meetings of the
shareholders and boards of directors of the Company and the
Subsidiaries and committees of such boards and inquiries to certain
officers, trustees, and other employees of the Company and the
Subsidiaries responsible for financial and accounting matters and
other specified procedures and inquiries, nothing has come to their
attention that would cause them to believe that (A) the unaudited
consolidated financial statements of the Company and the
Subsidiaries included in the Registration Statement and Prospectus
(i) do not comply as to form in all material respects with the
applicable accounting requirements of the Act and the related
published Regulations, or (ii) were not fairly presented in
conformity with generally accepted accounting principles applied on
a basis substantially consistent with that of the audited
consolidated financial statements included in the Registration
Statement and Prospectus, (B) at a specified date not more than five
business days prior to the date of such letter, there was any change
in the capital stock or long-term debt of the Company or decrease in
shareholders' equity of the Company and the Subsidiaries as compared
with the amounts shown on the consolidated balance sheet of the
Company included in the Registration Statement and Prospectus, other
than as set forth in or contemplated by the Registration Statement
and Prospectus or, if there was any change or decrease, setting
forth the amount of such change or decrease, and (C) during the
period from January 1, 2004, to a specified date not more than the
five business days prior to the date of such letter, there was any
decrease in net interest income, net income or income per share of
the Company, as compared with the corresponding period beginning
January 1, 2003, other than as set forth in or contemplated by the
Registration Statement and Prospectus, or, if there was any such
decrease, setting forth the amount of such decrease; and
(iv) stating that they have compared specific dollar amounts,
numbers of shares, percentages of revenues and income and other
financial information pertaining to the Company set forth in the
Prospectus, which have been specified by you prior to the date of
this Agreement, to the extent that such amounts, numbers,
percentages and information may be derived from the general
accounting records of the Company and the Subsidiaries, and
excluding any questions requiring an interpretation by legal
counsel, with the results obtained from the application of specific
readings, inquiries and other appropriate procedures (which
procedures do
18
not constitute an audit in accordance with generally accepted
auditing standards) set forth in the letter, and found them to be in
agreement.
(g) All proceedings taken in connection with the sale of the Stock
as herein contemplated shall be reasonably satisfactory in form and
substance to you and to counsel for you, and you shall have received from
said counsel for you a favorable opinion, dated as of the Closing Date,
with respect to such of the matters set forth under subsection (b) of this
Section 7, and with respect to such other related matters arising after
the date of execution hereof, as you may reasonably require.
(h) No order suspending the sale of the Stock prior to the Closing
Date in any jurisdiction designated by you pursuant to subsection (d) of
Section 5 hereof shall have been issued on the Closing Date, and no
proceedings for that purpose shall have been instituted or to your
knowledge or that of the Company shall be contemplated.
(i) The NASD, upon review of the terms of the public offering of the
Stock, shall have indicated in writing that the NASD has no objections
with respect to the fairness and reasonableness of the underwriting terms
and arrangements.
(j) The Stock shall have been duly listed, subject to notice of
issuance, on the Market, to the extent required by the Market.
Any certificate signed by the president or chief financial officer of the
Company and delivered to you or to counsel for you shall be deemed a
representation and warranty by the Company to you as to the statements made
therein. If any condition to your obligations hereunder to be fulfilled prior to
or at the Closing Date is not so fulfilled, you may terminate this Agreement or,
if you so elect, waive any such conditions which have not been fulfilled or
extend the time for their fulfillment.
8. REPRESENTATIONS OF THE UNDERWRITERS. The Underwriters represent and
warrant to the Company that the information furnished to the Company in writing
by the Underwriters expressly for use in the Registration Statement or the
Prospectus does not, and any amendments thereof or supplements thereto thus
furnished will not contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading. The Company acknowledges that the statements
relating to the terms of the offering by the Underwriters under the caption
"Underwriting" in any Preliminary Prospectus and the Prospectus constitute the
only information furnished in writing by or on behalf of the Underwriters for
inclusion in any Preliminary Prospectus and the Prospectus.
9. INDEMNIFICATION.
(a) Subject to the conditions set forth below, the Company agrees to
indemnify and hold harmless the Underwriters, and each person, if any, who
controls any of them within the meaning of Section 15 of the Act or
Section 20(a) of the Exchange Act, against any and all loss, liability,
claim, damage and expense whatsoever (including but not limited to any and
all expense whatsoever reasonably incurred in investigating, preparing or
19
defending against any litigation, or any claim whatsoever) arising out of
or based upon (i) any untrue statement or alleged untrue statement of a
material fact contained (x) in any Preliminary Prospectus, the
Registration Statement or the Prospectus (as from time to time amended and
supplemented) or (y) in any application or other document (in this Section
9 collectively called "application") executed by the Company or based upon
written information furnished by or on behalf of the Company filed in any
jurisdiction in order to qualify the Stock under the securities laws
thereof or filed with the Commission, the Market or any securities
exchange, or (ii) the omission or alleged omission therefrom of a material
fact required to be stated therein or necessary to make the statements
therein not misleading, provided, however, that the Company will not be
liable in any such case to the extent that any such loss, claim, damage or
liability arises out of or is based upon an untrue statement or alleged
untrue statement, or omission or alleged omission made in the Registration
Statement, the Prospectus, or such amendment or supplement, in reliance
upon and in conformity with written information furnished to the Company
by the Underwriters specifically for use in the preparation thereof. This
indemnity agreement will be in addition to any liability which the Company
may otherwise have.
If any action or proceeding (including any governmental
investigation) is brought against any of the Underwriters or any
controlling person in respect of which indemnity may be sought against the
Company pursuant to the foregoing paragraph, such indemnified party shall
promptly notify in writing the party or parties against whom
indemnification is to be sought of the institution of such action and the
Company shall assume the defense of such action, including the employment
of counsel (satisfactory to the indemnified party) and payment of
expenses. The indemnified party shall have the right to employ its or
their own counsel in any such case, but the fees and expenses of such
counsel shall be at the expense of the indemnified party unless the
employment of such counsel shall have been authorized in writing by the
Company in connection with the defense of such action or the Company shall
not have employed counsel to have charge of the defense of such action, or
counsel for such indemnified party or parties shall have reasonably
concluded that there may be defenses available to it or them which are
different from or additional to those available to the Company (in which
case the Company shall not have the right to direct the defense of such
action on behalf of the indemnified party or parties), in any of which
events such fees and expenses shall be borne by the Company (it being
understood, however, that the Company shall not, in connection with any
one such action or proceeding, be liable for the fees and expenses of more
than one separate firm of attorneys, together with appropriate local
counsel, at any time for all such indemnified parties, which firm shall be
designated in writing by you). Anything in this paragraph to the contrary
notwithstanding, the Company shall not be liable for any settlement of any
such claim or action effected without its written consent. The Company
agrees promptly to notify Oppenheimer of the commencement of any
litigation or proceedings against the Company, any of its officers or
directors in connection with the issue and sale of the Stock or in
connection with such Preliminary Prospectus, Registration Statement or
Prospectus, or any amendment or supplement thereof, or any such
application.
(b) Each Underwriter agrees to indemnify and hold harmless the
Company, each of the directors of the Company, each of the officers of the
Company who shall have signed
20
the Registration Statement and each other person, if any, who controls the
Company within the meaning of Section 15 of the Act or Section 20(a) of
the Exchange Act to the same extent as the foregoing indemnity from the
Company to the several Underwriters, but only with respect to statements
or omissions, or alleged statements or omissions, if any, made in any
Preliminary Prospectus, Registration Statement or Prospectus, or any
amendment or supplement thereto, or any application in reliance upon, and
in conformity with, written information furnished to the Company by such
Underwriter expressly for use in any Preliminary Prospectus, the
Registration Statement or Prospectus or any amendment or supplement
thereto or in any application, as the case may be. In case any action
shall be brought against the Company, or any other person so indemnified,
based on any Preliminary Prospectus, the Registration Statement or
Prospectus or any amendment or supplement thereto or any application, and
in respect of which indemnity may be sought against any Underwriter, such
Underwriter shall have the rights and duties given to the Company, and the
Company, and each other person so indemnified shall have the rights and
duties given to the Underwriters, by the provisions of subsection (a)
above. This indemnity will be in addition to any liability which any
Underwriter may otherwise have.
(c) No indemnification provided for in (a) or (b) above shall be
available to any party who shall fail to give notice as provided in such
sections if the party to whom notice was not given was unaware of the
proceeding to which such notice would have related and was materially
prejudiced by the failure to give such notice, but the failure to give
such notice shall not relieve the indemnifying party or parties from any
liability which it or they may have to the indemnified party for
contribution or otherwise than on account of the provisions of (a) or (b)
above. Any losses, claims, damages, liabilities or expenses for which an
indemnified party is entitled to indemnification or contribution under
this Section 9 shall be paid by the indemnifying party to the indemnified
party as such losses, claims, damages, liabilities or expenses are
incurred.
(d) If the indemnification provided for in this Section 9 is
unavailable to or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to therein, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or
liabilities (or actions in respect thereof) in such proportion as is
appropriate to reflect the relative benefits received by the Company on
the one hand and the Underwriters on the other from the offering of the
Stock. If, however, the allocation provided by the immediately preceding
sentence is not permitted by applicable law, then each indemnifying party
shall contribute to such amount paid or payable by such indemnified party
in such proportion as is appropriate to reflect not only such relative
benefits but also the relative fault of the Company on the one hand and
the Underwriters on the other in connection with the statements or
omissions which resulted in such losses, claims, damages or liabilities
(or actions in respect thereof), as well as any other relevant equitable
considerations. The relative benefits received by the Company on the one
hand and the Underwriters on the other shall be deemed to be in the same
proportion as the total net proceeds from the offering (before deducting
expenses) received by the Company bear to the total underwriting discounts
and commissions received by the Underwriters, in each case as set forth in
the table on the cover page of the Prospectus. The
21
relative fault shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to
information supplied by the Company on the one hand or the Underwriters on
the other and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or
omission. The Company and the Underwriters agree that it would not be just
and equitable if contribution pursuant to this subsection (d) were
determined by pro rata allocation or by any other method of allocation
which does not take account of the equitable considerations referred to
above in this subsection (d). The amount paid or payable by an indemnified
party as a result of the losses, claims, damages or liabilities (or
actions in respect thereof) referred to above in this subsection (d) shall
be deemed to include 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 subsection
(d), the Underwriters shall not be required to contribute any amount in
excess of the amount by which the total price at which the Stock
underwritten by it and distributed to the public was offered to the public
exceeds the amount of any damages which such Underwriter has otherwise
been required to pay by reason of such untrue or alleged untrue statement
or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act or
Section 10(b) of the Exchange Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentations.
10. REPRESENTATIONS AND AGREEMENTS TO SURVIVE DELIVERY. Except as the
context otherwise requires, all representations, warranties and agreements
contained in this Agreement shall be deemed to be representations, warranties
and agreements at the Closing Date, and such representations, warranties and
agreements of the Underwriters and the Company, including the indemnity and
contribution agreements contained in Section 9 hereof, shall remain operative
and in full force and effect regardless of any investigation made by or on
behalf of any Underwriter or any controlling person, or by or on behalf of the
Company or any controlling person, and shall survive termination of this
Agreement and/or delivery of the Stock to the Underwriters In addition, the
covenants contained in Section 5 hereof, the agreements contained in this
Section 10 and in Sections 6, 11, 13 and 14 hereof and the indemnity and
contribution agreements contained in Section 9 hereof shall survive termination
of this Agreement, whether before or after the Closing Date.
11. TERMINATION.
(a) Oppenheimer (on behalf of the Underwriters) shall have the right
to terminate this Agreement at any time prior to the Closing Date if: any
domestic or international event or act or occurrence has materially
disrupted, or in your opinion will in the immediate future materially
disrupt, securities markets; or if trading in securities is suspended
generally on the New York Stock Exchange, the American Stock Exchange or
the Market or price limitations are imposed (other than limitations on
hours or numbers of days of trading) for securities on either such
Exchange; or if any statute, regulation, rule or order of any court or
other governmental authority has been enacted, published, decreed or
otherwise promulgated will, in your reasonable judgment, materially and
adversely affect or may materially and adversely affect the business or
operations of the Company; there is any outbreak or escalation of
hostilities or declaration of war or national emergency or other
22
national or international calamity or crisis or change in economic or
political conditions if the effect of such outbreak, escalation,
declaration, emergency, calamity, crisis or change on the financial
markets of the United States would, in your reasonable judgment, make it
impracticable or inadvisable to market the Stock or to enforce contracts
for the sale of the Stock; or if a banking moratorium has been declared by
a state or federal authority; or if a moratorium in foreign exchange
trading by major international banks or persons has been declared; or if
the Company shall have sustained a material or substantial loss by fire,
flood, accident, hurricane, earthquake, theft, sabotage or other calamity
or malicious act which, whether or not said loss shall have been insured,
will in your opinion, make it inadvisable to proceed with the delivery of
the Stock; or if there shall have been such material change in the
condition, business operations or prospects of the Company or the market
for its and similar securities as in your judgment would make it
inadvisable to proceed with the offering, sale and delivery of the Stock;
or if the Company shall have failed to comply with any of the provisions
of this Agreement on its part to be performed on or before the Closing
Date; or if any of the material conditions, agreements, representations or
warranties in this Agreement shall not have been fulfilled within the
respective times herein provided.
(b) If Oppenheimer elects to prevent this Agreement from becoming
effective or to terminate this Agreement as provided in this Section 11,
the Company shall be notified promptly by Oppenheimer by telephone or
facsimile, confirmed by letter. If the Company elects to prevent this
Agreement from becoming effective, Oppenheimer shall be notified promptly
by the Company by telephone or facsimile, confirmed by letter.
(c) If this Agreement is terminated pursuant to any of its
provisions, except as otherwise provided in this Agreement, the Company
shall not be under any liability to any Underwriter (other than for
obligations assumed in Section 5 hereof), and no Underwriter shall be
under any liability to the Company; provided, however, that if this
Agreement is terminated by Oppenheimer because of any failure, refusal or
inability on the part of the Company to comply with the terms or to
fulfill any of the conditions of this Agreement, or for any reason
provided in subparagraph (a) above, the Company will reimburse the
Underwriters for all accountable out-of-pocket expenses (including,
without limitation, road show expenses and fees and disbursements of
counsel to the Underwriters) up to a maximum of $50,000 in aggregate
amount incurred by them in connection with the proposed purchase and sale
of the Stock or in contemplation the performing its obligations hereunder.
Notwithstanding any election hereunder or any termination of this
Agreement, and whether or not this Agreement is otherwise carried out, the
provisions of Section 9 shall not be in any way affected by such election or
termination or failure to carry out the terms of this Agreement or any part
hereof.
12. NOTICES. All communications hereunder, except as herein otherwise
specifically provided, shall be in writing and, if sent to you, shall be mailed,
delivered or telegraphed and confirmed to the Underwriters care of Oppenheimer &
Co. Inc., 300 River Place, Suite 400, Detroit, Michigan 48207, Attention: Jason
D. Janosz, with a copy to Liesl A. Maloney, Esq., Honigman Miller Schwartz and
Cohn, 2290 First National Building, Detroit, Michigan 48226; if sent to the
23
Company shall be mailed, delivered or telegraphed and confirmed to Dearborn
Bancorp, Inc., 1360 Porter Street, Dearborn, Michigan 48124, Attention:
President, with a copy to Verne C. Hampton II, Esq., Dickinson Wright PLLC, 500
Woodward Avenue, Suite 4000, Detroit, Michigan 48226-3425.
13. PARTIES. This Agreement shall inure solely to the benefit of, and
shall be binding upon, the several Underwriters, the Company, and the
controlling persons, directors and officers referred to in Section 9 hereof, and
their respective successors, legal representatives and assigns, and no other
person shall have or be construed to have any legal or equitable right, remedy
or claim under or in respect of or by virtue of this Agreement or any provision
herein contained.
14. CONSTRUCTION. The laws of the State of Michigan shall govern this
Agreement, its construction, and the determination of any rights, duties or
remedies of the parties arising out of or relating to this Agreement. The
parties acknowledge that the United States District Court for the Eastern
District of Michigan or the Michigan Circuit Court for the County of Wayne shall
have exclusive jurisdiction over any case or controversy arising out of or
relating to this Agreement and that all litigation arising out of or relating to
this Agreement shall be commenced in the United States District Court for the
Eastern District of Michigan or in the Wayne County (Michigan) Circuit Court.
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If the foregoing correctly sets forth the understanding among the several
Underwriters and the Company, please so indicate in the space provided below for
that purpose, whereupon this letter shall constitute a binding agreement among
us.
Very truly yours,
DEARBORN BANCORP, INC.
By: /s/ Jeffrey L. Karafa
------------------------------------
Jeffrey L. Karafa
Its: Vice-President and Treasurer
Accepted as of the date first
above written.
OPPENHEIMER & CO. INC.,
For itself and as Representative
of the several Underwriters
By: /s/ Jason D. Janosz
-------------------------------
Jason D. Janosz
Its: Senior Vice President
HOWE BARNES INVESTMENTS INC.,
For itself and as Representative
of the several Underwriters
By: /s/ Glenn C. Harris
-------------------------------
Glenn C. Harris
Its: Senior Vice President
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SCHEDULE I
Oppenheimer & Co. Inc. 948,750
Howe Barnes Investments Inc. 316,250
---------
Total 1,265,000
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SCHEDULE II
Dearborn Bancorp Trust I, a Delaware statutory trust which is 100% owned by the
Company.
Community Bank of Dearborn, a Michigan banking corporation which is 100% owned
by the Company (the "Bank").
Community Bank Mortgage, Inc., a Michigan corporation which is 100% owned by the
Bank.
Community Bank Audit Services, Inc., a Michigan corporation which is 100% owned
by the Bank.
Community Bank Insurance Agency, Inc., a Michigan corporation which is 100%
owned by the Bank.
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SCHEDULE III
Community Bank Insurance Agency, Inc., a Subsidiary, owns 8.74% of Michigan
Bankers Title of East Michigan, LLC.
DET_B.429767.10
28