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EXHIBIT 1
FIRSTMERIT CORPORATION
1,380,000 Shares(1)
UNDERWRITING AGREEMENT
September , 1998
XxXXXXXX & COMPANY SECURITIES, INC.
XXXXX, XXXXXXXX & XXXXX, INC.
c/x XxXXXXXX & COMPANY SECURITIES, INC.
XxXxxxxx Investment Center
000 Xxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000-0000
Gentlemen:
FirstMerit Corporation, an Ohio corporation (the "Company") and the
record and beneficial owner of all of the issued and outstanding shares of
capital stock of FirstMerit Bank, N.A., a national banking organization (the
"Bank"), desires to sell to the public in a public offering 1,200,000 shares of
its common stock, without par value (the "Common Stock"), and wishes to retain
your services in such offering. Upon the terms and subject to the conditions
hereof, the Company hereby confirms its agreement with you as follows:
1. Underwriters. As used herein, the term "Underwriters" will mean and
refer to you in your capacity as underwriter for the offering of the shares of
Common Stock referred to herein. Except as may be expressly set forth below, any
reference to you in this Agreement shall be solely in your capacity as an
Underwriter.
2. Shares Offered. The Company proposes to sell to the several
Underwriters as set forth on Schedule A an aggregate of 1,200,000 shares of
Common Stock from the Company's treasury. Such 1,200,000 shares of Common Stock
proposed to be sold by the Company are hereinafter referred to as the "Firm
Shares." In addition, the Company proposes to grant to the Underwriters an
Option (as hereinafter defined) to purchase up to an additional 180,000 shares
of
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1 Includes an option to purchase from the Company up to 180,000 additional
shares of Common Stock, solely to cover over-allotments.
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Common Stock from the Company's treasury (the "Option Shares") on the terms and
for the purposes set forth in Section 4(b) hereof. The Firm Shares and the
Option Shares are hereinafter sometimes together called the "Shares." The Shares
are more fully described in the Registration Statement and Prospectus (as
hereinafter defined) and also include the associated rights under the FirstMerit
Shareholder Rights Agreement.
3. Representations and Warranties of the Company. The Company
represents and warrants to the Underwriters that:
(a) The Company has prepared a Registration Statement on Form
S-3 (File No. 333-62567) relating to the Shares, including a
Preliminary Prospectus (as hereinafter defined), in conformity with the
requirements of the Securities Act of 1933, as amended (the "Act"), and
the rules, regulations and instructions (the "Rules and Regulations")
of the Securities and Exchange Commission (the "Commission"),
thereunder and has filed such Registration Statement with the
Commission. The Company complies with the conditions for the use of
Form S-3. [One or more amendments to such Registration Statement,
including, in each case, a revised Preliminary Prospectus, have been so
prepared and filed.] If such Registration Statement has not become
effective as of the execution and delivery of this Agreement, and the
filing of a further amendment (the "Final Amendment") to such
Registration Statement is necessary to permit such Registration
Statement to become effective, such amendment will be filed promptly by
the Company with the Commission. If such Registration Statement has
become effective and any post-effective amendment has been filed with
the Commission prior to the execution and delivery of this Agreement,
the most recent post-effective amendment has been declared effective by
the Commission. If such Registration Statement has become effective and
the Prospectus included as part of the Registration Statement at the
time it became effective omitted information permitted to be omitted by
Rule 430A of the Rules and Regulations ("Rule 430A Information"), a
final Prospectus (the "Rule 430A Prospectus") containing all required
Rule 430A Information will promptly be filed by the Company pursuant to
Rule 424(b) of the Rules and Regulations.
The term "Preliminary Prospectus" as used herein means any
form of prospectus (as referred to in Rule 430 of the Rules and
Regulations) with respect to the Shares included, at any time, as part
of such Registration Statement or filed with the Commission, pursuant
to Rule 424(a) of the Rules and Regulations, prior to such Registration
Statement's being declared effective. The Registration Statement
referred to in this subsection (a), as amended at the time that it
becomes or became effective, or, if applicable, as amended at the time
the most recent post-effective amendment to such Registration Statement
filed with the Commission prior to the time the execution and delivery
of this Agreement became effective, including financial statements and
all exhibits and other information (whether filed or incorporated by
reference) deemed to be part thereof at such time pursuant to Rule 430A
of the Rules and Regulations is herein called the "Registration
Statement." The final Prospectus relating to the Shares in the form
first filed with the Commission pursuant to Rule 424(b)(1) or (4) of
the Rules and Regulations or, if no such filing is required, the form
of final prospectus included in the
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Registration Statement at the Effective Date (as hereinafter defined)
is herein called the "Prospectus." The date on which the Registration
Statement becomes effective is herein called the "Effective Date." As
used herein, the terms "Registration Statement," "Prospectus" and
"Preliminary Prospectus" shall include in each case the documents, if
any, incorporated by reference therein.
(b) When the Registration Statement becomes effective, and at
all subsequent times to and including the Closing Time (as hereinafter
defined) and at the Option Closing Time (as hereinafter defined), or
for such longer period as the Prospectus may be required by the Act or
the Rules and Regulations or the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), or the rules and regulations promulgated
thereunder to be delivered in connection with sales of the Shares by
the Underwriters or a dealer, the Registration Statement and the
Prospectus (as amended or as supplemented if the Company shall have
filed with the Commission any amendment thereof or supplement thereto)
will comply with the requirements of the Act and the Rules and
Regulations, will contain all statements required to be stated therein
in accordance with the Act and the Rules and Regulations, will not
contain an untrue statement of a material fact and will not omit to
state a material fact required to be stated therein or necessary in
order to make the statements therein, in the light of the circumstances
under which they were made, not misleading; provided, however, that the
representations and warranties in this subsection (b) do not apply to
statements or omissions in the Registration Statement or the Prospectus
based upon and made in conformity with written information furnished to
the Company through or on behalf of an Underwriter specifically for
inclusion therein.
(c) The Commission has not issued an order preventing or
suspending the use of any Preliminary Prospectus with respect to the
Shares and has not instituted or, to the Company's knowledge,
threatened to institute any proceedings with respect to such an order.
Each Preliminary Prospectus, when filed with the Commission, conformed
in all material respects with the requirements of the Act and the Rules
and Regulations, complied with the requirements of the Act and the
Rules and Regulations, contained all statements as required by the Act
and the Rules and Regulations and, as of its date, did not include any
untrue statement of a material fact or omit to state a material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided,
however, that the representations and warranties in this subsection (c)
do not apply to statements or omissions in each such Preliminary
Prospectus based upon and made in conformity with written information
furnished to the Company through or on behalf of an Underwriter
specifically for inclusion therein.
(d) The documents incorporated by reference into the
Preliminary Prospectus, the Prospectus or the Registration Statement
heretofore filed, when they were filed (or, if any amendment with
respect to any such document was filed, when such document was filed),
conformed in all material respects with the requirements of the
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Exchange Act and the rules and regulations promulgated thereunder, any
additional documents so filed will, when they are filed, conform in all
material respects with the requirements of the Exchange Act and the
rules and regulations promulgated thereunder; no such document when it
was filed (or, if an amendment with respect to any such document was
filed, when such amendment was filed), contained an untrue statement of
material fact or omitted to state a 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; and no
additional document so filed, when it is filed will contain an untrue
statement of material fact or omit to state a 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.
(e) The Company is, and at the Closing Time and at the Option
Closing Time will be, a corporation duly organized, validly existing
and in good standing under the laws of the State of Ohio. The Company
has, and at the Closing Time and at the Option Closing Time will have,
the power and authority (corporate, governmental, regulatory and
otherwise) and has or will have all necessary approvals, orders,
licenses, certificates, permits and other governmental authorizations
(collectively, the "Authorizations") to own or lease all of the assets
owned or leased by it and to conduct its business as described in the
Registration Statement and the Prospectus, except where the failure to
have any Authorization would not have a material adverse effect on the
condition (financial or otherwise), assets, business, properties,
prospects or results of operations of the Company and its Subsidiaries,
taken as a whole (a "Material Adverse Effect"). The Company is, and at
the Closing Time and at the Option Closing Time will be, duly licensed
or qualified to do business and in good standing as a foreign
corporation in all jurisdictions (i) in which the nature of the
activities conducted by the Company requires such qualification and
(ii) in which the Company owns or leases real property, except where
the failure to be so licensed or qualified would not have a Material
Adverse Effect. The Articles of Incorporation and Code of Regulations
of the Company comply in all material respects with applicable law. A
complete and correct copy of the Articles of Incorporation and the Code
of Regulations of the Company, in each case as amended and as currently
in effect, have been delivered or made available to you or your
counsel, and no changes therein will be made subsequent to the date
hereof and prior to the expiration of the Option. The entities set
forth on Schedule B (each a "Subsidiary" and collectively, the
"Subsidiaries") are the only subsidiaries of the Company.
(f) The Bank is, and at the Closing Time and at the Option
Closing Time will be, a bank duly organized, validly existing and in
good standing under the laws of the United States. The deposit accounts
of the Bank are insured up to applicable limits by the Federal Deposit
Insurance Corporation (the "FDIC"), and no proceedings for the
termination or revocation of such insurance are pending or, to the
knowledge of the Company or the Bank, threatened. The Bank has, and at
the Closing Time and at the Option Closing Time will have, the power
and authority (corporate, governmental, regulatory and otherwise) and
has or will have all necessary Authorizations to own or lease all of
the assets owned or leased by it and to conduct its business as
described in the Registration Statement and the Prospectus and each
document incorporated by reference into the Prospectus, except where
the failure to have any Authorization would not have a
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Material Adverse Effect. The Bank is, and at the Closing Time and at
the Option Closing Time will be, duly licensed or qualified to do
business and in good standing as a foreign corporation in all
jurisdictions (i) in which the nature of the activities conducted by
the Bank requires such qualification and (ii) in which the Bank owns or
leases real property, except where the failure to be so licensed or
qualified would not have a Material Adverse Effect. The Articles of
Association and By-laws of the Bank comply in all material respects
with applicable law. A complete and correct copy of the Articles of
Association and the By-laws of the Bank, in each case as amended and as
currently in effect, have been delivered or made available to you or
your counsel, and no changes therein will be made subsequent to the
date hereof and prior to the expiration of the Option.
(g) Each Subsidiary other than the Bank (a "Non-Bank
Subsidiary") is, and at the Closing Time and at the Option Closing Time
will be, a corporation duly organized, validly existing and in good
standing under the laws of the state set forth opposite the name of
such Non-Bank Subsidiary on Schedule B. Each Non-Bank Subsidiary has,
and at the Closing Time and at the Option Exercise Time will have, the
power and authority (corporate, governmental, regulatory and otherwise)
and has or will have all necessary Authorizations to own or lease all
of the assets owned or leased by it and to conduct its business as
described in the Registration Statement and the Prospectus, except
where the failure to have any Authorization would not have a Material
Adverse Effect. Each Non-Bank Subsidiary is, and at the Closing Time
and at the Option Exercise Time will be, duly licensed or qualified to
do business and in good standing as a foreign corporation in all
jurisdictions (i) in which the nature of the activities conducted by
such Non-Bank Subsidiary requires such qualification and (ii) in which
such Non-Bank Subsidiary owns or leases real property, except where the
failure to be so licensed or qualified would not have a Material
Adverse Effect. The charter documents of each Non-Bank Subsidiary
comply in all material respects with applicable law. A complete and
correct copy of such charter documents, in each case as amended and as
currently in effect, have been delivered or made available to you or
your counsel, and no changes therein will be made subsequent to the
date hereof and prior to the expiration of the Option.
(h) This Agreement has been duly and validly authorized,
executed and delivered on behalf of the Company and constitutes a valid
and binding obligation of the Company, enforceable against the Company
in accordance with its terms, subject to bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and similar laws of
general applicability relating to or affecting creditors' rights and to
general equity principles, except as rights to indemnity and
contribution hereunder may be limited by applicable law.
(i) At the Closing Time and at the Option Closing Time, the
Company will be authorized to issue only 160,000,000 shares of Common
Stock, and 7,000,000 shares of series preferred stock, without par
value (the "Series Preferred Stock"). At the Closing Time and the
Option Closing Time, the Company will have issued and outstanding,
fully paid and nonassessable, ________________ shares of Common Stock
and no shares of Series Preferred Stock. At the Closing Time and at the
Option Closing Time, the Company will
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have only _____ shares of Common Stock authorized and reserved for
issuance pursuant to the exercise of options and warrants pursuant to
the Company's employee stock plans in existence on the date hereof,
without giving effect to the exercise after the date hereof of any such
options or warrants. Subsequent to the date hereof and prior to the
Closing Time and the Option Closing Time, the Company will not issue
any securities except for the issuance of shares of Common Stock
pursuant to existing stock option, purchase and compensation plans of
the Company, or upon conversion of any currently outstanding
convertible securities of the Company or the issuance of shares of
Common Stock as consideration for the acquisition of one or more
businesses including the acquisitions of Security First Corp.
("Security First") and Signal Corp ("Signal"). Except as contemplated
by this Agreement and as set forth or incorporated by reference in the
Registration Statement and the Prospectus, the Company does not have
outstanding, and at the Closing Time and at the Option Closing Time the
Company will not have outstanding, any options to purchase, or any
rights or warrants to subscribe for, or any securities or obligations
convertible into, or any contracts or commitments to issue or sell
shares of capital stock or any warrants, convertible securities or
obligations, other than options pursuant to existing stock option,
purchase and compensation plans of the Company.
(j) The consolidated financial statements of the Company
(including the notes thereto) filed with and as part of the
Registration Statement and the Prospectus, or incorporated by reference
therein, fairly present the financial position of the Company as of the
respective dates thereof and the consolidated results of operations,
cash flows and shareholders' equity of the Company for the respective
periods indicated, have been prepared in conformity with generally
accepted accounting principles applied on a basis consistent with prior
periods (except as otherwise described in the notes thereto), and
comply as to form in all material respects with any applicable
accounting requirements of the Commission, the Board of Governors of
the Federal Reserve System (the "Federal Reserve"), the Office of the
Comptroller of the Currency (the "OCC") and the FDIC.
PricewaterhouseCoopers L.L.P. (the "Company's Accountants"), has
audited and reported on such consolidated financial statements and is a
firm of independent certified public accountants within the meaning of
the Code of Professional Conduct of the American Institute of Certified
Public Accountants, as required by the Act and the Rules and
Regulations. The financial information and data set forth in the
Prospectus are fairly presented and were prepared on a basis consistent
with such financial statements or the books and records of the Company,
as the case may be. No financial statements or schedules are required
to be included in the Registration Statement or the Prospectus which
are not included therein.
(k) The financial and statistical information and data set
forth or incorporated by reference in the Prospectus under the captions
"PROSPECTUS SUMMARY, "BUSINESS OF FIRSTMERIT," "MARKET PRICE AND
DIVIDEND INFORMATION," "CAPITALIZATION," "SELECTED CONSOLIDATED
FINANCIAL DATA," "HISTORICAL FINANCIAL DATA," "COMPARATIVE PER SHARE
DATA (UNAUDITED)," and "PRO FORMA FINANCIAL INFORMATION"
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are true and correct in all material respects and, as to the financial
information, are prepared on a basis consistent with the audited
consolidated financial statements of the Company.
(l) Subsequent to the respective dates as of which information
is set forth or incorporated by reference in the Registration Statement
and the Prospectus and at all times prior to the expiration of the
Option, except as set forth in or contemplated by the Registration
Statement and the Prospectus, (i) the Company has conducted its
business in substantially the same manner as on June 30, 1998; (ii) the
Company has not incurred any material liabilities or obligations,
direct or contingent, or entered into any material transactions not in
the ordinary course of business, other than agreements to merge with or
acquire a direct or indirect controlling interest in any financial
institution; and (iii) there has not been any change in the
capitalization of the Company or any other change which would have a
Material Adverse Effect.
(m) There are no actions, suits or proceedings at law or in
equity pending or, to the knowledge of the Company, threatened against
the Company or any of its Subsidiaries or any of their respective
assets or any of their respective officers or directors in their
respective capacity as such before or by any federal, state, county or
local court, commission, regulatory body, arbitration panel,
administrative agency or other governmental body, domestic or foreign,
wherein an unfavorable ruling, decision or finding could have a
Material Adverse Effect. Neither the Company nor any of its
Subsidiaries is involved in any labor dispute nor, to the Company's
knowledge, is any such dispute threatened, which dispute could have a
Material Adverse Effect.
(n) Neither the Company nor the Bank is in violation of any
rule or regulation of the Commission, the Federal Reserve, the OCC or
the FDIC, which would have a Material Adverse Effect on the condition
(financial or otherwise), operations, business, assets or properties of
the Company and its Subsidiaries, taken as a whole. Neither the Company
nor the Bank is subject to any directive from the Federal Reserve, the
OCC or the FDIC to make any change in the method of conducting its
business or affairs, and the Company and the Bank have conducted their
business in compliance with all applicable statutes and regulations
(including, without limitation, all regulations, decisions, directives
and orders of the Federal Reserve, the OCC and the FDIC), except where
the failure to so comply would not have a Material Adverse Effect.
Except as set forth or incorporated by reference in the Prospectus,
there is no pending or, to the knowledge of the Company, threatened
litigation, charge, investigation, action, suit or proceeding before or
by any court, regulatory authority or governmental agency or body
which, individually or in the aggregate, would affect the performance
of the terms and conditions of this Agreement or the consummation of
the transactions contemplated hereby or which, individually or in the
aggregate, would have a Material Adverse Effect.
(o) There has been no material adverse change in the condition
(financial or otherwise), assets, business, properties, prospects or
results of operations of the Company and its Subsidiaries, taken as a
whole, since the latest date as of which such condition is
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set forth or incorporated by reference in the Prospectus, except as
referred to therein. The capitalization, assets, properties and
business of the Company and its Subsidiaries conform in all material
respects to the descriptions thereof contained or incorporated by
reference in the Prospectus as of the date specified. Subsequent to the
respective dates as of which information is set forth or incorporated
by reference in the Prospectus, except as otherwise may be indicated
therein (including without limitation the acquisitions of Security
First and Signal), neither the Company nor any of its Subsidiaries has
issued any securities or incurred any liability or obligation, direct
or contingent, for borrowed money, except borrowings in the ordinary
course of business, or entered into any other transaction not in the
ordinary course of business, which is material in light of the
businesses and properties of the Company and its Subsidiaries, taken as
a whole. Neither the Company nor any of its Subsidiaries has knowledge
of any material contingent liabilities of any kind, except as set forth
or incorporated by reference in the Prospectus.
(p) Except as set forth or incorporated by reference in the
Prospectus, no material default (or event which, with notice or lapse
of time, or both, would constitute a material default) exists on the
part of either the Company or any of its Subsidiaries or, to their
knowledge, on the part of any other party, in the due performance and
observance of any term, covenant or condition of any material agreement
to which the Company or any Subsidiary is a party or by which any of
them or any of their respective properties are bound and which is
material to the condition (financial or otherwise) of the Company and
its Subsidiaries, taken as a whole. Such agreements are in full force
and effect, and no other party to any such agreement has instituted or,
to the knowledge of the Company, threatened any action or proceeding
wherein the Company or any of its Subsidiaries is or would be alleged
to be in default thereunder, under circumstances where such action or
proceeding, if determined adversely to the Company or any of its
Subsidiaries, would have a Material Adverse Effect.
(q) Neither the Company nor any of its Subsidiaries is in
violation of its respective Articles of Incorporation, Articles of
Association, Code of Regulations or By-laws, in each case as amended as
of the date hereof, or is in default, in any material respect, in the
performance of any material obligations, agreement or condition
contained in any bond, debenture, note or any other evidence of
indebtedness by which it or any of its respective properties is bound.
The execution, delivery and fulfillment of the terms of this Agreement
and the consummation of the transactions contemplated hereby do not and
will not (i) violate or conflict with the respective Articles of
Incorporation, Articles of Association, Code of Regulations or By-laws
of the Company or any of its Subsidiaries, (ii) violate, conflict with
or constitute a breach of, or default (or an event which, with notice
or lapse of time, or both, would constitute a default) under, any
agreement, indenture or other instrument to which the Company or any of
its Subsidiaries is a party, (iii) result in a breach or violation of
any of the terms and provisions of, or constitute a default (or give
rise to a state of facts which, with notice or lapse of time, or both,
would constitute a default) under or result in the creation or
imposition of any lien, charge or encumbrance upon the assets or
properties of the Company or any of its Subsidiaries, pursuant to any
indenture, mortgage, deed of trust, voting trust agreement,
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loan agreement, letter of credit agreement, bond, debenture, note
agreement or other evidence of indebtedness, lease, contract or other
agreement or instrument to which the Company or any of its Subsidiaries
is a party or by which the Company, any of its Subsidiaries or any of
their respective properties are bound, or (iv) violate or conflict with
any governmental license or permit held by the Company or any of its
Subsidiaries, or any law, administrative regulation or authorization,
approval, court decree, injunction or order to which the Company or any
of its Subsidiaries is subject or by which the Company, any of its
Subsidiaries or any of their respective properties are bound; except
such breaches, violations or defaults as would not have a Material
Adverse Effect. The documentation (the "Loan Documentation") governing
or relating to the loan and credit-related assets representing the loan
portfolio of the Bank is legally sufficient in all material respects
for the purposes intended thereby and creates enforceable rights of the
Bank in accordance with the terms of such Loan Documentation, subject
to applicable bankruptcy, insolvency, reorganization and moratorium
laws and other laws of general applicabiliy affecting the enforcement
of creditors' rights generally, and the effect of rules of law
governing specific performance, injunctive relief and other equitable
remedies on the enforceability of such documents, except where any such
failure that would not have a Material Adverse Effect.
(r) The Company and its Subsidiaries have, and at the Closing
Time and at the Option Closing Time will have, complied in all material
respects, except as described or incorporated by reference in the
Prospectus, with all laws, regulations, ordinances and orders relating
to public health, safety or the environment (including without
limitation all laws, regulations, ordinances and orders relating to
releases, discharges, emissions or disposals to air, water, land or
groundwater, to the withdrawal or use of groundwater, to the use,
handling or disposal of polychlorinated biphenyls, asbestos or urea
formaldehyde, to the treatment, storage, disposal or management of
hazardous substances, pollutants or contaminants, or to exposure to
toxic, hazardous or other controlled, prohibited or regulated
substances) with respect to any properties previously or currently
owned or operated by the Company or any of its Subsidiaries, the
violation of which would or would reasonably be anticipated to have a
Material Adverse Effect on the consummation of the transactions
contemplated by this Agreement. In addition, and irrespective of such
compliance, neither the Company nor any of its Subsidiaries is known or
would reasonably be anticipated to be subject to any liability for
environmental remediation or clean-up under the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as
amended, or the Resource Conservation and Recovery Act of 1976, as
amended, which liability would or would reasonably be anticipated to
have a Material Adverse Effect, or would or would reasonably be
anticipated to affect the consummation of the transactions contemplated
by this Agreement.
(s) The Company and each of its Subsidiaries (i) keeps books,
records and accounts that, in reasonable detail, accurately and fairly
reflect the transactions and dispositions of the assets of the Company
and each of its Subsidiaries, and (ii) maintains a system of internal
accounting controls sufficient to provide reasonable assurances that
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(A) transactions are executed in accordance with management's general
or specific authorization, (B) transactions are recorded as necessary
to permit preparation of financial statements in conformity with
generally accepted accounting principles and to maintain accountability
for assets, (C) access to assets is permitted only in accordance with
management's general or specific authorization and (D) the recorded
accountability for assets is compared with the existing assets at
reasonable intervals and appropriate action is taken with respect to
any differences. Neither the Company nor any of its Subsidiaries has
made any payment to any state, federal or foreign governmental officer
or official or other person charged with similar public or quasi-public
duties (other than payments required or permitted by the laws of the
United States or any jurisdiction thereof.)
(t) The issued and outstanding shares of Common Stock and the
Shares have been duly authorized and validly issued, and are fully paid
and nonassessable and not subject to preemptive rights. The holders of
shares of Common Stock will not be subject to personal liability for
the obligations of the Company solely by reason of being such holders.
The shares of Common Stock and the Shares conform, and at the Closing
Time and at the Option Closing Time, will conform, to all statements
with regard thereto contained or incorporated by reference in the
Registration Statement and the Prospectus.
(u) All of the issued and outstanding shares of capital stock
of each of the Subsidiaries have been duly authorized and validly
issued, are fully paid and non-assessable and are owned by the Company,
free and clear of any liens, charges, encumbrances or restrictions,
except as set forth or incorporated by reference in the Prospectus.
Except for shares of capital stock of the Subsidiaries and except as
described in or referred to in the Prospectus or any document
incorporated by reference in the Prospectus, the Company does not own,
and at the Closing Time and at the Option Closing Time will not own,
any shares of capital stock or any other equity securities of any
corporation or have any equity interest in any firm, partnership or
other entity, such that any such corporation, firm, partnership or
other entity would constitute an affiliate of the Company (as defined
in the Rules and Regulations).
(v) No consent, approval, authorization or order of any court
or governmental agency or body is required for the consummation by the
Company of the transactions contemplated by this Agreement, except such
as may be required under the Act, the Exchange Act or under state
securities or Blue Sky laws or except such as have been obtained.
(w) The Company and each of the Subsidiaries have good and
marketable title to all material properties and assets described in the
Prospectus or any document incorporated by reference in the Prospectus
as owned by them, free and clear of all liens, charges, encumbrances or
restrictions, except such as are described in or referred to in the
Prospectus or any document incorporated by reference in the Prospectus
or such as would not have a Material Adverse Effect. The Company and
each of the Subsidiaries have valid, subsisting and enforceable leases
for the properties reflected in the Prospectus or
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any document incorporated by reference in the Prospectus as leased by
them, except as enforceability may be limited by general equitable
principles, bankruptcy, insolvency, moratorium, reorganization or other
laws affecting creditors' rights generally, none of which limitations
would have a Material Adverse Effect.
(x) There is no document or contract of a character required
to be described in the Prospectus or to be filed as an exhibit to the
Registration Statement which is not described in the Prospectus or a
document incorporated by reference therein or filed as required. No
statement, representation, warranty or covenant made by the Company in
this Agreement or in any certificate or document required by this
Agreement to be delivered to you is, was when made or, as of the
Closing Time and the Option Closing Time, will be, inaccurate, untrue
or incorrect. No transaction has occurred between or among the Company
or any Subsidiary and any of their respective officers, directors,
shareholders or affiliates (as defined in the Rules and Regulations) or
any affiliate of any such officer, director or shareholder that is
required by the Act or the Rules and Regulations to be described in,
and is not described in, the Registration Statement, the Prospectus or
the documents incorporated by reference therein.
(y) The Company and its Subsidiaries own or possess all
patents, patent rights, licenses, inventions, copyrights, know-how
(including trade secrets, applications and other unpatented or
unpatentable proprietary or confidential information, systems or
procedures), trademarks, service marks and trade names (collectively,
"Proprietary Rights") used in or necessary for the conduct of the
business of the Company as now conducted and as proposed to be
conducted as described in the Prospectus or the documents incorporated
by reference in the Prospectus, except where the failure to own such
Proprietary Rights would not have a Material Adverse Effect. The
Company and its Subsidiaries have the right to use all Proprietary
Rights used in or necessary for the conduct of their respective
businesses without infringing the rights of any person or violating the
terms of any licensing or other agreement to which the Company or any
Subsidiary is a party and, to the Company's knowledge, no person is
infringing upon any of the Proprietary Rights, except where the
infringement of or lack of a right to use such Proprietary Rights would
not have a Material Adverse Effect. Except as disclosed in the
Prospectus or the documents incorporated by reference into the
Prospectus, no charges, claims or litigation have been asserted or, to
the Company's knowledge, threatened against the Company or any
Subsidiary contesting the right of the Company or any Subsidiary to
use, or the validity of, any of the Proprietary Rights or challenging
or questioning the validity or effectiveness of any license or
agreement pertaining thereto or asserting the misuse thereof, and, to
the Company's knowledge, no valid basis exists for the assertion of any
such charge, claim or litigation. All licenses and other agreements to
which the Company or any Subsidiary is a party relating to Proprietary
Rights are in full force and effect and constitute valid, binding and
enforceable obligations of the Company or such Subsidiary and, to the
Company's knowledge, the other parties thereto, subject in each case to
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium
and similar laws of general applicability relating to or affecting
creditors' rights and to general equity principles, as the case may be,
and there have not been and there currently are not
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any defaults (or any event which, with notice or lapse of time, or
both, would constitute a default) by the Company or any Subsidiary
under any license or other agreement affecting Proprietary Rights used
in or necessary for the conduct of the business of the Company or any
Subsidiary, except for defaults, if any, which would not have a
Material Adverse Effect. The validity, continuation and effectiveness
of all licenses and other agreements relating to the Proprietary Rights
and the current terms thereof will not be affected by the transactions
contemplated by this Agreement.
(z) Neither the Company nor any of its Subsidiaries is
conducting or as of the date hereof intends to conduct its business in
a manner by which it would become an "investment company" as defined in
Section 3(a) of the Investment Company Act of 1940, as amended.
(aa) All issuances and sales by the Company of its securities
during the past three years were either (i) registered under the Act,
or (ii) exempt from registration under the Act, and all such issuances
and sales complied in all material respects with the provisions of all
applicable federal and state securities laws. Except as set forth in or
contemplated by the Prospectus, no holder of any securities of the
Company has the right to require registration of any shares of Common
Stock or other securities of the Company because of the filing or
effectiveness of the Registration Statement.
(bb) Except as otherwise contemplated herein, neither the
Company nor, to the Company's knowledge, any of its officers, directors
or affiliates (as defined in the Rules and Regulations) has taken or
has any present intention to take, directly or indirectly, any action
designed to stabilize or manipulate the price of any security of the
Company or any action which has constituted or which might reasonably
be expected to cause or result in stabilization or manipulation of the
price of any security of the Company, to facilitate the sale or resale
of any of the Shares.
(cc) Except as provided for herein, neither the Company nor
any of its Subsidiaries has, and at the Closing Time and the Option
Closing Time will have, incurred any liability for financial advisory,
finder's or brokerage fees or agent's commissions in connection with
the offer and sale of the Shares, this Agreement or the transactions
hereby contemplated.
(dd) For each of the past ten years, to the knowledge of the
Company the Company and each of its Subsidiaries have timely filed all
federal, state, local and foreign income, employment, withholding,
franchise and other tax returns required to be filed through the date
hereof and have paid all taxes shown as due thereon or made adequate
reserves for similar future tax liabilities. Except as disclosed or
incorporated by reference in the Prospectus, no tax deficiency has
been, nor does the Company have any knowledge of any tax deficiency
which might be, asserted against the Company or any of its Subsidiaries
by any taxing authorities, which would have a Material Adverse Effect.
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(ee) All contracts and other documents required to be filed as
exhibits to the Registration Statement have been filed with the
Commission.
(ff) Neither the Company nor any of its Subsidiaries has
engaged in any transaction in connection with which the Company or any
of its Subsidiaries could be subject to either a civil penalty assessed
pursuant to Section 502(i) of the Employee Retirement Income Security
Act of 1974, as amended ("ERISA"), or a tax imposed by Section 4975 of
the Internal Revenue Code of 1986, as amended (the "Code"). No material
liability to the Pension Benefit Guaranty Corporation has been, or is
expected by the Company to be, incurred by the Company or any of its
Subsidiaries with respect to any pension plan subject to ERISA (a
"Pension Plan"). There has been no "reportable event" within the
meaning of Section 4043(b) of ERISA with respect to any Pension Plan
and no event or condition which presents a material risk of the
termination of any Pension Plan by the Pension Benefit Guaranty
Corporation. Full payment has been made of all amounts which the
Company or any Subsidiary is required, under the terms of any Pension
Plan, to have paid as contributions to such Pension Plan as of the date
hereof, and no "accumulated funding deficiency," as defined in Section
302 of ERISA and Section 412 of the Code, whether or not waived, exists
with respect to any Pension Plan.
(gg) The Bank is in compliance in all material respects with
applicable financial record-keeping and reporting requirements of the
Currency and Foreign Transactions Reporting Act of 1970, as amended,
and the regulations and rules promulgated thereunder.
(hh) To the knowledge of the Company, (i) neither the Company,
any of its Subsidiaries nor the employees of the Company or any of its
Subsidiaries has made any payment of funds of the Company or any of its
Subsidiaries as a loan for the purchase of the Shares or made any
payment of funds prohibited by law, and (ii) no funds have been set
aside to be used for any payment prohibited by law.
(ii) The Company has not relied upon the Underwriters or their
legal counsel or other advisors for any legal, tax or accounting advice
in connection with the transactions contemplated by this Agreement,
except with respect to the subject matter of any Blue Sky memorandum
prepared in connection with the Offering.
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4. Purchase, Sale and Delivery of the Shares; Closing; Distribution.
(a)(i) On the basis of the representations and warranties set
forth in this Agreement and subject to the terms and conditions herein
set forth, the Company agrees to sell to the Underwriters 1,200,000
Firm Shares, and the Underwriters, severally and not jointly, agree to
purchase such 1,200,000 Firm Shares from the Company as set forth on
Schedule A hereto, at and for a price of $____ per Share (the "Purchase
Price"), only in those jurisdictions and in such amounts where due
qualification and/or registration has been effected or an exemption
from such qualification and/or registration is available under the
applicable securities or Blue Sky laws of such jurisdiction. This
agreement to purchase Shares only covers the initial sale of the Shares
by the Underwriters and not any subsequent sale of such Shares in any
trading market which may develop after the public offering.
(ii) Delivery of the Firm Shares shall be made to the
Underwriters at the offices of XxXxxxxx & Company Securities, Inc.
("XxXxxxxx & Company"), at XxXxxxxx Investment Center, 000 Xxxxxxxx
Xxxxxx, Xxxxxxxxx, Xxxx 00000-0000, or such other location as you and
the Company shall agree, against payment by you of the purchase price
therefor by wire transfer of immediately available funds to an account
previously specified by the Company to the Underwriterss for the Shares
sold by the Company, at 10:00 a.m., Cleveland time, on September __,
1998, or on such other business day (Saturdays, Sundays and legal
holidays in the City of Cleveland not being considered business days
for the purposes of this Agreement) not later than the fourth full
business day following the date of this Agreement as you shall
determine and advise the Company by at least two full business days'
notice in writing, which time and date are herein called the "Closing
Time." Delivery of the Firm Shares shall be made in registered form in
such name or names and in such denominations as you shall request by at
least two full business days' notice in writing. The cost of original
issue tax stamps and transfer stamps, if any, in connection with the
issuance and delivery or sale of the Firm Shares by the Company to the
Underwriters shall be borne by the Company. The Company will pay and
save harmless each Underwriter, or its nominees, and any subsequent
holder of the Firm Shares from any and all liabilities with respect to
or resulting from any failure or delay in paying federal or state stamp
and other transfer taxes, if any, which may be payable or determined to
be payable in connection with the sale by the Company to such
Underwriter of the Firm Shares or any portion thereof.
(iii) The obligations of each Underwriter to purchase and pay
for the Firm Shares shall be subject to compliance as of such date with
all the conditions specified in Section 8 hereof and to the absence of
any termination of this Agreement pursuant to Section 11.
(b)(i) The Company hereby grants to the Underwriters an option
(the "Option") to purchase from the Company up to 180,000 Option
Shares, at and for a price for each Option Share equal to the Purchase
Price; provided, however, that the Option may be
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exercised only for the purpose of covering any over-allotments which
may be made by you in connection with the distribution and sale of the
Firm Shares.
(ii) The Option is exercisable by you in whole or in part at
any time on or before 12:00 noon, Cleveland time, on the day prior to
the Closing Time, and at any time thereafter during the period ending
30 days after the date of the Prospectus, by giving notice to the
Company in the manner provided in Section 12 hereof, setting forth the
number of Option Shares as to which the Option is being exercised, the
name or names in which the certificates for such Option Shares are to
be registered, the denominations of such certificates and the date of
delivery of such Option Shares, which date, if not the Closing Time,
shall not be less than two nor more than five business days after such
notice.
(iii) Upon the exercise of the Option, the Company shall sell
to the Underwriters the number of Option Shares specified in such
notice, and the Underwriters, on the basis of the representations and
warranties of the Company contained herein and in each certificate and
document contemplated under this Agreement to be delivered to you, but
subject to the terms and conditions of this Agreement, severally and
not jointly, shall purchase from the Company the number of Option
Shares specified in such notice.
(iv) Delivery of the Option Shares with respect to which the
Option shall have been exercised shall be made to the Underwriters at
the offices of XxXxxxxx & Company at XxXxxxxx Investment Center, 000
Xxxxxxxx Xxxxxx, Xxxxxxxxx, Xxxx 00000-0000 or such other location as
you and the Company shall agree, against payment by you, as
Underwriters, of the aggregate Purchase Price therefor to the Company
by wire transfer of immediately available funds to an account
previously specified by the Company to the Underwriters in the amount
to which the Company is entitled, at 10:00 a.m., Cleveland time, on the
date and in the place designated in the notice given by you as above
provided for, unless some other place, time and date is mutually agreed
upon (such time and date being herein called the "Option Closing
Time"). The cost of original issue tax stamps or transfer stamps, if
any, in connection with each delivery of the Option Shares by the
Company to the Underwriters shall be borne by the Company. The Company
will pay and save harmless each Underwriter, or its nominees, and any
subsequent holder of Option Shares from any and all liabilities with
respect to or resulting from any failure or delay in paying federal and
state stamp taxes, if any, which may be payable or determined to be
payable as a result of the sale by the Company to such Underwriters of
the Option Shares or any portion thereof.
(v) The obligation of each Underwriter to purchase and pay for
the Option Shares at the Option Closing Time shall be subject to
compliance as of such date with all the conditions specified in Section
8 hereof and to the absence of any termination of this Agreement
pursuant to Section 11 hereof.
(c) Subject to the terms and conditions hereof, the
Underwriters agree that (i) they will offer the Shares to the public as
set forth in the Prospectus as soon after the
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Registration Statement becomes effective as may be practicable, (ii)
they will offer and sell the Shares to the public only in those
jurisdictions and in such amounts where due qualification and/or
registration has been effected or an exemption from such qualification
and/or registration is available under the applicable securities or
Blue Sky laws of such jurisdiction, and (iii) the Shares will be
offered and sold only in those jurisdictions where broker/dealer
licensing has been obtained or where there is an exemption from such
licensing. This agreement to offer Shares to the public only covers the
initial sale of the Shares by the Underwriters and not any subsequent
sale of such Shares in any trading market which may develop after the
public offering.
5. Registration Statement and Prospectus.
(a) The Company will deliver to you, without charge, two fully
signed copies of the Registration Statement and of each amendment
thereto (including all financial statements, exhibits and documents
incorporated by reference) and the number of conformed copies of the
Registration Statement and of each amendment thereto (including all
financial statements and documents incorporated by reference, but
excluding exhibits) as you may reasonably request.
(b) The Company has delivered to the Underwriters and to each
of the dealers selected by you in connection with the distribution of
the Shares (a "Selected Dealer" and, collectively, the "Selected
Dealers"), without charge, as many copies as you have requested of each
Preliminary Prospectus heretofore filed with the Commission and will
deliver to the Underwriters and to any Selected Dealer, without charge,
on the Effective Date, and thereafter from time to time during the
period in which the Prospectus is required by law to be delivered in
connection with sales of Shares by an Underwriter or a dealer, as many
copies of the Prospectus and any documents incorporated by reference
(and, in the event of any amendment of or supplement to the Prospectus,
of such amended or supplemented Prospectus) as you may reasonably
request.
(c) The Company has authorized the Underwriters to use and to
make available for use by prospective dealers the Preliminary
Prospectus and authorizes the Underwriters, all Selected Dealers and
all dealers to whom any of such Shares may be sold by the Underwriters
or by any Selected Dealer to use the Prospectus, as from time to time
amended or supplemented, in connection with the sale of the Shares in
accordance with the applicable provisions of the Act, the applicable
Rules and Regulations and applicable state law until completion of the
public offering of the Shares and for such longer period as you may
request if the Prospectus is required to be delivered in connection
with sales of the Shares by an Underwriter or a dealer.
6. Covenants of the Company. The Company covenants and agrees with the
Underwriters that:
(a) After the execution and delivery of this Agreement, the
Company will not at any time, whether before or after the Effective
Date, file any amendment of or
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supplement to the Registration Statement or the Prospectus of which you
shall not previously have been advised and furnished with a copy, or
which you or Vorys, Xxxxx, Xxxxxxx and Xxxxx LLP ("Counsel for the
Underwriters") shall not have approved (which approval shall not be
unreasonably withheld or delayed) or which is not in compliance with
the Act or the Rules and Regulations.
(b) If the Registration Statement has not become effective,
the Company will promptly file the Final Amendment with the Commission
and will use its best efforts to cause the Registration Statement to
become effective. If the Registration Statement has become effective,
the Company will file the Rule 430A Prospectus or other Prospectus with
the Commission as promptly as practicable, but in no event later than
is permitted by Rule 424(b). The Company will promptly advise you (i)
when the Registration Statement or any post-effective amendment thereto
shall hereafter become effective, or any amendments or supplements to
the Prospectus or any document which shall be incorporated by reference
into the Prospectus shall have been filed with the Commission; (ii) of
the nature and substance of any request of the Commission or any state
or other regulatory body for any amendment or supplement of the
Registration Statement or the Prospectus or for additional information;
(iii) of the issuance by the Commission of any stop order suspending
the effectiveness of the Registration Statement or of any order
preventing or suspending the use of any Preliminary Prospectus or
prohibiting the offer or sale of any of the Shares or of the initiation
of any proceedings for such purpose; (iv) of any receipt by the Company
of any notification with respect to the suspension of qualification of
the Shares for sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose; and (v) of the
happening of any event during the periods in which the Prospectus is to
be used in conjunction with the offer or sale of Shares which makes any
statement made or incorporated by reference in the Registration
Statement or the Prospectus untrue in any material respect or which
requires the making of any changes in the Registration Statement or the
Prospectus in order to make the statements therein not misleading. The
Company will use its best efforts to prevent the issuance of any stop
order or any order preventing or suspending the use of the Registration
Statement or Prospectus and, if such order is issued, to obtain the
lifting thereof as promptly as possible.
(c) The Company will prepare and file with the Commission,
upon your request, any such amendments of or supplements to the
Registration Statement or the Prospectus, in form satisfactory to
Xxxxxx & XxXxxxxx, L.P.A. ("Counsel for the Company"), as, in the
opinion of Counsel for the Underwriters, may be necessary or advisable
in connection with the distribution of the Shares or any change in the
price at which, or the terms upon which, the Shares may be offered by
you and will use its best efforts to cause the same to become effective
as promptly as possible.
(d) The Company will comply with the Act, the Rules and
Regulations and the Exchange Act, and the rules and regulations
thereunder, so as to permit the continuance of sales of and dealings in
the Shares under the Act and the Exchange Act. If at any time when a
prospectus is required to be delivered under the Act an event shall
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have occurred as a result of which it is necessary to amend or
supplement the Prospectus in order to make the statements made or
incorporated by reference therein not untrue or not misleading in any
material respect or to make the Prospectus comply with the Act and the
Rules and Regulations, the Company will notify you promptly thereof and
will, subject to the provisions of Section 6(a) hereof, file with the
Commission an amendment or supplement which will correct such statement
in accordance with the requirements of Section 10 of the Act and shall
furnish to the Underwriters a reasonable number of copies of an
amendment or amendments or of a supplement or supplements to the
Prospectus (in form and substance reasonably satisfactory to Counsel
for the Company and Counsel for the Underwriters) which shall amend or
supplement the Prospectus so that, as amended or supplemented, the
Prospectus will not contain any untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances existing at the time the
Prospectus is delivered to a purchaser of the Shares, not misleading.
The Company will not file or use any amendment or supplement to the
Registration Statement or the Prospectus of which the Underwriters have
not first been furnished a copy or as to which the Underwriters shall
reasonably object after having been furnished such copy. The Company
shall furnish such information as the Underwriters from time to time
reasonably may request to satisfy the requirements of this subsection
(d).
(e) The Company will comply with all of the provisions of any
undertakings contained in the Registration
Statement.
(f) The Company will take all reasonable actions to furnish to
whomever you direct, when and as requested by you, all necessary
documents, exhibits, information, applications, instruments and papers
as may be required or, in the opinion of Counsel for the Underwriters,
desirable in order to permit or facilitate the sale of the Shares. The
Company will use its best efforts to qualify or register the Shares for
sale under the so-called Blue Sky laws of such jurisdictions as you
shall request, to make such applications, file such documents and
furnish such information as may be required for such purpose and to
comply with such laws so as to continue such qualification in effect so
long as required for the purposes of the distribution of the Shares;
provided, however, that the Company shall not be required to qualify as
a foreign corporation in any jurisdiction, and provided further that
the Company shall not be required to file a consent to service of
process in any jurisdiction in any action other than one arising out of
the offering or sale of the Shares.
(g) During the period of two years commencing on the Effective
Date, the Company will furnish to the Underwriters, in such quantity as
the Underwriters may reasonably request, (i) within 90 days after the
end of each fiscal year of the Company, at the Company's option either
(A) a consolidated balance sheet of the Company and its then
consolidated subsidiaries, and a separate balance sheet of each
subsidiary of the Company, the accounts of which are not included in
such consolidated balance sheet, as of the end of such fiscal year, and
consolidated statements of operations, cash flows and changes in
shareholders' equity of the Company and its then consolidated
subsidiaries,
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and separate statements of operations, cash flows and changes in
shareholders' equity of each of the subsidiaries of the Company, the
accounts of which are not included in such consolidated statements, for
the fiscal year then ended, all in reasonable detail, prepared in
accordance with generally accepted accounting principles, consistently
applied, and all certified by independent accountants (within the
meaning of the Act and the Rules and Regulations), or (B) the Company's
Form 10-K for such fiscal year as filed with the Commission in
accordance with the Exchange Act; (ii) within 45 days after the end of
each of the first three fiscal quarters of each fiscal year of the
Company, at the Company's option either (A) similar balance sheets as
of the end of such fiscal quarter and similar statements of operations,
cash flows and changes in shareholders' equity for the fiscal quarter
then ended, all in reasonable detail, and all certified by the
Company's principal financial officer or the Company's principal
accounting officer as having been prepared in accordance with generally
accepted accounting principles, consistently applied, or (B) the
Company's Form 10-Q for each such fiscal quarter as filed with the
Commission in accordance with the Exchange Act; (iii) as soon as
available, each report and each proxy or information statement
furnished to or filed with the Commission, any securities exchange or
the National Association of Securities Dealers, Inc. (the "NASD") and
each report and financial statement furnished to the Company's
shareholders generally; and (iv) any material reports filed by the
Company in connection with the quotation of its shares of Common Stock
on The Nasdaq Stock Market or any listing on any stock exchange.
(h) Counsel for the Company, the Company's Accountants and the
officers of the Company will respectively furnish the opinions, the
letters and the certificates referred to in subsections (e), (f), (g),
(h), (i) and (j) of Section 8 hereof, and, in the event that the
Company shall file any amendment to the Registration Statement relating
to the offering of the Shares or any amendment or supplement to the
Prospectus relating to the offering of the Shares subsequent to the
Effective Date, whether pursuant to subsection (c) of this Section 6 or
otherwise, such counsel, such accountants and such officers will, at
the time of such filing or at such subsequent time as you shall
specify, respectively furnish to you such opinions, letters and
certificates, each dated the date of its delivery, of the same nature
as the opinions, letters and certificates referred to in subsections
(e), (f), (g), (h), (i) and (j) of Section 8 hereof, as you may
reasonably request.
(i) Prior to the expiration of the Option, the Company will
not issue, directly or indirectly, without first consulting with you
and Counsel for the Underwriters, any press release or other
communication or hold any press conference with respect to the Company
or its activities or the offering contemplated hereby, except as
otherwise required by law or in connection with the release of
financial information for the fiscal quarter of the Company ended
September 30, 1998.
(j) Except as described in the Prospectus or as contemplated
by this Agreement, the Company shall not, without your prior written
consent, sell, contract to sell or otherwise dispose of any shares of
Common Stock, or any securities convertible into shares of Common
Stock, for a period of 90 days after the Effective Date, except for
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the issuance of shares of Common Stock pursuant to existing stock
option, purchase and compensation plans of the Company, or upon
conversion of any currently outstanding convertible securities of the
Company or the issuance of shares of Common Stock as consideration for
the acquisition of one or more businesses including the acquisitions of
Security First and Signal. In connection with the execution of this
Agreement, the Company shall deliver to you the written agreement of
each of the directors and executive officers of the Company to the
effect that such person shall not, without your prior written consent,
such consent not to be unreasonably withheld, for a period of 90 days
after the Effective Date, offer, sell, contract to sell, or grant any
option to purchase or otherwise dispose of any shares of Common Stock
or any securities convertible into or exchangeable for shares of Common
Stock.
(k) Except as contemplated herein, the Company will not at any
time, directly or indirectly, take any action which would constitute,
or which would be designed or which might reasonably be expected to
cause or result in, the stabilization of the price of the Shares to
facilitate the sale or resale of the Shares.
(l) After the Closing Time and the Option Closing Time, the
Company and each Subsidiary will be and remain in compliance with the
financial record-keeping requirements and internal accounting control
requirements of Section 13(b)(2) of the Exchange Act.
(m) The Company will take such actions and furnish such
information as reasonably requested by the Underwriters in order for
the Underwriters to ensure compliance with Rules 2710 and 2720 of the
NASD's Rules of Conduct.
(n) Not later than the 45th day following the end of the
fiscal quarter first occurring after the first anniversary of the
Effective Date, the Company will make generally available to its
securities holders and deliver to you an earnings statement (which need
not be audited) covering a period of at least 12 months beginning not
earlier than the Effective Date, which shall satisfy the provisions of
Section 11(a) of the Act and/or Rule 158 promulgated under the Act.
7. Expenses. The Company will pay and bear all costs, fees, taxes and
expenses incident to the performance of the obligations of the Company under
this Agreement including, but not limited to: (a) the costs incident to the sale
and delivery to the Underwriters of the Shares; (b) costs incident to the
preparation, printing and filing under the Act of each Preliminary Prospectus,
the Prospectus, the Registration Statement and any amendments thereto,
supplements thereof and exhibits thereto; (c) the costs of printing and
distributing to the Underwriters and any Selected Dealers copies of any
Preliminary Prospectus, the Prospectus, the Registration Statement and any
amendment thereto or supplement thereof required by this Agreement or the Act;
(d) the costs of preparing, printing, mailing, delivering, filing and
distributing preliminary and final Blue Sky memoranda (including the legal fees
and expenses of Counsel for the Underwriters in connection with the preparation
thereof), Underwriter's Questionnaires and Powers of Attorney, the Selected
Dealer Agreement, this Agreement and all documents related
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thereto; (e) the filing fees of the Commission; (f) the costs of qualification
or registration of the Shares in the jurisdictions referred to in Section 6(f)
hereof, including the legal fees and expenses of Counsel for the Underwriters in
connection therewith, and all filing fees in connection therewith; (g) the cost
of preparation of all filings with the NASD and all filing fees in connection
therewith; (h) fees and expenses of Counsel for the Company, the Company's
Accountants and the Company's consultants; (i) fees and expenses of the
Company's registrar and transfer agent, including the cost of supplying share
certificates representing shares of Common Stock; and (j) all costs and expenses
incurred or to be incurred by the Company in connection with the transactions
contemplated by this Agreement. If the Firm Shares are not sold to the
Underwriters by reason of any failure, refusal or inability on the part of the
Company to perform any agreement on its part to be performed hereunder or to
fulfill any condition of the Underwriters' obligations hereunder, or if you
shall terminate this Agreement pursuant to Section 11(a) hereof, the Company
shall promptly reimburse you for all reasonable expenses actually incurred by
you in contemplation of the performance by the Company of its obligations
hereunder, including but not limited to the fees and disbursements of Counsel
for the Underwriters, the Underwriters' reasonable printing and traveling
expenses and postage, telegraph, telecopy and telephone charges relating
directly to the offering contemplated by the Prospectus, and also including
reasonable advertising expenses of the Underwriters incurred after the Effective
Date, up to a maximum of $75,000.
8. Conditions of the Underwriters' Obligations. The Underwriters'
obligations hereunder to purchase and pay for the Shares are subject (as of the
date hereof, the Closing Time and the Option Closing Time) to the accuracy of
and compliance with the representations and warranties of the Company herein and
in each certificate and document contemplated under this Agreement to be
delivered, to the performance by the Company of its covenants and agreements
hereunder and under each such certificate and document, and to the following
additional conditions:
(a)(i) The Registration Statement shall have become effective
not later than 5:00 p.m., Cleveland time, on the date of this
Agreement, or at such later time or on such later date as you may agree
to in writing; (ii) if required, the Prospectus shall have been filed
with the Commission pursuant to Rule 424(b)(1) or (4) of the Rules and
Regulations within the applicable time period prescribed for such
filing thereunder and in accordance with the provisions of Section 6(b)
hereof; (iii) at or prior to the Closing Time or the Option Closing
Time, as the case may be, no stop order suspending the effectiveness of
the Registration Statement or the qualification or registration of the
Shares under the Blue Sky laws of any jurisdiction shall have been
issued and no proceeding for that purpose shall have been initiated or
shall be threatened or contemplated by the Commission or the
authorities of any such jurisdiction; (iv) any request for additional
information on the part of the Commission or any such authorities shall
have been complied with to the satisfaction of the Commission or such
authorities and to the reasonable satisfaction of Counsel for the
Underwriters; (v) the NASD, upon review of the terms of the public
offering of Shares, shall not have objected to such offering, such
terms, or the Underwriters' participation in the same; and (vi) after
the date hereof, no amendment or
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supplement to the Registration Statement or the Prospectus shall have
been filed without your prior consent.
(b) You shall not have advised the Company that the
Registration Statement or the Prospectus or any amendment thereof or
supplement thereto or any document incorporated by reference therein,
in your reasonable judgment after conferring with Counsel for the
Underwriters, contains an untrue statement of a fact which is material
or omits to state a fact which is material and is required to be stated
therein or is necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading.
(c) Between the time of the execution and delivery of this
Agreement and the Closing Time or the Option Closing Time, as the case
may be, there shall be no litigation instituted against the Company,
any Subsidiary or any of their respective officers or directors, and
between such dates there shall be no proceeding instituted or
threatened against the Company, any Subsidiary or any of their
respective officers or directors, before or by any federal, state,
county or local commission, regulatory body, administrative agency or
other governmental body, domestic or foreign, in which litigation or
proceeding an unfavorable ruling, decision or finding would, in the
judgment of the Underwriters, have a Material Adverse Effect or would
materially and adversely affect the ability of the Company to perform
its obligations under this Agreement.
(d) Each of the representations and warranties of the Company
contained herein and in each certificate and document contemplated
under this Agreement to be delivered shall be true and correct at the
Closing Time and the Option Closing Time as if made at the Closing Time
or the Option Closing Time, as the case may be, and all covenants and
agreements contained herein, and in each such certificate and document,
to be performed on the part of the Company and all conditions contained
herein and in each such certificate and document to be fulfilled or
complied with by the Company at or prior to the Closing Time or the
Option Closing Time, as the case may be, shall have been duly
performed, fulfilled or complied with.
(e) At the Closing Time and the Option Closing Time, Counsel
for the Company shall furnish to you an opinion, in form and substance
reasonably satisfactory to you and Counsel to the Underwriters, dated
as of the date of its delivery, to the effect that:
(i) The Company is a corporation duly organized,
validly existing and in good standing under the laws of the
State of Ohio. The Company has the power and authority
(corporate, governmental, regulatory and otherwise) and has or
will have all necessary Authorizations to own or lease all of
the assets owned or leased by it and to conduct its business
as described in the Registration Statement and the Prospectus,
except where the failure to have any Authorization would not
have a Material Adverse Effect. The Company is duly licensed
or qualified to do business and in good standing as a foreign
corporation in all
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jurisdictions (x) in which the nature of the activities
conducted by the Company requires such qualification and (yi)
in which the Company owns or leases real property, except
where the failure to be so licensed or qualified would not
have a Material Adverse Effect. The Subsidiaries are the only
subsidiaries of the Company.
(ii) The Bank is a bank duly organized, validly
existing and in good standing under the laws of the United
States. The deposit accounts of the Bank are insured up to
applicable limits by the FDIC and, to the knowledge of such
counsel, no proceedings for the termination or revocation of
such insurance are pending or threatened. The Bank has the
power and authority (corporate, governmental, regulatory and
otherwise) and has or will have all necessary Authorizations
to own or lease all of the assets owned or leased by it and to
conduct its business as described in the Registration
Statement and the Prospectus, except where the failure to have
any Authorization would not have a Material Adverse Effect.
The Bank is duly licensed or qualified to do business and in
good standing as a foreign corporation in all jurisdictions
(x) in which the nature of the activities conducted by the
Bank requires such qualification and (y) in which the Bank
owns or leases real property, except where the failure to be
so licensed or qualified would not have a Material Adverse
Effect.
(iii) The Company has the corporate power and
authority to enter into this Agreement, to sell and deliver to
the Underwriters the Shares to be sold by it hereunder, and to
consummate any other transaction contemplated by this
Agreement.
(iv) This Agreement and the sale of the Shares to the
Underwriters pursuant hereto have been duly authorized by all
necessary corporate action on the part of the Company. This
Agreement has been duly executed and delivered by the Company
and, assuming due authorization, execution and delivery by
you, is a valid and binding agreement of the Company,
enforceable against the Company in accordance with its terms,
subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors' rights and
to general equity principles, except as rights to indemnity
and contribution hereunder may be limited by applicable law.
(v) To the knowledge of such counsel and except as
disclosed in the Prospectus, neither the Company nor the Bank
is in material violation of any rule or regulation of the
Commission, the Federal Reserve, the OCC or the FDIC which
might have a Material Adverse Effect. To the knowledge of such
counsel, neither the Company nor the Bank is subject to any
written directive from the Commission, the Federal Reserve,
the OCC or the FDIC to make any material change in the method
of conducting its business or affairs. Except as set forth or
incorporated by reference in the Prospectus, to the knowledge
of such counsel, there is not pending or threatened any
litigation, charge, investigation, action, suit
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or other proceeding before or by any court, regulatory
authority or governmental agency or body which would affect
the performance of the terms and conditions of this Agreement
or the consummation of the transactions contemplated hereby or
which would have a Material Adverse Effect.
(vi) The authorized capital stock of the Company is
as set forth or incorporated by reference in the Prospectus.
The issued and outstanding shares of Common Stock have been
duly authorized and validly issued, are fully paid and
nonassessable, and have not been issued in violation of any
preemptive right. The purchasers of the Shares will acquire
good title thereto, free and clear of any material lien,
claim, security interest or other encumbrance or other defect
in title (except restrictions on transfer under applicable law
and except such claims as may be asserted against the
purchasers thereof by third party claimants). The terms and
provisions of the Shares conform in all material respects with
the description thereof contained in the Registration
Statement and the Prospectus. The certificates evidencing the
Shares conform in all material respects with the requirements
of applicable laws and regulations.
(vii) The issued and outstanding shares of capital
stock of each Subsidiary have been duly authorized and validly
issued, are fully paid and nonassessable and are owned by the
Company, free and clear of any liens, charges, encumbrances or
restrictions, except as set forth or incorporated by reference
in the Prospectus.
(viii) To such counsel's knowledge, no holders of
shares of Common Stock or other securities of the Company have
registration rights with respect to securities of the Company
because of the filing or effectiveness of the Registration
Statement.
(ix) The terms and provisions of the Common Stock and
the Shares conform in all material respects to the description
thereof contained or incorporated by reference in the
Registration Statement and Prospectus.
(x) The execution and delivery of this Agreement and
the consummation of the transactions herein contemplated did
not and will not (A) violate or conflict with the respective
Articles of Incorporation or the Code of Regulations of the
Company or any of its Subsidiaries, (B) result in a breach or
violation of any of the terms and provisions of, or constitute
a default (or give rise to a state of facts which, with notice
or lapse of time, or both, would constitute a default) under
or result in the creation or imposition of any lien, charge or
encumbrance upon the assets or properties of the Company or
any of its Subsidiaries, pursuant to any indenture, mortgage,
deed of trust, voting trust agreement, loan agreement, letter
of credit agreement, bond, debenture, note agreement or other
evidence of indebtedness, lease, contract or other agreement
or instrument known to such counsel to which the Company or
any of its
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Subsidiaries is a party or by which the Company, any of its
Subsidiaries or any of their respective properties are bound,
or (C) violate or conflict with any governmental license or
permit known to such counsel, or any law, administrative
regulation or authorization, or any approval, court decree,
injunction or order known to such counsel, in each case to
which the Company or any of its Subsidiaries is subject or by
which the Company or any of its Subsidiaries is bound; except
such breaches, violations or defaults as would not have a
Material Adverse Effect; provided, however, that no opinion
need be rendered concerning state securities or Blue Sky laws.
(xi) The Registration Statement has become effective
under the Act and (A) to such counsel's knowledge, no stop
order suspending the effectiveness of the Registration
Statement has been issued, (B) no proceedings for that purpose
have been instituted or, to such counsel's knowledge, are
pending or threatened under the Act, and (C) all filings
required by Rule 424 and, if applicable, Rule 430A, of the
Rules and Regulations have been made.
(xii) Each of the Registration Statement and the
Prospectus, and each amendment or supplement thereto (other
than the financial statements, financial data and supporting
schedules included or incorporated by reference in such
Registration Statement or Prospectus, as to which such counsel
need express no opinion), as of the effective date of the
Registration Statement, complied as to form with the
requirements of the Act and the applicable Rules and
Regulations, and all written decisions and orders of the
Commission, as the case may be (except as to information with
respect to the Underwriters and except as to financial
statements, notes to financial statements, financial tables
and other financial and statistical data included or
incorporated by reference therein, as to which no opinion need
be expressed). To the knowledge of such counsel, all documents
and exhibits required to be filed with the Registration
Statement (in each case as amended or supplemented, if so
amended or supplemented) have been so filed. The description
in the Registration Statement of such documents and exhibits
is accurate in all material respects and presents fairly the
information required by the Act or the Rules and Regulations
to be presented. To the knowledge of such counsel, there are
no contracts or other documents of a character required to be
described in the Registration Statement or the Prospectus
which are not described. There are no statutes or regulations
applicable to the Company or any Subsidiary of a character
required to be disclosed in the Registration Statement or the
Prospectus which have not been so disclosed and properly
described therein. To the knowledge of such counsel, there are
no certificates, permits or other authorizations from any
governmental regulatory officials or bodies required to be
obtained or maintained by, or legal or governmental
proceedings, past, pending or threatened, against the Company
or any of its Subsidiaries of a character required to be
disclosed in the Registration Statement or the Prospectus
which have not been so disclosed and properly
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described therein. The Company complies with the conditions
permitting its use of Form S-3.
(xiii) Each document filed pursuant to the Exchange
Act and incorporated by reference in the Prospectus, when so
filed, complied as to form, in all material respects, with the
Exchange Act and the applicable rules and regulations
thereunder.
(xiv) No approval of any regulatory, supervisory or
other public authority is required in connection with the
execution and delivery of this Agreement or the sale of the
Shares, except (i) the declaration of effectiveness of the
Registration Statement and any required post-effective
amendment to the Registration Statement by the Commission,
(ii) as may be otherwise required under the securities laws of
various jurisdictions, and (iii) as may be required under the
rules and regulations of the NASD.
(xv) The statements in the Prospectus under the
caption "BUSINESS OF FIRSTMERIT Subsidiaries and Operations"
insofar as they refer to statements of law or legal
conclusions, have been prepared or reviewed by such counsel
and are correct in all material respects.
(xvi) Neither the Company nor any of its Subsidiaries
is an "investment company" as defined in Section 3(a) of the
Investment Company Act and, if the Company and the
Subsidiaries conduct their respective businesses as set forth
in the Registration Statement and the Prospectus or any
document incorporated by reference into the Prospectus, none
will become an "investment company" or be required to register
under the Investment Company Act.
(xvii) All issuances and sales by the Company of its
securities during the past three years were either (a)
registered under the Act or (b) exempt from registration under
the Act and, to such counsel's knowledge, otherwise complied
in all respects with the provisions of all applicable federal
and state securities laws.
(xviii) Such counsel has participated in the
preparation of the Registration Statement and the Prospectus,
including review and discussion of the contents thereof
(including review and discussion of the contents of all
documents incorporated by reference therein), and nothing has
come to the attention of such counsel that has caused them to
believe that the Registration Statement (including the
documents incorporated by reference therein) at the time the
Registration Statement 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, in the light of the circumstances under
which they were made, not misleading, or the Prospectus, as of
its date and as of the Closing Date or the Option Closing
Time, as the case may be, or any supplement to the
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Prospectus, as of its respective date, and as of the Closing
Date or the Option Closing Time, as the case may be, contained
any 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 opinion with respect to the financial
statements and the notes thereto and the schedules and other
financial and statistical data included in the Registration
Statement, the Prospectus or any document incorporated by
reference therein).
In rendering the opinions and confirmations set forth above, such
counsel may rely (as to matters of fact) upon certificates of
responsible officers of the Company and of the Company's transfer agent
and certificates of public officials, provided copies of such
certificates are delivered to the Underwriters.
(f) Concurrently with the execution and delivery of this
Agreement and at the Closing Time and at the Option Closing Time, each
of the Company's Accountants shall have furnished to you a letter,
dated as of the date of its delivery, addressed to you and in form and
substance reasonably satisfactory to you, (i) confirming that such
accountants are independent certified public accountants with respect
to the Company as required by the Act and the Rules and Regulations,
and (ii) stating that, as of the date hereof (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 hereof), the
conclusions and findings of such firm with respect to the financial
information and other matters ordinarily covered by accountants'
"comfort letters" to underwriters in connection with registered public
offerings.
(g) Concurrently with the execution and delivery of this
Agreement and at the Closing Time and at the Option Closing Time, each
of [the accountants for Security First and the accountants for Signal]
shall have furnished to you a letter, dated as of the date of its
delivery, addressed to you and in form and substance reasonably
satisfactory to you, (i) confirming that such accountants are
independent certified public accountants with respect to the Company as
required by the Act and the Rules and Regulations, and (ii) stating
that, as of the date hereof (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 hereof), the conclusions
and findings of such firm with respect to certain financial information
and other matters ordinarily covered by accountants' "comfort letters"
to underwriters in connection with registered public offerings.
(h) At the Closing Time and at the Option Closing Time, there
shall be furnished to you, on behalf of the Company, a certificate,
dated the date of its delivery, signed by both the chief executive
officer and the chief financial officer of the Company, in form and
substance reasonably satisfactory to you, to the effect that:
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(i) Each signer of such certificate on behalf of the
Company has carefully examined the Registration Statement and
the Prospectus and the documents incorporated by reference
therein and (A) to his knowledge, as of the date of such
certificate and as of the Effective Date, the statements in
the Registration Statement and the Prospectus and the
documents incorporated by reference therein are and were true
and correct in all material respects, and neither the
Registration Statement nor the Prospectus nor such document
incorporated by reference omits to state a material fact
required to be stated therein or necessary in order to make
the statements therein, in the light of the circumstances
under which they were made, not misleading; (B) since the
Effective Date, no event has occurred of which he has
knowledge and which was required by the Act or the Rules and
Regulations to be set forth in a supplement to or amendment of
the Prospectus but which has not been so set forth; and (C)
since the dates as of which and the periods for which
information is given in the Registration Statement and the
Prospectus, there has not been to his knowledge any change
which would have a Material Adverse Effect, other than changes
which the Registration Statement and the Prospectus
specifically disclose have occurred or may occur subsequent to
the Effective Date.
(ii) No stop order suspending the effectiveness of
the Registration Statement has been issued, and no proceedings
for such purpose have been commenced or are, to the knowledge
of each signer of such certificate, threatened or contemplated
by the Commission.
(iii) The Company has not received notice that any
stop order suspending the qualification by registration of any
of the Shares under the Blue Sky laws of any jurisdiction has
been issued, or that any proceedings for such purpose have
been commenced, and, to the knowledge of each signer of such
certificate, no such proceedings are threatened or
contemplated by any jurisdiction.
(iv) Each of the representations and warranties of
the Company contained in this Agreement and in each
certificate and document contemplated under this Agreement to
be delivered to you was, when originally made and is, at the
time such certificate is dated, true and correct.
(v) Each of the covenants required herein to be
performed by the Company on or prior to the date of such
certificate has been duly, timely and fully performed and each
condition herein required to be complied with by the Company
on or prior to the date of such certificate has been duly,
timely and fully complied with by the Company.
(i) The Company shall have furnished to you such certificates,
in addition to those specifically mentioned herein, as you may have
reasonably requested in a timely manner as to (i) the accuracy and
completeness, at the Closing Time and the Option
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Closing Time, of any statement in the Registration Statement or the
Prospectus, (ii) the accuracy, at the Closing Time and the Option
Closing Time, of the representations and warranties of the Company
herein and in each certificate and document contemplated under this
Agreement to be delivered to you, (iii) the performance by the Company
of its obligations hereunder and under each such certificate and
document, and (iv) the fulfillment of the conditions concurrent and
precedent to your obligations hereunder.
(j) The executive officers and directors of the Company shall
have entered into agreements for the benefit of the Underwriters to the
effect that they will not sell, contract to sell or otherwise dispose
of any shares of Common Stock or any securities convertible into shares
of Common Stock for a period of 90 days after the Effective Date,
except with the prior written consent of the Underwriters, such consent
not to be unreasonably withheld.
(k) Except as contemplated by the Registration Statement and
the Prospectus or except for the issuance of shares of Common Stock
pursuant to existing stock option, purchase and compensation plans of
the Company, or upon conversion of any currently outstanding
convertible securities of the Company or the issuance of shares of
Common Stock as consideration for the acquisition of one or more
businesses including the acquisitions of Security First and Signal,
since the date hereof there shall not have been any change in the
capitalization of the Company or any change which would have a Material
Adverse Effect, arising for any reason whatsoever.
(l) Counsel for the Underwriters shall have been furnished
such documents as they reasonably may require for the purpose of
evidencing the accuracy, completeness or satisfaction of any of the
representations, warranties or conditions herein contained, including,
but not limited to, resolutions of the Board of Directors of the
Company regarding the authorization of this Agreement and the
transactions contemplated hereby.
(m) Prior to and at the Closing Time and the Option Closing
Time, in the reasonable opinion of the Underwriters: (i) there shall
have been no material adverse change in the financial or other
condition of the Company and its Subsidiaries, taken as a whole, from
that as of the latest date as of which such condition is set forth or
incorporated by reference in the Prospectus; (ii) there shall have been
no material transaction entered into by the Company or any Subsidiary,
from the latest date as of which the financial condition of the Company
or any Subsidiary is set forth or incorporated by reference in the
Prospectus, other than transactions referred to or contemplated therein
and transactions in the ordinary course of business; (iii) neither the
Company nor any Subsidiary shall have received from the Commission, the
Federal Reserve, the OCC or FDIC any direction (oral or written) to
make any material change in the method of conducting their respective
businesses which would have a Material Adverse Effect; (iv) no action,
suit or other proceeding, at law or in equity, or before or by any
federal or state commission, board or other administrative agency, or
before any arbitrator or arbitrators, shall be pending or threatened
against the Company or any Subsidiary or affecting any of their
respective assets wherein an unfavorable decision,
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ruling or finding would have a Material Adverse Effect (provided that
for this Section 8(l), the Underwriters shall not regard any proceeding
to be "threatened" unless a potential party has manifested to the
management of the Company or to Counsel for the Company a present
intention to initiate a proceeding); and (v) the Shares shall have been
qualified or registered for offering and sale (or exempt from such
requirements) by the Company under the securities or Blue Sky laws of
each jurisdiction upon which the Underwriters and the Company shall
have agreed.
All of the 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 reasonably satisfactory
to Counsel for the Underwriters. You reserve the right to waive any condition
hereinabove set forth. If any condition of the Underwriters' obligations
hereunder to be satisfied prior to the Closing Time or the Option Closing Time
is not so satisfied, this Agreement may be terminated by you prior to the
Closing Time or the Option Closing Time, as applicable, by notice in writing or
by telegram confirmed in writing to the Company.
9. Indemnification and Contribution.
(a) The Company agrees to indemnify and hold harmless each of
the Underwriters and each person who controls any of the Underwriters
within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act, from and against any and all losses, claims, damages,
liabilities or actions, joint or several (including any investigation,
legal or other expense reasonably incurred in connection with, and any
amount paid in settlement of, any commenced or threatened action, suit
or proceeding or any claim asserted), to which any of the Underwriters
or any such controlling person may become subject under the Act, the
Exchange Act or otherwise, but only insofar as such losses, claims,
damages, liabilities or actions arise out of, or are based upon:
(i) any misrepresentation by the Company in this
Agreement, including, but not limited to, the breach of, or
any inaccuracy in, the representations and warranties of the
Company contained in this Agreement or any certificate or
other document contemplated by this Agreement or any failure
of the Company to perform its obligations and covenants under
this Agreement; or
(ii) any untrue statement or alleged untrue statement
of a material fact contained in the Registration Statement,
any Preliminary Prospectus, the Prospectus, or any amendment
thereof or supplement thereto or in any application or other
document executed by the Company based upon written
information furnished by or on behalf of the Company and filed
in any jurisdiction in order to register or qualify the Shares
under the securities laws thereof or filed with the
Commission, or the omission or alleged omission to state
therein a 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;
provided,
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however, that the indemnity agreement contained in this
Section 9(a) shall not extend to any Underwriter in respect of
any such losses, claims, damages, liabilities or actions
arising out of, or based upon, any such untrue statement or
alleged untrue statement or any such omission or alleged
omission, if such statement or omission was made in reliance
upon information furnished in writing to the Company through
you or on behalf of you specifically for use in connection
with the preparation of the Registration Statement, any
Preliminary Prospectus or the Prospectus or any amendment
thereof or supplement thereto and, provided further, that the
indemnity agreement provided in this Section 9(a) with respect
to any Preliminary Prospectus shall not inure to the benefit
of any Underwriter from whom the person asserting any losses,
claims, damages, liabilities or actions based upon any untrue
statement or alleged untrue statement of material fact or
omission or alleged omission to state therein a material fact
purchased Shares, if a copy of the Prospectus in which such
untrue statement or alleged untrue statement or omission or
alleged omission was corrected has not been sent or given to
such person within the time required by the Act and the Rules
and Regulations thereunder, unless such failure is the result
of noncompliance by the Company with Section 5(a) hereof. The
Company agrees to pay any legal and other expenses for which
it is liable under this subsection (a) from time to time (but
not more frequently than monthly) within 30 days after its
receipt of a xxxx therefor.
(b) Each Underwriter agrees, severally and not jointly, to
indemnify and hold harmless the Company, its directors, its officers
who shall have signed the Registration Statement and each person, if
any, who controls the Company within the meaning of Section 15 of the
Act or Section 20 of the Exchange Act (i) to the same extent as the
foregoing indemnity from the Company to each Underwriter, but in each
case to the extent, and only to the extent, that any statement in or
omission from or alleged omission from the Registration Statement, any
Preliminary Prospectus, the Prospectus or any amendment or supplement
thereto was made in reliance upon information furnished in writing to
the Company by such Underwriter specifically for use in connection with
the preparation of the Registration Statement, any Preliminary
Prospectus or the Prospectus or any amendment or supplement thereto,
and (ii) to the extent any such loss, claim, damage, liability or
action arises out of, or is based upon, a failure or alleged failure of
such Underwriter to deliver the Prospectus as required by applicable
laws. Each Underwriter agrees, severally and not jointly, to pay any
legal and other expenses for which it is liable under this subsection
(b) from time to time (but not more frequently than monthly) within 30
days after receipt of a xxxx therefor.
(c) If any action is brought against a person entitled to
indemnification pursuant to the foregoing subsection (a) or (b) (an
"indemnified party") in respect of which indemnity may be sought
against a person granting indemnification (an "indemnifying party")
pursuant to such subsections, such indemnified party shall promptly
notify such indemnifying party in writing of the commencement thereof;
provided, however, that the omission so to notify the indemnifying
party of any such action shall not release the indemnifying party from
any liability it may have to such
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indemnified party otherwise than on account of the indemnity agreement
contained in subsection (a) or (b) of this Section 9. In case any such
action is brought against an indemnified party and the indemnified
party notifies an indemnifying party of the commencement thereof, the
indemnifying party against which a claim is to be made will be entitled
to participate therein at its own expense and, to the extent that it
may wish, to assume at its own expense the defense thereof, with
counsel reasonably satisfactory to such indemnified party; provided,
however, that (i) if the defendants in any such action include both the
indemnified party and the indemnifying party, and the indemnified party
shall have reasonably concluded based upon the written advice of
counsel that there may be legal defenses available to it and/or other
indemnified parties which are different from or additional to those
available to the indemnifying party, the indemnified party shall have
the right to select separate counsel reasonably satisfactory to the
indemnifying party to assume such legal defenses and otherwise to
participate in the defense of such action on behalf of such indemnified
party or parties; and (ii) in any event, the indemnified party shall be
entitled to have counsel chosen by such indemnified party participate
in, but not conduct, the defense. Upon receipt by the indemnified party
of notice from the indemnifying party of its election so to assume the
defense of such action and approval by the indemnified party of
counsel, the indemnifying party will not be liable to such indemnified
party under this Section 9 for any legal or other expenses subsequently
incurred by such indemnified party in connection with the defense
thereof unless (A) the indemnified party shall have employed such
counsel in connection with the assumption of legal defenses in
accordance with proviso (i) to the next preceding sentence (it being
understood, however, that the indemnifying party shall not be liable
for the expenses of more than one separate counsel); (B) the
indemnifying party shall not have employed counsel reasonably
satisfactory to the indemnified party to represent the indemnified
party within a reasonable time after notice of commencement of the
action; or (C) the indemnifying party has authorized in writing the
employment of counsel for the indemnified party at the expense of the
indemnifying party. An indemnifying party shall not be liable for any
settlement of any action or proceeding effected without its written
consent.
(d) In order to provide for just and equitable contribution in
circumstances in which the indemnity agreement provided for in
subsection (a) or (b) of this Section 9 is unavailable in accordance
with its terms, the Company and, subject to the limitations set forth
below, each of the Underwriters shall contribute to the aggregate
losses, claims, damages and liabilities, of the nature contemplated by
said indemnity agreement (including any investigation, legal and other
expenses incurred in connection with, and any amount paid in settlement
of, any action, suit or proceeding or any claims asserted, but after
deducting in the case of losses, claims, damages, liabilities and
expenses suffered any contribution received by such party from persons,
other than any Underwriter, who may also be liable for contribution,
including persons who control the Company within the meaning of the
Act, officers of the Company who signed the Registration Statement and
directors of the Company) incurred by the Company and the Underwriters,
in such proportions as are applicable to reflect the relative benefits
received by the Company, on the one hand, and the Underwriters, on the
other hand, from the
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offering of Shares; provided, however, that if such allocation is not
permitted by applicable law or if the indemnified party failed to give
the notice required under subsection (c) of this Section 9, then the
relative fault of the Company, on the one hand, and the Underwriters,
on the other hand, in connection with the statements or omissions which
resulted in such losses, claims, damages and liabilities and other
relevant equitable considerations will be considered together with such
relative benefits. The relative benefits received by the Company, on
the one hand, and the Underwriters, on the other hand, shall be deemed
to be in such proportion as the total net proceeds from the offering
(before deducting expenses) received by the Company bears to the total
underwriting discount received by the Underwriters, in each case as set
forth in the table on the cover page of the Prospectus and in the notes
thereto. The relative fault of the Company, on the one hand, and of the
Underwriters, on the other hand, shall be determined by reference to,
among other things, whether in the case of an untrue statement or
alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact, such statement or omission relates
to information supplied by the Company or by the Underwriters, and the
parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such untrue 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
that does not take account of the equitable considerations referred to
in this subsection (d). The amount paid or payable by the indemnified
party as a result of the losses, claims, damages or liabilities
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 against or appearing as a
third party witness in any such action or claim. Notwithstanding the
provisions of this subsection (d), (i) no Underwriter shall be required
to contribute any amount in excess of the amount by which the total
price at which the Shares purchased by it were offered to the public
exceeds the amount of any damages which such Underwriter has otherwise
been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission, and (ii) no person guilty of
fraudulent misrepresentation within the meaning of Section 11(f) of the
Act shall be entitled to contribution from any person who is not guilty
of such fraudulent misrepresentation. For purposes of this subsection
(d), each person, if any, who controls any Underwriter within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act
shall have the same rights to contribution as such Underwriter. Any
party entitled to contribution will, promptly after receipt of notice
of commencement of any action, suit or proceeding against such party in
respect of which a claim for contribution may be made against another
party or parties under this Section 9(d), notify such party or parties
from whom contribution may be sought, but the omission to so notify
such party or parties shall not relieve the party or parties from whom
contribution may be sought of any liability they may have under this
Section 9(d) or otherwise. No party shall be liable for contribution
for any settlement of any action or claim effected without its written
consent.
(e) The respective indemnity and contribution agreements by
the Underwriters and the Company contained in subsections (a), (b), (c)
and (d) of this Section 9, and the
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respective covenants, representations and warranties of the Company in
Sections 2, 3, 4, 5, 6 and 7 hereof shall remain operative and in full
force and effect regardless of (i) any investigation made by any
Underwriter, on its behalf or by or on behalf of any person who
controls such Underwriter, of the Company or any controlling person of
the Company, or any director or officer of the Company, (ii) acceptance
of any of the Shares and payment therefor, or (iii) with respect to
Section 7 and this Section 9 only, any termination of this Agreement,
and shall survive the delivery of the Shares, and any successor of any
Underwriter or the Company, or of any person who controls any
Underwriter or the Company, as the case may be, shall be entitled to
the benefit of such respective indemnity and contribution agreements.
The respective indemnity and contribution agreements by the
Underwriters and the Company contained in subsections (a), (b), (c) and
(d) of this Section 9 shall be in addition to any liability which the
Underwriters and the Company may otherwise have to the other.
10. Defaulting Underwriter.
(a) If any Underwriter shall default in its obligation to
purchase the Shares which it has agreed to purchase hereunder at the
Closing Time or the Option Closing Time, as the case may be, the
non-defaulting Underwriter may in its discretion arrange for it or
another party or other parties to purchase such Shares on the terms
contained herein. If within thirty-six hours after such default by any
Underwriter the non-defaulting Underwriter does not arrange for the
purchase of such Shares, then the Company shall be entitled to a
further period of thirty-six hours within which to procure another
party or other parties reasonably satisfactory to the non-defaulting
Underwriter to purchase such Shares on such terms. In the event that,
within the respective prescribed periods, the non-defaulting
Underwriter notifies the Company that it has so arranged for the
purchase of such Shares, or the Company notifies the non-defaulting
Underwriter that the Company has so arranged for the purchase of such
Shares, the non-defaulting Underwriter or the Company shall have the
right to postpone either the Closing Time or the Option Closing Time,
as the case may be, for a period of not more than seven days, in order
to effect whatever changes may thereby be made necessary in the
Registration Statement or the Prospectus, or in any other documents or
arrangements, and the Company agrees to file promptly any amendment to
the Registration Statement or the Prospectus which in the opinion of
the non-defaulting Underwriter may thereby be made necessary. The term
"Underwriter" as used in this Agreement shall include any person
substituted under this Section with like effect as if such person had
originally been a party to this Agreement with respect to such Shares.
(b) If, after giving effect to any arrangements for the
purchase of the Shares of a defaulting Underwriter by the
non-defaulting Underwriter and the Company as provided in subsection
(a) above, the aggregate number of such Shares which remains
unpurchased does not exceed 10% of the aggregate number of all the
Shares to be purchased at either the Closing Time or the Option Closing
Time, as the case may be, then the Company shall have the right to
require the non-defaulting Underwriter to purchase the number of Shares
which such Underwriter agreed to purchase hereunder at
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either the Closing Time or the Option Closing Time, as the case may be,
and, in addition, to require the non-defaulting Underwriter to purchase
the Shares of such defaulting Underwriter for which such arrangements
have not been made; but nothing herein shall relieve a defaulting
Underwriter from liability for its default.
(c) If, after giving effect to any arrangements for the
purchase of the Shares of a defaulting Underwriter by the
non-defaulting Underwriter and the Company as provided in subsection
(a) above, the aggregate number of such Shares which remains
unpurchased exceeds 10% of the aggregate number of all the Shares to be
purchased at, or if the Company shall not exercise the right described
in subsection (b) above to require the non-defaulting Underwriter to
purchase Shares of the defaulting Underwriter at either the Closing
Time or the Option Closing Time, as the case may be, then this
Agreement shall thereupon terminate, without liability on the part of
the non-defaulting Underwriter or the Company, except for the expenses
to be borne by the Company and the Underwriters as provided in Section
7 hereof and the indemnity and contribution agreements in Section 9
hereof; but nothing herein shall relieve the defaulting Underwriter
from liability for its default.
11. Termination. This Agreement (except for the provisions of Sections
7 and 9 hereof) may be terminated by you, by notice to the Company on or after
the Effective Date and prior to the Closing Time or the Option Closing Time, if
at any time during that period any of the following has occurred:
(a) Any of the conditions specified in Section 8 hereof shall
not have been fulfilled when and as required by this Agreement to be
fulfilled or any of the covenants, representations or warranties
contained herein or in any certificate or document contemplated under
this Agreement to be delivered to you shall not have been satisfied or
fulfilled within the respective times herein provided for, unless
compliance therewith or performance or satisfaction thereof shall have
been expressly waived by you in writing;
(b) Except as disclosed in or contemplated by the Prospectus,
since the respective dates as of which information is given in the
Registration Statement and the Prospectus, any material adverse change
or any development involving a prospective material adverse change in
or affecting the condition (financial or otherwise) assets, business,
properties, prospects or results of operations of the Company and its
Subsidiaries taken as a whole, whether or not arising in the ordinary
course of business;
(c) Any outbreak of hostilities or escalation in existing
hostilities anywhere in the world or other national or international
calamity or crisis or change in economic or political conditions, if
the effect of such outbreak, escalation, calamity, crisis or change on
the financial markets in the United States would, in your reasonable
judgment, make it impracticable to offer for sale or to enforce
contracts made by the Underwriters for the resale of the Shares agreed
to be purchased hereunder;
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(d) Any general suspension of trading in securities on the New
York Stock Exchange, the American Stock Exchange or The Nasdaq Stock
Market or any general limitation on prices for such trading or any
general restrictions on the distribution of securities, all to such a
degree as would, in your reasonable judgment, materially adversely
affect the market for the Shares; or
(e) A banking moratorium shall have been declared by any
federal, Ohio or New York State authorities.
In addition, you may terminate this Agreement by giving notice of a material
breach by the Company of this Agreement at any time after this Agreement becomes
effective. This Agreement may also be terminated as provided in Section 8 and
Section 10; however, the termination of this Agreement under certain
circumstances may require payments by the Company to the Underwriters as
provided in Section 7.
12. Notice. Except as otherwise expressly provided in this Agreement,
(a) whenever advice or a notice, objection, designation, request or report is
given or is required by the provisions of this Agreement to be given to the
Company, such advice, notice, objection, designation, request or report shall be
in writing or by telegraph confirmed in writing, addressed to the Company and
delivered to FirstMerit Corporation, III Xxxxxxx Xxxxx, Xxxxx, Xxxx 00000,
Attention: Xxxx X. Xxxx, Senior Vice President, Mergers & Acquisitions, with a
copy to Xxxxxx & XxXxxxxx L.P.A., 000 Xxxxx Xxxxxxxx Xxxxx, Xxxxx, Xxxx 00000,
Attention: Xxxxx X. X'Xxxx; and (b) whenever advice or a notice, objection,
designation, request or report is given or is required by the provisions of this
Agreement to be given to you, such advice, notice, objection, designation,
request or report shall be in writing, addressed to XxXxxxxx & Company
Securities, Inc., XxXxxxxx Investment Center, 000 Xxxxxxxx Xxxxxx, Xxxxxxxxx,
Xxxx 00000-0000, Attention: Xxxxxxx X. Xxxxxxx, with a copy to Vorys, Xxxxx,
Xxxxxxx and Xxxxx LLP, 00 Xxxx Xxx Xxxxxx, X.X. Xxx 0000, Xxxxxxxx, Xxxx
00000-0000, Attention: Xxxx X. Xxxxx, Esq., or at such other address as a party
hereto may give notice in accordance herewith.
13. Survival of Agreements, Representations and Indemnities. The
respective indemnities and contribution agreements of the Company and the
Underwriters, the representation and warranties of the Company and the
agreements in Sections 7, 9 and 11 set forth in or made pursuant to this
Agreement shall remain in full force and effect, regardless of any termination
or cancellation of this Agreement or any investigation made by or on behalf of
the Underwriters or the Company, or any controlling person or indemnified party
referred to in Section 9 of this Agreement, and shall survive any termination of
this Agreement and/or the delivery of and payment for the Shares.
14. Miscellaneous.
(a) This Agreement is made solely for the benefit of the
Underwriters, the Company, the Company's directors, the Company's
officers who shall have signed the Registration Statement and any
controlling person referred to in Section 9 hereof, and their
respective successors and assigns, and no other person, partnership,
association or
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corporation shall acquire or have any right under or by virtue of this
Agreement. The term "successor" or the term "successors and assigns" as
used in this Agreement shall not include any buyer, as such, of any of
the Shares from any Underwriter.
(b) The information in the Prospectus under the caption
"UNDERWRITING" shall constitute the only information furnished in
writing by or on behalf of the Underwriters for use in connection with
the preparation of the Registration Statement as originally filed or in
any amendment thereto, any Preliminary Prospectus or the Prospectus, as
the case may be.
(c) This Agreement shall supersede any agreement or
understanding, oral or in writing, express or implied, between the
Company and you relating to the sale of any of the Shares.
(d) No change, amendment or supplement to, or waiver of, this
Agreement or any term, provision or condition contained herein, shall
be valid or of any effect unless in writing and signed by the party
against whom such is asserted.
(e) This Agreement shall be governed by and construed in
accordance with the laws of the State of Ohio applicable to contracts
made and to be performed therein without giving effect to the
principles of conflicts of law thereof.
(f) This Agreement may be signed in two or more counterparts
with the same effect as if the signatures to each counterpart were upon
a single instrument, and all such counterparts together shall be deemed
an original of this Agreement.
(g) In the event that any term, provision or covenant of this
Agreement or the application thereof to any circumstance or situation
shall be invalid or unenforceable, in whole or in part, the remainder
hereof and the application of such term, provision or covenant to any
other circumstance or situation shall not be affected thereby, and each
term, provision or covenant of this Agreement shall be valid and
enforceable to the full extent permitted by law.
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If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us the enclosed copies hereof, whereupon it
will be a binding agreement by and between the Company and you in accordance
with its term.
Very truly yours,
FIRSTMERIT CORPORATION
By:_____________________________________
Xxxx X. Xxxxxxx, Chairman
and Chief Executive Officer
Accepted as of the date
first above written:
XxXXXXXX & COMPANY SECURITIES, INC.
By: ________________________________________________
Xxxxxxx X. Xxxxxxx, Managing Director
XXXXX, XXXXXXXX & XXXXX, INC.
By: ________________________________________________
_______________________ , ______________________
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SCHEDULE A
Shares to be Purchased by the Underwriters
Underwriter Number of Firm Shares
----------- ---------------------
Total: 1,200,000
=========
40
SCHEDULE B
Subsidiaries of FirstMerit
40
