Exhibit 1
_________ Shares of Common Stock
(No Par Value, $0.50 Stated Value Per Share)
UNDERWRITING AGREEMENT
_____________, 2005
Xxxxxx, Xxxxxxxx & Company, Incorporated
as Representative of the Several Underwriters
named in Schedule I hereto
000 Xxxxx Xxxxxxxx, 0xx Xxxxx
Xx. Xxxxx, Xxxxxxxx 00000
Dear Sirs:
MainSource Financial Group, Inc., an Indiana corporation (the "COMPANY")
proposes to issue and sell to the several underwriters listed on Schedule I
hereto (the "UNDERWRITERS"), pursuant to the terms of this Agreement,
_____________ shares of the Company's common stock, no par value, $0.50 stated
value per share (the "COMMON STOCK"). The aforementioned ________ shares of
Common Stock to be sold to the Underwriters are herein called the "FIRM SHARES."
Solely for the purpose of covering over-allotments in the sale of the Firm
Shares, the Company further proposes to issue and sell to the Underwriters, at
their option, up to an additional _______ shares of Common Stock (the "OPTION
SHARES") upon exercise of the over-allotment option granted in Section 1 hereof.
The Firm Shares and any Option Shares are herein collectively referred to as the
"DESIGNATED SHARES." Xxxxxx, Xxxxxxxx & Company, Incorporated is acting as the
representative of the Underwriters and in such capacity is sometimes herein
referred to as the "REPRESENTATIVE."
The Company hereby confirms as follows its agreement with each of the
Underwriters in connection with the proposed purchase of the Designated Shares.
1. SALE, PURCHASE AND DELIVERY OF DESIGNATED SHARES, DESCRIPTION OF
DESIGNATED SHARES.
On the basis of the representations, warranties and agreements herein
contained, and subject to the terms and conditions herein set forth, the Company
hereby agrees to issue and sell to each of the Underwriters and each of the
Underwriters agrees, severally and not jointly, to purchase from the Company, at
a purchase price of $____ per share (the "PURCHASE PRICE"), the respective
number of Firm Shares set forth opposite the name of such Underwriter in
Schedule I hereto. The Representative may by notice to the Company amend
Schedule I to add, eliminate or substitute names set forth therein (other than
to eliminate the name of the Representative) and to amend the number of Firm
Shares to be purchased by any firm or corporation listed thereon, PROVIDED that
the total number of Firm Shares listed on Schedule I shall equal ________.
In addition, on the basis of the representations, warranties and agreements
herein contained and subject to the terms and conditions herein set forth, the
Company hereby grants to the Underwriters, severally and not jointly, an option
to purchase all or any portion of the ______ Option Shares, and upon the
exercise of such option in accordance with this Section 1, the Company hereby
agrees to issue and sell to the Underwriters, severally and not jointly, all or
any portion of the Option Shares at the same Purchase Price per share paid for
the Firm Shares; PROVIDED, that the purchase price per share for any Option
Shares purchased upon the exercise of the over-allotment option shall be reduced
by an amount equal to any dividends or distributions declared by the Company and
payable on the Firm Shares but not payable on
the Option Shares. If any Option Shares are to be purchased, each Underwriter,
severally and not jointly, agrees to purchase from the Company that proportion
(subject to adjustment as the Representative may determine to avoid fractional
shares) of the number of Option Shares to be purchased that the number of Firm
Shares set forth opposite the name of such Underwriter in Schedule I hereto (or
such number increased as set forth in Section 9 hereof) bears to _________. The
option hereby granted (the "OPTION") shall expire 30 days after the date upon
which the Registration Statement (as hereinafter defined) becomes effective and
may be exercised only for the purpose of covering over-allotments which may be
made in connection with the offering and distribution of the Firm Shares. The
Option may be exercised in whole or in part at any time (but not more than once)
by the Representative giving notice (confirmed in writing) to the Company
setting forth the number of Option Shares as to which the Underwriters are
exercising the Option and the time, date and place for payment and delivery of
the certificates for such Option Shares. Such time and date of payment and
delivery for the Option Shares (the "OPTION CLOSING DATE") shall be determined
by the Representative, but shall not be earlier than two nor later than five
full business days after the exercise of such Option, nor in any event prior to
the Closing Date (as hereinafter defined). The Option Closing Date may be the
same as the Closing Date.
Payment of the Purchase Price for the Firm Shares shall be made at the
offices of Xxxxxx, Xxxxxxxx & Company, Incorporated, 000 Xxxxx Xxxxxxxx, 0xx
Xxxxx, Xx. Xxxxx, Xxxxxxxx 00000, or such other place as shall be agreed to by
the Representative and the Company, at 10:00 a.m., St. Louis time, on the third
(or, if permitted by Rule 15c6-1(c) of the Securities Exchange Act of 1934, as
amended (the "1934 ACT"), not later than 12:00 p.m. on the fourth) full business
day following the date of this Agreement (the "CLOSING DATE"), or unless
postponed in accordance with the provisions of Section 9. If the Underwriters
exercise the option to purchase any or all of the Option Shares, payment of the
Purchase Price for such Option Shares shall be made on the Option Closing Date
at the offices of Xxxxxx, Xxxxxxxx & Company, Incorporated, or at such other
place as the Company and the Representative shall determine. Such payments shall
be made to an account designated by the Company by wire transfer of same day
funds, in the amount of the aggregate Purchase Price therefor, against delivery
by or on behalf of the Company to the Representative for the respective accounts
of the several Underwriters of certificates for the Designated Shares to be
purchased by the Underwriters.
Certificates for Designated Shares to be purchased by the Underwriters
shall be delivered by the Company to Xxxxxx, Xxxxxxxx & Company, Incorporated
through the facilities of the Depository Trust Company ("DTC"), for the account
of the Underwriters, not later than 10:00 a.m., St. Louis time, on the Closing
Date and, if applicable, the Option Closing Date. Certificates for Designated
Shares to be purchased by the Underwriters shall be made available by the
Company to the Underwriters for inspection, checking and packaging at the office
of DTC or its designated custodian or as the Representative may designate in
writing not later than 1:00 p.m., St. Louis time, on the last business day prior
to the Closing Date and, if applicable, on the last business day prior to the
Option Closing Date.
Time shall be of the essence, and delivery of the certificates for the
Designated Shares at the time and place specified pursuant to this Agreement is
a further condition of the obligations of each Underwriter hereunder.
2. REPRESENTATIONS AND WARRANTIES.
The Company represents and warrants to, and agrees with, each of the
Underwriters that:
(i) The reports filed with the Securities and Exchange Commission (the
"COMMISSION") by the Company under the 1934 Act, and the rules and
regulations thereunder (the "1934 ACT REGULATIONS") at the time they were
filed with the Commission complied as to form in all material respects with
the requirements of the 1934 Act and the 1934 Act Regulations
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and did not contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances in which they were
made, not misleading.
(ii) The Company meets the requirements for the use of the Form S-3
under the Securities Act of 1933, as amended (the "1933 ACT"), and has
carefully prepared and filed with the Commission a registration statement
on Form S-3 (File Number 333-124018) for the registration of the offer and
sale of the Designated Shares under the 1933 Act, including the related
prospectus subject to completion, and one or more amendments to such
registration statement may have been so filed, in each case in conformity
with the requirements of the 1933 Act and the rules and regulations
promulgated thereunder (the "1933 ACT REGULATIONS"). Copies of such
registration statement, including any amendments thereto, each Preliminary
Prospectus (as defined herein) contained therein and the exhibits,
financial statements and schedules to such registration statement, as
finally amended and revised, have heretofore been delivered by the Company
to the Representative. After the execution of this Agreement, the Company
will file with the Commission (A) if such registration statement, as it may
have been amended, has been declared by the Commission to be effective
under the 1933 Act, a prospectus in the form most recently included in an
amendment to such registration statement (or, if no such amendment shall
have been filed, in such registration statement), with such changes or
insertions as are required by Rule 430A of the 1933 Act Regulations ("RULE
430A") or permitted by Rule 424(b) of the 1933 Act Regulations ("RULE
424(b)") and as have been provided to and not objected to by the
Representative prior to (or as are agreed to by the Representative
subsequent to) the execution of this Agreement, or (B) if such registration
statement, as it may have been amended, has not been declared by the
Commission to be effective under the 1933 Act, an amendment to such
registration statement, including a form of final prospectus, necessary to
permit such registration statement to become effective, a copy of which
amendment has been furnished to and not objected to by the Representative
prior to (or is agreed to by the Representative subsequent to) the
execution of this Agreement. As used in this Agreement, the term
"REGISTRATION STATEMENT" means such registration statement, as amended at
the time when it was or is declared effective under the 1933 Act, including
(1) all financial statements and schedules and exhibits thereto, (2) any
information omitted therefrom pursuant to Rule 430A and included in the
Prospectus (as hereinafter defined) (and, in the event any post-effective
amendment thereto or any Rule 462(b) Registration Statement becomes
effective prior to the Closing Date, the term "REGISTRATION STATEMENT" also
means such registration statement as so amended or such Rule 462(b)
Registration Statement, as the case may be), and (3) the documents
incorporated by reference therein which were filed under the 1934 Act or
the 1934 Act Regulations on or before the Effective Date (as defined
below); the term "RULE 462(b) REGISTRATION STATEMENT" means a registration
statement and any amendments thereto filed pursuant to Rule 462(b) of the
1933 Act Regulations relating to the offering covered by the Registration
Statement; the term "PRELIMINARY PROSPECTUS" means each prospectus subject
to completion filed with such registration statement or any amendment
thereto (including the prospectus subject to completion, if any, included
in the Registration Statement and each prospectus filed pursuant to Rule
424(a) under the 0000 Xxx) including the documents incorporated by
reference therein which were filed under the 1934 Act or the 1934 Act
Regulations on or before the issue date of the Preliminary Prospectus; and
the term "PROSPECTUS" means the prospectus first filed with the Commission
pursuant to Rule 424(b)(1) or (4) or, if no prospectus is required to be
filed pursuant to Rule 424(b)(1) or (4), the prospectus included in the
Registration Statement, including the documents incorporated by reference
therein which were filed under the 1934 Act or the 1934 Act Regulations on
or before the issue date of the Prospectus, in each case including the
financial statements and schedules. The date on which the Registration
Statement becomes effective is hereinafter referred to as the "EFFECTIVE
DATE."
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(iii) The documents incorporated by reference in the Registration
Statement, the Preliminary Prospectus or the Prospectus or from which
information is so incorporated by reference, when they were filed with the
Commission, complied in all material respects with the requirements of the
1934 Act and the 1934 Act Regulations, and when read together and with the
other information in the Preliminary Prospectus or the Prospectus, as the
case may be, at the time the Registration Statement became or becomes
effective and at the Closing Date and any Option Closing Date, did not or
will not, as the case may be, contain an untrue statement of a material
fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading, except to the extent such
statements made have been amended or superseded in subsequently filed
documents, but only to the extent that, pursuant to the 1933 Act and the
1933 Act Regulations, such statements are not deemed to be part of the
Registration Statement, Preliminary Prospectus or Prospectus.
(iv) The Company entered into an Agreement and Plan of Merger dated
March 10, 2005 (the "MERGER AGREEMENT"), with The Madison Bank & Trust
Company, an Indiana state chartered bank ("MADISON"), National City
Corporation and MainSource Bank, a wholly-owned subsidiary of the Company,
pursuant to which Madison will be merged with and into MainSource Bank (the
"MERGER"). All or substantially all of the net proceeds from the sale of
the Designated Shares will be used by the Company to provide all or a
portion of the consideration for the Merger as described in the
Registration Statement.
(v) No order preventing or suspending the effectiveness of the
Registration Statement or preventing or suspending the use of any
Preliminary Prospectus or the Prospectus or suspending the qualification or
registration of the Designated Shares for offering or sale in any
jurisdiction has been issued by the Commission, any state or other
jurisdiction or other regulatory body nor has the Commission, any state or
other jurisdiction or other regulatory body, to the knowledge of the
Company, threatened to issue such an order or instituted proceedings for
such purpose. Each Preliminary Prospectus, at the time of filing thereof,
(A) complied in all material respects with the requirements of the 1933 Act
and the 1933 Act Regulations, and (B) did not 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 light of the
circumstances under which they were made, not misleading; PROVIDED,
HOWEVER, that this representation and warranty does not apply to statements
or omissions made in reliance upon and in conformity with information
furnished in writing to the Company by any of the Underwriters expressly
for inclusion in the Prospectus beneath the heading "Underwriting" (such
information referred to herein as the "UNDERWRITERS' INFORMATION"). As of
the date that each Preliminary Prospectus was filed with the Commission or
as of the date that the Prospectus and any amendment or supplement thereto
was filed with the Commission (or, if not filed, on the date provided by
the Company to the Underwriters in connection with the offering and sale of
the Designated Shares), as the case may be, no event has or will have
occurred which should have been set forth in an amendment or supplement to
any Preliminary Prospectus or the Prospectus which has not been set forth
in any Preliminary Prospectus, the Prospectus or such an amendment or
supplement. Each Preliminary Prospectus and the Prospectus will be
identical to the electronically transmitted copies thereof filed with the
Commission pursuant to its Electronic Data Gathering Analysis and Retrieval
("XXXXX") system, except to the extent permitted by Regulation S-T.
(vi) The Registration Statement has been declared effective under the
1933 Act, and no post-effective amendment to the Registration Statement has
been filed with the Commission as of the date of this Agreement. At the
Effective Date and at all times subsequent thereto, up to and including the
Closing Date and, if applicable, the Option Closing Date, the
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Registration Statement and any post-effective amendment thereto (A)
complied and will comply in all material respects with the requirements of
the 1933 Act and the 1933 Act Regulations, and (B) did not and will not
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 not misleading; PROVIDED, HOWEVER, that this representation and
warranty does not apply to Underwriters' Information. At the Effective
Date, the Prospectus, if not filed pursuant to Rule 424(b), will not, and
at the date of any filing pursuant to Rule 424(b) and at all times when the
Prospectus is required to be delivered in connection with offers and sales
of Designated Shares, including, without limitation, the Closing Date and,
if applicable, the Option Closing Date, the Prospectus, as amended or
supplemented, (A) complied and will comply in all material respects with
the requirements of the 1933 Act and the 1933 Act Regulations, and (B) did
not contain and will not 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 light of the circumstances under which they
were made, not misleading; PROVIDED, HOWEVER, that this representation and
warranty does not apply to Underwriters' Information. As of the date that
the Registration Statement was filed with the Commission, no event has or
will have occurred which should have been set forth in an amendment or
supplement to such registration statement which has not then been set forth
in such an amendment or supplement. The Registration Statement will be
identical to the electronically transmitted copy thereof filed with the
Commission pursuant to its XXXXX system, except to the extent permitted by
Regulation S-T.
(vii) The Company is duly incorporated and validly existing under the
laws of the State of Indiana, with full corporate and other power and
authority to own, lease and operate its properties and conduct its business
as described in and contemplated by the Registration Statement and the
Prospectus (or, if the Prospectus is not in existence, in each Preliminary
Prospectus) and as currently being conducted and is duly registered as a
bank holding company and a financial holding company under the Bank Holding
Company Act of 1956, as amended (the "BHC ACT").
(viii) Madison is a state chartered bank duly organized, validly
existing and in good standing under the laws of the State of Indiana, with
full power and authority to own, lease and operate its properties and
conduct its business as currently being conducted.
(ix) The Company has only the direct and indirect subsidiaries
identified on Exhibit A attached hereto and incorporated herein (the
"SUBSIDIARIES"). The Company does not own or control, directly or
indirectly, more than 5% of any class of equity security of any
corporation, association or other entity other than the Subsidiaries. Each
Subsidiary is a corporation, business or statutory trust, limited liability
company, or bank duly organized or incorporated, as the case may be,
validly existing and in good standing under the laws of its respective
jurisdiction of organization. Each such Subsidiary has full power and
authority to own, lease and operate its properties and to conduct its
business as described in and contemplated by the Registration Statement and
the Prospectus (or, if the Prospectus is not in existence, in each
Preliminary Prospectus) and as currently being conducted. The deposit
accounts of MainSource Bank, MainSource Bank of Illinois and Peoples Trust
Company (the "BANKS") and Madison are insured by the Bank Insurance Fund
administered by the Federal Deposit Insurance Corporation (the "FDIC") up
to the maximum amount provided by law, and no proceedings for the
modification, termination or revocation of any such insurance are pending
or, to the knowledge of the Company, threatened.
(x) The Company and each of the Subsidiaries and Madison, is duly
qualified to transact business as a foreign corporation, bank, business or
statutory trust, or limited
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liability company, as the case may be, and is in good standing in each
other jurisdiction in which it owns or leases property or conducts its
business so as to require such qualification and in which the failure to so
qualify could, individually or in the aggregate, have a material adverse
effect on the condition (financial or otherwise), earnings, affairs,
business, prospects or results of operations of the Company and the
Subsidiaries on a consolidated basis.
(xi) All of the issued and outstanding shares of capital stock,
capital securities or membership interests of the Subsidiaries (A) have
been duly authorized and are validly issued, (B) are fully paid and
nonassessable, and (C) are wholly owned, directly or indirectly, by the
Company free and clear of any security interest, mortgage, pledge, lien,
encumbrance, restriction upon voting or transfer, preemptive rights, claim,
equity or other defect, except for (1) shares of preferred stock of MSB
Realty, Inc. held by third parties and (2) security interests granted by
the Company in capital stock of the Banks and other Subsidiaries to secure
borrowings by the Company from a third-party lender as described in the
Registration Statement and the Prospectus (or, if the Prospectus is not in
existence, in each Preliminary Prospectus). There are no outstanding
rights, warrants or options to acquire or instruments convertible into or
exchangeable for any capital stock or equity securities of the
Subsidiaries.
(xii) The capital stock of the Company conforms to the description
thereof contained in the Prospectus (or, if the Prospectus is not in
existence, in each Preliminary Prospectus). The outstanding shares of
capital stock of the Company have been duly authorized and validly issued
and are fully paid and nonassessable, and no such shares were issued in
violation of the preemptive or similar rights of any security holder of the
Company. No person has any preemptive or similar right to purchase any
shares of capital stock or equity securities of the Company. Except as
disclosed in the Prospectus (or, if the Prospectus is not in existence, in
each Preliminary Prospectus), and except for options granted during the
first quarter of 2005 under the Company's 2003 Stock Option Plan which are
not yet required to be reflected in the Company's filings under the 1934
Act and 1934 Act Regulations, there are no outstanding rights, options or
warrants to acquire any securities of the Company, and there are no
outstanding securities convertible into or exchangeable for any securities
of the Company and no restrictions upon the voting or transfer of any
capital stock of the Company pursuant to the Company's articles of
incorporation or bylaws or any agreement or other instrument to which the
Company is a party or by which the Company is bound. As of the date set
forth therein, the Company had an authorized and outstanding capitalization
as set forth in the Registration Statement and the Prospectus (or, if the
Prospectus is not in existence, in each Preliminary Prospectus) and the
capitalization of the Company immediately following the Effective Time will
be as set forth in the Prospectus (or, if the Prospectus is not in
existence, each Preliminary Prospectus) under the caption "Capitalization"
(except for subsequent issuances, if any, pursuant to this Agreement or
reservations or employee benefit plans or cash dividends referred to in the
Prospectus (or, if the Prospectus is not in existence, in each Preliminary
Prospectus)).
(xiii) The Company has all requisite power and authority to issue,
sell and deliver the Designated Shares in accordance with and upon the
terms and conditions set forth in this Agreement, the Registration
Statement and the Prospectus (or, if the Prospectus is not in existence,
each Preliminary Prospectus). All corporate action required to be taken by
the Company for the reservation, authorization, issuance, sale and delivery
of the Designated Shares in accordance with such terms and conditions has
been validly and sufficiently taken. The Designated Shares, when delivered
and paid for in accordance with this Agreement, will be duly and validly
issued and outstanding and will be fully paid and nonassessable, will not
be issued in violation of or subject to any preemptive or similar rights,
and will conform to the description thereof in the Registration Statement
and the Prospectus (or, if the Prospectus is not
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in existence, each Preliminary Prospectus). None of the Designated
Shares, immediately prior to delivery, will be subject to any security
interest, lien, mortgage, pledge, encumbrance, restriction upon voting or
transfer, preemptive rights, claim, equity or other defect.
(xiv) The Merger Agreement was duly authorized, executed and delivered
by the Company, Madison and the other parties thereto and constitutes a
valid, legal and binding agreement of the Company, Madison and the other
parties thereto, enforceable against the Company, Madison and such parties
in accordance with its terms, and conforms to the description thereof
contained in the Registration Statement and the Prospectus (or, if the
Prospectus is not in existence, each Preliminary Prospectus). The net
proceeds from the sale of the Designated Shares and the Company's cash on
hand will be sufficient to pay the cash consideration payable to National
City Corporation pursuant to the Merger Agreement and related fees and
expenses.
(xv) The Company and the Subsidiaries have complied with all foreign,
federal, state and local statutes, regulations, ordinances and rules
applicable to the ownership and operation of their properties or the
conduct of their businesses as described in and contemplated by the
Registration Statement and the Prospectus (or, if the Prospectus is not in
existence, in each Preliminary Prospectus) and as currently being
conducted, except such noncompliance which, individually or in the
aggregate, has not had or will not have a material adverse effect on the
condition (financial or otherwise), earnings, affairs, business, prospects
or results of operations of the Company and the Subsidiaries on a
consolidated basis. Neither the Company nor any non-banking Subsidiary
engages directly or indirectly in any activity prohibited by the Board of
Governors of the Federal Reserve System (the "FRB") or the BHC Act or the
regulations promulgated thereunder.
(xvi) The Company and the Subsidiaries have all material permits,
easements, consents, licenses, franchises and other governmental and
regulatory authorizations from all appropriate federal, state, local or
other public authorities ("PERMITS") as are necessary to own and lease
their properties and conduct their businesses in the manner described in
and contemplated by the Registration Statement and the Prospectus (or, if
the Prospectus is not in existence, in each Preliminary Prospectus) and as
currently being conducted, except where the failure to possess such Permits
has not had or will not have, individually or in the aggregate a material
adverse effect on the condition (financial or otherwise), earnings,
affairs, business, prospects or results of operations of the Company and
the Subsidiaries on a consolidated basis. All such Permits are in full
force and effect and each of the Company and the Subsidiaries are in all
material respects complying therewith, and no event has occurred that
allows, or after notice or lapse of time would allow, revocation or
termination thereof or will result in any other material impairment of the
rights of the holder of any such Permit. Such Permits contain no
restrictions that would materially impair the ability of the Company or the
Subsidiaries to conduct their businesses in the manner consistent with
their past practices. Neither the Company nor any of the Subsidiaries have
received notice or otherwise has knowledge of any proceeding or action
relating to the revocation or modification of any such Permit.
(xvii) Neither the Company nor any of the Subsidiaries are in breach
or violation of their corporate charter, by-laws or other governing
documents. Neither the Company nor any of the Subsidiaries is, and to the
knowledge of the Company no other party is, in violation, breach or default
(with or without notice or lapse of time or both) in the performance or
observance of any term, covenant, agreement, obligation, representation,
warranty or condition contained in (A) any contract, indenture, mortgage,
deed of trust, loan or credit agreement, note, lease, franchise, license,
Permit or any other agreement or instrument to which it is a party or by
which it or any of its properties may be bound, which such breach,
violation or default,
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individually or in the aggregate with other breaches, violations or
defaults, has or will have a material adverse effect on the condition
(financial or otherwise), earnings, affairs, business, prospects or results
of operations of the Company and the Subsidiaries on a consolidated basis,
and to the knowledge of the Company, no other party has asserted that the
Company or any of the Subsidiaries is in such violation, breach or default,
or (B) any order, decree, judgment, rule or regulation of any court,
arbitrator, government, or governmental agency or instrumentality, domestic
or foreign, having jurisdiction over the Company or the Subsidiaries or any
of their respective properties the breach, violation or default of which,
individually or in the aggregate with other breaches, violations or
defaults, has or will have a material adverse effect on the condition
(financial or otherwise), earnings, affairs, business, prospects or results
of operations of the Company and the Subsidiaries on a consolidated basis.
(xviii) The execution, delivery and performance of this Agreement and
the consummation of the transactions contemplated by this Agreement, the
Merger Agreement, the Registration Statement, the Prospectus (or, if the
Prospectus is not in existence, in each Preliminary Prospectus) (including,
without limitation, the issuance and sale of the Designated Shares and the
use of proceeds from the sale of the Designated Shares as described in the
Prospectus under the caption "Use of Proceeds") do not and will not
conflict with, result in the creation or imposition of any material lien,
claim, charge, encumbrance or restriction upon any property or assets of
the Company or the Subsidiaries or the Designated Shares pursuant to,
constitute a breach or violation of, or constitute a default under, with or
without notice or lapse of time or both, any of the terms, provisions or
conditions of (A) the charter or by-laws or other governing documents of
the Company or the Subsidiaries, (B) any contract, indenture, mortgage,
deed of trust, loan or credit agreement, note, lease, franchise, license,
Permit or any other agreement or instrument to which the Company or the
Subsidiaries is a party or by which any of them or any of their respective
properties may be bound, or (C) any order, decree, judgment, rule or
regulation of any court, arbitrator, government, or governmental agency or
instrumentality, domestic or foreign, having jurisdiction over the Company
or the Subsidiaries or any of their respective properties which conflict,
creation, imposition, breach, violation or default described in clause (B)
or (C) has or will have, either individually or in the aggregate, a
material adverse effect on the condition (financial or otherwise),
earnings, affairs, business, prospects or results of operations of the
Company and the Subsidiaries on a consolidated basis. No authorization,
approval, consent or order of or filing, registration or qualification
with, any person (including, without limitation, any court, governmental
body or authority) is required in connection with the transactions
involving the issuance and sale of the Designated Shares as contemplated by
this Agreement, the Registration Statement and the Prospectus (or any
Preliminary Prospectus), except such as have been obtained under the 1933
Act and from the Nasdaq National Market relating to the listing of the
Designated Shares, and such as may be required under state securities laws
or Interpretations or Rules of the National Association of Securities
Dealers, Inc. ("NASD") in connection with the purchase and distribution of
the Designated Shares by the Underwriters.
(xix) The Company has all requisite power and authority to enter into
this Agreement and this Agreement has been duly and validly authorized,
executed and delivered by the Company and constitutes the legal, valid and
binding agreement of the Company, enforceable against the Company in
accordance with its terms, except as the enforcement thereof may be limited
by bankruptcy, insolvency, reorganization or similar laws affecting the
rights of creditors generally.
(xx) The Company and the Subsidiaries have good and marketable title
in fee simple to all real property and good title to all personal property
owned by them and material to
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their business, in each case free and clear of all security interests,
liens, mortgages, pledges, encumbrances, restrictions, claims, equities and
other defects except such as are referred to in the Prospectus (or, if the
Prospectus is not in existence, in each Preliminary Prospectus) or such as
do not materially affect the value of such property in the aggregate and do
not materially interfere with the use made or proposed to be made of such
property; and all of the leases under which the Company or the Subsidiaries
hold real or personal property are valid and existing leases, enforceable
against the parties thereto, and in full force and effect with such
exceptions as are not material and do not materially interfere with the use
made or proposed to be made of such real or personal property, and neither
the Company nor any of the Subsidiaries is in default in any material
respect of any of the terms or provisions of any material leases.
(xxi) Xxxxx Xxxxxx and Company LLC, who have certified certain of the
consolidated financial statements of the Company and the Subsidiaries
including the notes thereto, incorporated by reference in the Registration
Statement and Prospectus, are independent public accountants with respect
to the Company and the Subsidiaries, as required by the 1933 Act and the
1933 Act Regulations.
(xxii)
(A) The consolidated financial statements including the notes thereto,
incorporated by reference in the Registration Statement and the Prospectus
(or, if the Prospectus is not in existence, in each Preliminary Prospectus)
with respect to the Company and the Subsidiaries comply with the 1933 Act
and the 1933 Act Regulations and present fairly in all material respects
the consolidated financial position of the Company and the Subsidiaries as
of the dates indicated and the consolidated results of operations, cash
flows and shareholders' equity of the Company and the Subsidiaries for the
periods specified and have been prepared in conformity with generally
accepted accounting principles applied on a consistent basis. The selected
consolidated financial data concerning the Company and the Subsidiaries
included in the Registration Statement and the Prospectus (or, if the
Prospectus is not in existence, in each Preliminary Prospectus) comply in
all material respects with the 1933 Act and the 1933 Act Regulations,
present fairly, in all material respects, the information set forth
therein, have been derived from the financial statements or operating
records of the Company and have been compiled on a basis consistent with
that of the consolidated financial statements of the Company and the
Subsidiaries in the Registration Statement and the Prospectus (or, if the
Prospectus is not in existence, in each Preliminary Prospectus).
(B) The other financial, statistical and numerical information
included or incorporated by reference in the Registration Statement and the
Prospectus (or such Preliminary Prospectus) is accurate in all material
respects, complies with the 1933 Act and the 1933 Act Regulations, has been
derived from the financial statements or operating records of the Company
or the financial statements or operating records of Madison made available
to the Company, as the case may be, presents fairly, in all material
respects, the information shown therein, and to the extent applicable has
been compiled on a basis consistent with the consolidated financial
statements of the Company and the Subsidiaries included in the Registration
Statement and the Prospectus (or, if the Prospectus is not in existence, in
each Preliminary Prospectus).
(xxiii) The Company has established and maintains disclosure controls
and procedures (as such term is defined in Rule 13a-15 under the 1934 Act),
which (A) are designed to ensure that material information relating to the
Company, including its consolidating subsidiaries, is made known to the
Company's principal executive officer and its principal
9
financial officer by others within those entities, particularly during
the periods in which the periodic reports required under the 1934 Act are
being prepared, (B) have been evaluated for effectiveness as of the end of
the relevant period covered by the Company's most recent annual or
quarterly report filed with the Commission, and (C) are effective in all
material respects to perform the functions for which they were established.
(xxiv) The Company and each of the Subsidiaries maintains internal
control over financial reporting (as such term is defined in Rule 13a-15
under the 0000 Xxx) and a system of internal accounting controls sufficient
to provide reasonable assurance that (A) transactions are executed in
accordance with management's general or specific authorizations, (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. The books, records and accounts and systems of internal
accounting controls of the Company and its Subsidiaries comply in all
material respects with the requirements of Section 13(b)(2) of the 1934
Act. Based on the evaluation of the Company's controls and procedures
described above, the Company is not aware of (1) any significant deficiency
in the design or operation of its internal control over financial reporting
which could adversely affect the Company's ability to record, process,
summarize and report financial data or any material weakness in its
internal control over financial reporting, other than significant
deficiencies identified by Xxxxx Xxxxxx and Company, LLC as of December 31,
2004 in its letter to Company management dated March 10, 2005 and disclosed
to the Underwriters, or (2) any fraud, whether or not material, that
involves management or other employees who have a significant role in the
Company's internal control over financial reporting. Since the most recent
evaluation of the Company's controls and procedures described above, there
have been no significant changes in its internal control over financial
reporting or in other factors that could significantly affect its internal
control over financial reporting.
(xxv) There is and has been no failure on the part of the Company and
any of the Company's directors or officers, in their capacities as such, to
comply with any provision of the Sarbanes Oxley Act of 2002 and the rules
and regulations promulgated therewith, including Section 402 related to
loans and Sections 302 and 906 related to certifications.
(xxvi) Since the respective dates as of which information is given in
the Registration Statement and the Prospectus (or, if the Prospectus is not
in existence, in each Preliminary Prospectus), except as otherwise stated
therein:
(A) neither the Company nor any of the Subsidiaries has sustained any
loss or interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor dispute or
court or governmental action, order or decree which is or will be material,
individually or in the aggregate, to the condition (financial or
otherwise), earnings, affairs, business, prospects or results of operations
of the Company and the Subsidiaries on a consolidated basis;
(B) there has not been any material adverse change in, or any
development which has had or will have a material adverse effect on, the
condition (financial or otherwise), earnings, affairs, business, prospects
or results of operations of the Company and the Subsidiaries on a
consolidated basis, whether or not arising in the ordinary course of
business;
10
(C) neither the Company nor any of the Subsidiaries has incurred any
liabilities or obligations, direct or contingent, or entered into any
material transactions, other than in the ordinary course of business, which
are or will be material, individually or in the aggregate, to the condition
(financial or otherwise), earnings, affairs, business, prospects or results
of operations of the Company and the Subsidiaries on a consolidated basis;
(D) the Company has not declared or paid any dividend, and neither the
Company nor any of the Subsidiaries has become delinquent in the payment of
principal or interest on any outstanding borrowings;
(E) there has not been any material change in the capital stock,
equity securities, long-term debt, obligations under capital leases or,
other than in the ordinary course of business, short-term borrowings of the
Company or the Subsidiaries; and
(F) there has not occurred any other event and there has arisen no set
of circumstances required by the 1933 Act or the 1933 Act Regulations to be
disclosed in the Registration Statement or the Prospectus which has not
been so set forth in the Registration Statement or the Prospectus as fairly
and accurately summarized therein.
(xxvii) Since the respective dates as of which information is given in
the Registration Statement, the Prospectus (or, if the Prospectus is not in
existence, in each Preliminary Prospectus), to the knowledge of the Company
there has not been any material adverse change in the condition (financial
or otherwise), earnings, affairs, business, prospects or results of
operation of Madison, whether or not arising in the ordinary course of
business.
(xxviii) No charge, investigation, action, suit or proceeding is
pending or, to the knowledge of the Company, threatened, against or
affecting the Company or the Subsidiaries and, to the knowledge of the
Company, no charge, investigation, action, suit or proceeding is pending or
threatened against or affecting Madison or any of their respective
properties before or by any court or any regulatory, administrative or
governmental official, commission, board, agency or other authority or
body, or any arbitrator, and there is no factual basis for any such charge,
investigation, action, suit or proceeding, wherein an unfavorable decision,
ruling or finding, individually or in the aggregate with other unfavorable
decisions, rulings or findings, has had or will have a material adverse
effect on the consummation of this Agreement or the transactions
contemplated herein or the condition (financial or otherwise), earnings,
affairs, business, prospects or results of operations of the Company and
the Subsidiaries on a consolidated basis, or which is required to be
disclosed in the Registration Statement or the Prospectus (or, if the
Prospectus is not in existence, in each Preliminary Prospectus) and is not
so disclosed.
(xxix) There are no contracts or other documents required to be filed
as exhibits to the Registration Statement by the 1933 Act or the 1933 Act
Regulations which have not been filed as exhibits or incorporated by
reference into the Registration Statement, or that are required to be
summarized in the Prospectus (or, if the Prospectus is not in existence, in
each Preliminary Prospectus) that are not so summarized.
(xxx) The Company has not taken, directly or indirectly, any action
designed to result in or which has constituted or which might cause or
result in stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the Designated Shares, and the
Company is not aware of any such action taken or to be taken by any
affiliate of the Company.
11
(xxxi) The Company and the Subsidiaries own, or possess adequate
rights to use, all patents, copyrights, trademarks, service marks, trade
names and other rights necessary to conduct the businesses now conducted by
them in all material respects or as described in the Prospectus (or, if the
Prospectus is not in existence, in each Preliminary Prospectus) and neither
the Company nor the Subsidiaries have received any notice of infringement
or conflict with asserted rights of others with respect to any patents,
copyrights, trademarks, service marks, trade names or other rights which,
individually or in the aggregate, if the subject of an unfavorable
decision, ruling or finding, has or will have a material adverse effect on
the condition (financial or otherwise), earnings, affairs, business,
prospects or results of operations of the Company and the Subsidiaries on a
consolidated basis, and the Company does not know of any basis for any such
infringement or conflict.
(xxxii) No labor dispute involving the Company or the Subsidiaries
exists or, to the knowledge of the Company, is imminent which, individually
or in the aggregate with other disputes, has or will have a material
adverse effect on the condition (financial or otherwise), earnings,
affairs, business, prospects or results of operations of the Company and
the Subsidiaries on a consolidated basis or which is required to be
disclosed in the Prospectus (or, if the Prospectus is not in existence, in
each Preliminary Prospectus). Neither the Company nor any of the
Subsidiaries has received notice of any existing or threatened labor
dispute by the employees of any of its principal suppliers, customers or
contractors which, individually or in the aggregate with other disputes,
has or will have a material adverse effect on the condition (financial or
otherwise), earnings, affairs, business, prospects or results of operations
of the Company and the Subsidiaries on a consolidated basis.
(xxxiii) The Company and the Subsidiaries have timely and properly
prepared and filed all necessary federal, state, local and foreign tax
returns which are required to be filed and have paid all taxes shown as due
thereon and have paid all other taxes and assessments to the extent that
the same shall have become due, except such as are being contested in good
faith or where the failure to so timely and properly prepare and file,
individually or in the aggregate, has not had or will not have a material
adverse effect on the condition (financial or otherwise), earnings,
affairs, business, prospects or results of operations of the Company and
the Subsidiaries on a consolidated basis. Other than as described in the
Prospectus (or, if the Prospectus is not in existence, each Preliminary
Prospectus), the Company has no knowledge of any tax deficiency which has
been or might be assessed against the Company or the Subsidiaries which, if
the subject of an unfavorable decision, ruling or finding, individually or
in the aggregate, has or will have a material adverse effect on the
condition (financial or otherwise), earnings, affairs, business, prospects
or results of operations of the Company and the Subsidiaries on a
consolidated basis.
(xxxiv) Each of the contracts, agreements and instruments material to
the condition (financial or otherwise), earnings, affairs, business,
prospects or results of operations of the Company and its Subsidiaries on a
consolidated basis, or listed, described, or attached as an exhibit to the
Company's Annual Report on Form 10-K for the year ended December 31, 2004
(the "FORM 10-K"), or listed, described, or attached as an exhibit to the
Company's Quarterly Report on Form 10-Q for the quarter ended March 31,
2005, in each case as filed with the Commission, is in full force and
effect and is the legal, valid and binding agreement of the Company or the
Subsidiaries and (to the knowledge of the Company) the other parties
thereto, enforceable in accordance with its terms, except as the
enforcement thereof may be limited by bankruptcy, insolvency,
reorganization or similar laws affecting the rights of creditors generally.
Neither the Company nor any Subsidiary is (with or without notice or lapse
of time or both) in breach or default in any material respect under any
such contacts, agreements or instruments
12
referred to in the preceding sentence (or upon consummation of the
transactions contemplated by this Agreement or the Merger Agreement will be
in breach or default in any material respect thereunder) and, to the
knowledge of the Company, no other party to any such agreement is (with or
without notice or lapse of time or both) in breach or default in any
material respect thereunder.
(xxxv) No relationship, direct or indirect, exists between or among
the Company or the Subsidiaries, on the one hand, and the directors,
officers, trustees, shareholders, customers or suppliers of the Company or
the Subsidiaries, on the other hand, which is required to be described in
the Registration Statement and the Prospectus (or, if the Prospectus is not
in existence, in each Preliminary Prospectus) which is not adequately
described therein.
(xxxvi) No person has the right to request or require the Company or
the Subsidiaries to register any securities for offering and sale under the
1933 Act by reason of the filing of the Registration Statement with the
Commission or the issuance and sale of the Designated Shares.
(xxxvii) The Common Stock has been approved for quotation on the
Nasdaq National Market, and will be quoted at or immediately prior to the
Closing. The Company has filed with The Nasdaq Stock Market, Inc. a
"Notification Form: Listing of Additional Shares" with respect to the
Designated Shares.
(xxxviii) Except as described in the Prospectus (or, if the Prospectus
is not in existence, in each Preliminary Prospectus), and except for
statutory or banking regulatory restrictions applicable to banks and bank
holding companies and their affiliates in general, there are no contractual
encumbrances or restrictions or legal restrictions on the ability of the
Subsidiaries (A) to pay dividends or make any other distributions on its
capital stock or to pay any indebtedness owed to the Company, (B) to make
any loans or advances to, or investments in, the Company, or (C) to
transfer any of its property or assets to the Company.
(xxxix) The Company is not an "investment company," an entity
"controlled" by an "investment company" or an "investment adviser" within
the meaning of the Investment Company Act of 1940, as amended (the
"INVESTMENT COMPANY ACT") or the Investment Advisers Act of 1940, as
amended (the "INVESTMENT ADVISERS ACT").
(xl) The Company has not distributed and will not distribute prior to
the Closing Date or, if applicable, the Option Closing Date, any offering
material in connection with the offering of the Designated Shares
contemplated by this Agreement, other than a Preliminary Prospectus, the
Prospectus, the Registration Statement and the other materials permitted by
the 1933 Act and the 1933 Act Regulations and reviewed by the
Representative.
(xli) The activities of the Company and the Subsidiaries are permitted
under applicable federal and state banking laws and regulations. The
Company has all necessary approvals, including the approval of the FDIC,
the Indiana Department of Financial Institutions (the "DFI") and the FRB,
as applicable, to own the capital stock of the Subsidiaries. Neither the
Company nor any of the Subsidiaries is a party or subject to any agreement
or memorandum with, or directive or other order issued by, the FRB, the
FDIC, the DFI or other regulatory authority having jurisdiction over it
(each, a "REGULATOR," and collectively, the "REGULATORS"), which imposes
any restrictions or requirements not generally applicable to entities of
the same type as the Company and the Subsidiaries. Neither the Company nor
any Subsidiary is subject to any order or other directive from any
Regulator to make any material change in the method of
13
conducting their respective businesses, and no such directive is pending or
threatened by such Regulators.
(xlii) The Banks and the other Subsidiaries have properly administered
all accounts for which they act as a fiduciary, including but not limited
to accounts for which they serve as a trustee, agent, custodian, personal
representative, guardian, conservator or investment advisor, in accordance
with the terms of the governing documents and applicable state and federal
law and regulation and common law, except where the failure to be in
compliance, individually or in the aggregate, has not had or will not have
a material adverse effect upon the condition (financial or otherwise),
earnings, affairs, business, prospects or results of operations of the
Company and the Subsidiaries on a consolidated basis. Neither the Banks,
the other Subsidiaries nor any of their directors, officers or employees
has committed any material breach of trust with respect to any such
fiduciary account, and the accountings for each such fiduciary account are
true and correct in all material respects and accurately reflect the assets
of such fiduciary account in all material respects.
(xliii) Other than as contemplated by this Agreement and as disclosed
in the Registration Statement and the Prospectus (or, if the Prospectus is
not in existence, the Preliminary Prospectus), the Company has not incurred
any liability for any finder's or broker's fee or agent's commission in
connection with the execution and delivery of this Agreement or the
consummation of the transactions contemplated thereby.
(xliv) No report or application filed by the Company or any of its
Subsidiaries with the FRB, the FDIC, the DFI or any other Regulator, as of
the date it was filed or amended, contained an untrue statement of fact or
omitted to state any fact required to be stated therein or necessary to
make the statements therein not misleading when made or failed to comply
with the applicable requirements of the FRB, the FDIC, the DFI or such
other Regulator, as the case may be.
(xlv) None of the Company, the Subsidiaries or, to the knowledge of
the Company, any other person associated with or acting on behalf of the
Company or any of the Subsidiaries, including, without limitation, any
director, officer, agent, or employee of any of the Subsidiaries or the
Company has, directly or indirectly, while acting on behalf of such Company
or Subsidiary (i) used any corporate funds for unlawful contributions,
gifts, entertainment, or other unlawful expenses relating to political
activity; (ii) made any unlawful contribution to any candidate for foreign
or domestic office, or to any foreign or domestic government officials or
employees 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 or to foreign or domestic political
parties or campaigns from corporate funds, or failed to disclose fully any
contribution in violation of law; (iii) violated any provision of the
Foreign Corrupt Practices Act of 1977, as amended; or (iv) made any other
payment of funds for the Company or a Subsidiary or retained any funds
which constitute a violation of any law, rule or regulation, or which was
or is required to be disclosed in the Registration Statement or the
Prospectus pursuant to the requirements of the 1933 Act or the 1933 Act
Regulations.
(xlvi) Neither the Company nor any Subsidiary has any liability under
any "pension plan," as defined in the Employee Retirement Income Security
Act of 1974, as amended ("ERISA"). The employee benefit plans, including
employee welfare benefit plans, of the Company and each of the Subsidiaries
(the "EMPLOYEE PLANS") have been operated in material compliance with the
applicable provisions of ERISA, the Internal Revenue Code of 1986, as
amended (the "CODE"), all regulations, rulings and announcements
promulgated or issued
14
thereunder and all other applicable governmental laws and regulations
(except to the extent such noncompliance, individually or in the aggregate,
has not had or will not have a material adverse effect upon the condition
(financial or otherwise) earnings, affairs, business, prospects or results
of operations of the Company or the Subsidiaries on a consolidated basis).
No reportable event under Section 4043(c) of ERISA has occurred with
respect to any Employee Plan of the Company or any of the Subsidiaries for
which the reporting requirements have not been waived by the Pension
Benefit Guaranty Corporation. No prohibited transaction under Section 406
of ERISA, for which an exemption does not apply, has occurred with respect
to any Employee Plan of the Company or any of the Subsidiaries. There are
no pending or, to the knowledge of the Company, threatened, claims by or on
behalf of any Employee Plan, by any employee or beneficiary covered under
any such Employee Plan or by any governmental authority or otherwise
involving such Employee Plans or any of their respective fiduciaries (other
than for routine claims for benefits).
(xlvii) Except as described in the Registration Statement and the
Prospectus (or, if the Prospectus is not in existence, the Preliminary
Prospectus), there is no factual basis for any action, suit or other
proceeding involving the Company or the Subsidiaries or any of their
material assets for any failure of the Company or any of the Subsidiaries,
or any predecessor thereof, to comply with any requirements of federal,
state or local regulation relating to air, water, solid waste management,
hazardous or toxic substances, or the protection of health or the
environment; except where such action, suit or other proceeding,
individually or in the aggregate with other actions, suits or proceedings,
has not had or will not have a material adverse effect on the condition
(financial or otherwise), earnings, affairs, business, prospects or results
of operations of the Company and the Subsidiaries on a consolidated basis.
Except as described in the Registration Statement and the Prospectus (or,
if the Prospectus is not in existence, in each Preliminary Prospectus) or
as, individually or in the aggregate, has not had or will not have a
material adverse effect on the condition (financial or otherwise),
earnings, affairs, business, prospects or results of operations of the
Company and the Subsidiaries on a consolidated basis, to the knowledge of
the Company, none of the property owned or leased by the Company or any of
the Subsidiaries or their predecessors is contaminated with any waste or
hazardous substances, and neither the Company nor any of the Subsidiaries
may be deemed an "owner or operator" of a "facility" or "vessel" which
owns, possesses, transports, generates or disposes of a "hazardous
substance" as those terms are defined in Section 9601 of the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, 42 U.S.C.
Section 9601 ET SEQ.
(xlviii) The Company and the Subsidiaries maintain insurance covering
their properties, personnel and business. Such insurance insures against
such losses and risks as are adequate to protect in all material respects
the Company and the Subsidiaries and their businesses. Neither the Company
nor any of the Subsidiaries has received notice from any insurer or agent
of such insurer that substantial capital improvements or other expenditures
shall have to be made in order to continue such insurance. All such
insurance is outstanding and duly in force on the date hereof and shall be
outstanding and duly in force on the Closing Date and, if applicable, the
Option Closing Date, with only such exceptions as has not had and will not
have a material adverse effect on the condition (financial or otherwise),
earnings, affairs, business, prospects or results of operations of the
Company and the Subsidiaries on a consolidated basis.
(xlix) Other than the Merger, neither the Company nor any Subsidiary
has any agreement or understanding with any person (A) concerning the
future acquisition by the Company or the Banks of a controlling interest in
any entity, or (B) concerning the future acquisition by any person of a
controlling interest in the Company or any Subsidiary, in either case that
is required by the 1933 Act or the 1933 Act Regulations to be disclosed by
the Company
15
that is not disclosed in the Prospectus (or, if the Prospectus is not in
existence, in each Preliminary Prospectus).
For purposes of this Section 2, all representations and warranties that
specifically refer to Madison or National City Corporation shall be deemed to be
qualified by the phrase, "to the best of the Company's knowledge after due
inquiry", it being understood that such inquiry is limited to all diligence
conducted by the Company and its agents in connection with the Merger, and the
representations and warranties made by Madison or National City Corporation in
the Merger Agreement.
3. OFFERING BY THE UNDERWRITERS.
After the Registration Statement becomes effective or, if the Registration
Statement is already effective, after this Agreement becomes effective, the
Underwriters propose to offer the Firm Shares for sale to the public upon the
terms and conditions set forth in the Prospectus. The Underwriters may from time
to time thereafter reduce the public offering price and change the other selling
terms, provided the proceeds to the Company shall not be reduced as a result of
such reduction or change.
The Underwriters may reserve and sell such of the Designated Shares
purchased by the Underwriters as the Underwriters may elect to dealers chosen by
them (the "SELECTED DEALERS") at the public offering price set forth in the
Prospectus less the applicable Selected Dealers' concessions set forth therein,
for re-offering by Selected Dealers to the public at the public offering price.
The Underwriters may allow, and Selected Dealers may re-allow, a concession set
forth in the Prospectus to certain other brokers and dealers.
4. CERTAIN COVENANTS OF THE COMPANY.
The Company covenants with the Underwriters as follows:
(a) The Company shall cause the Registration Statement and any amendments
thereto, if not effective at the time of execution of this Agreement, to become
effective as promptly as possible. If the Registration Statement has become or
becomes effective pursuant to Rule 430A and information has been omitted
therefrom in reliance on Rule 430A, then, the Company will prepare and file in
accordance with Rule 430A and Rule 424(b) copies of the Prospectus or, if
required by Rule 430A, a post-effective amendment to the Registration Statement
(including the Prospectus) containing all information so omitted and will
provide evidence satisfactory to the Representative of such timely filing.
(b) The Company shall notify the Representative immediately, and confirm
such notice in writing:
(i) when the Registration Statement, or any post-effective amendment
to the Registration Statement, has become effective, or when the Prospectus
or any supplement to the Prospectus or any amended Prospectus has been
filed;
(ii) of the receipt of any comments or requests from the Commission
relating in any way to the Registration Statement, any Preliminary
Prospectus, the Prospectus or any amendments or supplements to any of the
aforementioned, and of any request of the Commission to amend or supplement
the Registration Statement, any Preliminary Prospectus or the Prospectus or
for additional information; and
(iii) of the issuance by the Commission or any state or other
regulatory body of any stop order or other order suspending the
effectiveness of the Registration Statement,
16
preventing or suspending the use of any Preliminary Prospectus or the
Prospectus, or suspending the qualification of any of the Designated Shares
for offering or sale in any jurisdiction or the institution or threat of
institution of any proceedings for any of such purposes. The Company shall
use its best efforts to prevent the issuance of any such stop order or of
any other such order and if any such order is issued, to cause such order
to be withdrawn or lifted as soon as possible.
(c) The Company shall furnish to the Underwriters, from time to time
without charge, as soon as available, as many copies as the Underwriters may
reasonably request of (i) the registration statement as originally filed and of
all amendments thereto, in executed form, including exhibits, whether filed
before or after the Registration Statement becomes effective, (ii) all exhibits
and documents incorporated therein or filed therewith, (iii) all consents and
certificates of experts in executed form, (iv) the Preliminary Prospectus and
all amendments and supplements thereto, and (v) the Prospectus, and all
amendments and supplements thereto.
(d) During the time when a prospectus is required to be delivered under the
1933 Act, the Company shall comply with the 1933 Act and the 1933 Act
Regulations and the 1934 Act and the 1934 Act Regulations so as to permit the
completion of the distribution of the Designated Shares as contemplated herein
and in the Prospectus. The Company shall not file any amendment to the
registration statement as originally filed or to the Registration Statement and
shall not file any amendment thereto or make any amendment or supplement to any
Preliminary Prospectus or to the Prospectus of which the Representative shall
not previously have been advised in writing and provided a copy a reasonable
time prior to the proposed filings thereof or to which the Representative or
counsel for the Underwriters shall reasonably object. If it is necessary, in the
Representative's reasonable opinion or in the reasonable opinion of counsel to
the Underwriters, to amend or supplement the Registration Statement or the
Prospectus in connection with the distribution of the Designated Shares, the
Company shall forthwith amend or supplement the Registration Statement or the
Prospectus, as the case may be, by preparing and filing with the Commission, and
furnishing to the Representative such number of copies as the Representative may
reasonably request of an amendment or amendments of, or a supplement or
supplements to, the Registration Statement or the Prospectus, as the case may be
(in form and substance satisfactory to the Representative and counsel for the
Underwriters). If any event shall occur as a result of which it is necessary to
amend or supplement the Prospectus to correct an untrue statement of material
fact or to include a material fact necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading, or if for
any reason it is necessary at any time to amend or supplement the Prospectus to
comply with the 1933 Act and the 1933 Act Regulations, the Company shall,
subject to the second sentence of this subsection (d), forthwith at its cost and
expense amend or supplement the Prospectus by preparing and filing with the
Commission, and furnishing to the Representative, such number of copies as the
Representative may reasonably request of an amendment or amendments of, or a
supplement or supplements to, the Prospectus (in form and substance satisfactory
to the Representative and counsel for the Underwriters) so that, as so amended
or supplemented, the Prospectus shall not contain an untrue statement of
material fact or omit to state a material fact necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading.
(e) The Company shall cooperate with the Representative and counsel for the
Underwriters in order to qualify the Designated Shares for offering and sale
under the securities or blue sky laws of such jurisdictions in the United States
as the Representative may reasonably request and shall continue such
qualifications in effect so long as may be advisable for distribution of the
Designated Shares; PROVIDED, HOWEVER, that the Company shall not be required to
qualify to do business as a foreign corporation or file a general consent to
service of process in any jurisdiction in connection with the foregoing. The
Company shall file such statements and reports as may be required by the laws of
each jurisdiction in which the Designated Shares have been qualified as above.
The Company will notify the
17
Representative immediately of, and confirm in writing, the suspension of
qualification of the Designated Shares or threat thereof in any jurisdiction.
(f) The Company will deliver against payment of the purchase price the
certificates for the Designated Shares and registered in such names and
denominations as the Representative shall have requested at least two full
business days prior to the Closing Date and, if applicable, the Option Closing
Date and shall be made available, at the request of the Representative, for
inspection at least 24 hours prior to such Closing Date and Option Closing Date.
(g) The Company shall make generally available to its security holders in
the manner contemplated by Rule 158 of the 1933 Act Regulations and furnish to
the Representative as soon as practicable, but in any event not later than 16
months after the Effective Date, a consolidated earnings statement of the
Company in reasonable detail, covering a period of at least 12 consecutive
months beginning after the effective date of the Registration Statement,
conforming with the requirements of Section 11(a) of the 1933 Act and Rule 158.
(h) The Company shall use the net proceeds from the sale of the Designated
Shares in the manner specified in the Prospectus under the caption "Use of
Proceeds."
(i) For five years from the Effective Date, the Company shall furnish to
the Representative copies of all reports and communications (financial or
otherwise) furnished by the Company to the holders of the Designated Shares as a
class, copies of all reports and financial statements filed with or furnished to
the Commission (other than portions for which confidential treatment has been
obtained from the Commission and other than reports and financial statements
available to the public through XXXXX) or with any national securities exchange
or the Nasdaq National Market or other self-regulatory organization and such
other documents, reports and information concerning the business and financial
conditions of the Company as the Representative may reasonably request, other
than such documents, reports and information for which the Company has the legal
obligation not to reveal to the Representative.
(j) For a period of 90 days from the Effective Date, the Company shall not,
without the Representative's prior written consent, directly or indirectly
offer, sell, contract to sell or otherwise dispose of any shares of the
Company's equity securities, any securities convertible or exchangeable for such
equity securities or any other rights to acquire such equity securities, other
than (A) Designated Shares issued and sold to the Underwriters pursuant to this
Agreement, (B) Common Stock issued upon exercises of employee stock options
outstanding on the date hereof, (C) grants of options or other rights to
purchase Common Stock and issuances of shares of Common Stock under employee
benefit plans and other compensatory programs in existence on the date hereof
and registrations thereof on Form S-8, and (D) Common Stock (or options under
employee benefit plans to purchase Common stock) issued as consideration in any
bona fide merger or other business combination transaction. The Company will use
its commercially reasonable efforts to cause its directors and Xxxxx X. Xxxxx,
Xx., Xxxxxx X. Xxxxxxxx, Xxxx X. Xxxxxx and Xxxxx X. Xxxxxxxx to deliver to the
Underwriters on or before the date of this Agreement, an agreement satisfactory
in form and substance to the Representative and counsel for the Underwriters
whereby each such person agrees, for a period of 90 days from the Effective
Date, not to, directly or indirectly, offer, sell, contract to sell or otherwise
dispose of any shares of the Company's equity securities or any other rights to
acquire such equity securities without the prior written consent of the
Representative, other than (W) sales of Common Stock issued upon exercise of
employee stock options outstanding on the date hereof in amounts sufficient to
pay the exercise price of exercised options, (X) transfers as a bona fide gift
or gifts, provided that prior to any such transfer the donee or donees thereof
agree in writing to be bound by the restrictions set forth in such agreement,
(Y) transfers to any trust for the direct or indirect benefit of such directors
or executive officers or the immediate family of
18
such directors or executive officers, provided that prior to any such transfer
the trustee of the trust agrees in writing to be bound by the restrictions set
forth in such agreement, and provided further that any such transfer shall not
involve a disposition for value, and (Z) transfers occurring by operation of
law, such as rules of descent and distribution, statutes governing the effects
of a merger or a qualified domestic order, provided that prior to any such
transfer the transferee executes an agreement stating that the transferee is
receiving and holding the Common Stock shares subject to the provisions of such
agreement.
(k) The Company shall use its commercially reasonable efforts to cause the
Designated Shares to become quoted on the Nasdaq National Market, or in lieu
thereof a national securities exchange, and to remain so quoted.
(l) Except as contemplated in the Prospectus, subsequent to the date of
this Agreement and through the date which is the later of (i) the day following
the date on which the Underwriters' option to purchase the Option Shares shall
expire or (ii) the day following the Option Closing Date with respect to any
Option Shares that the Underwriters shall elect to purchase, except as described
in or contemplated by the Prospectus, neither the Company nor any of the
Subsidiaries shall take any action (or refrain from taking any action) which
will result in the Company or the Subsidiaries incurring any material liability
or obligation, direct or contingent, or enter into any material transaction,
except in the ordinary course of business, or take or refrain from taking any
action which will cause or result in any material adverse change in the
financial position, capital stock, or any material increase in long-term debt,
obligations under capital leases or short-term borrowings of the Company and the
Subsidiaries on a consolidated basis.
(m) Except as described in the Prospectus, the Company shall not, for a
period of 180 days after the date hereof, without the prior written consent of
the Representative, purchase, the Company's Common Stock, except in compliance
with applicable law and except for any purchases of shares of Common Stock
pursuant to a publicly announced stock buy-back program.
(n) The Company shall not take, directly or indirectly, any action designed
to result in or which constitutes or which might reasonably be expected to cause
or result in stabilization or manipulation of the price of any security of the
Company in connection with the sale or resale of the Designated Shares in
violation of the Commission's rules and regulations, including, but not limited
to, Regulation M, and the Company is not aware of any such action taken or to be
taken by any affiliate of the Company.
(o) Prior to the Closing Date (and, if applicable, the Option Closing
Date), the Company will not issue any press release or other communication
directly or indirectly or hold any press conference with respect to the Company,
the Subsidiaries or the offering of the Designated Shares as to which the
Representative shall not previously have been advised in writing and provided a
copy a reasonable time prior to the proposed issuance or holding thereof and to
which the Representative or counsel for the Underwriters shall reasonably
object.
(p) The Company shall comply with all registration, filing and reporting
requirements of the 1934 Act and the 1934 Act Regulations for so long as the
Prospectus is required to be delivered.
5. PAYMENT OF EXPENSES.
Whether or not this Agreement is terminated or the sale of the Designated
Shares to the Underwriters is consummated, the Company covenants and agrees that
it will pay or cause to be paid
19
(directly or by reimbursement) all costs and expenses incident to the
performance of the obligations of the Company under this Agreement, including:
(a) the preparation, printing, filing, delivery and shipping of the initial
registration statement, each Preliminary Prospectus, the Registration Statement
and the Prospectus and any amendments or supplements thereto, and the printing,
delivery and shipping of this Agreement and any other underwriting documents
(including, without limitation, selected dealers agreements);
(b) all fees, expenses and disbursements of the Company's counsel and
accountants;
(c) all fees and expenses incurred in connection with the qualification (if
required) of the Designated Shares under the securities or blue sky laws of such
jurisdictions as the Representative may request, including all filing fees and
fees and disbursements of counsel for the Underwriters in connection therewith;
(d) all fees and expenses incurred in connection with filings made with the
NASD;
(e) any applicable fees and other expenses incurred in connection with the
quotation of the Designated Shares on the Nasdaq National Market;
(f) the cost of furnishing to the Representative copies of the initial
registration statements, any Preliminary Prospectus, the Registration Statement
and the Prospectus and all amendments or supplements thereto;
(g) the costs and charges of any transfer agent or registrar and the fees
and disbursements of counsel for any transfer agent or registrar;
(h) all costs and expenses (including stock transfer taxes) incurred in
connection with the printing, issuance and delivery of the Designated Shares to
the Underwriters; and
(i) all other costs and expenses incident to the performance of the
obligations of the Company hereunder that are not otherwise specifically
provided for in this Section 5.
If the sale of Designated Shares contemplated by this Agreement is not
completed because this Agreement is terminated by the Company or because this
Agreement is terminated by the Representatives pursuant to Sections 8(a), 8(b)
or 8(c), the Company will pay the Underwriters their accountable out-of-pocket
expenses in connection herewith or in contemplation of the performance of their
obligations hereunder, including without limitation travel expenses, fees,
expenses and disbursements of counsel or other out-of-pocket expenses incurred
by them in connection with any discussion of the offering of the Designated
Shares or the contents of the Registration Statement, any investigation of the
Company and the Subsidiaries, or any preparation for the marketing, purchase,
sale or delivery of the Designated Shares, in each case following presentation
of reasonably detailed invoices therefor.
If the sale of the Designated Shares contemplated by this Agreement is
completed or this Agreement is terminated by the Representatives for any reason
other than as set forth in the preceding paragraph, the Company shall not be
responsible for payment of fees or disbursements of counsel for the Underwriters
other than in accordance with paragraph (c) above, or for the reimbursement of
any expenses of the Underwriters.
20
6. CONDITIONS OF THE UNDERWRITERS' OBLIGATIONS.
The obligations of the Underwriters to purchase and pay for the Firm Shares
and, following exercise of the option granted by the Company in Section 1 of
this Agreement, the Option Shares, are subject, in the Representative's sole
discretion, to the accuracy of the representations and warranties and compliance
with the agreements of the Company herein as of the date hereof and as of the
Closing Date (or in the case of the Option Shares, if any, as of the Option
Closing Date), to the accuracy of the written statements of the Company made
pursuant to the provisions hereof, to the performance by the Company of its
covenants and obligations hereunder and to the following additional conditions:
(a) If the Registration Statement or any amendment thereto filed prior to
the Closing Date has not been declared effective prior to the time of execution
hereof, the Registration Statement shall become effective not later than 10:00
a.m., St. Louis time, on the first business day following the time of execution
of this Agreement, or at such later time and date as the Representative may
agree to in writing. If required, the Prospectus and any amendment or supplement
thereto shall have been timely filed in accordance with Rule 424(b) and Rule
430A under the 1933 Act and Section 4(a) hereof. No stop order suspending the
effectiveness of the Registration Statement or any amendment or supplement
thereto shall have been issued under the 1933 Act or any applicable state
securities laws and no proceedings for that purpose shall have been instituted
or shall be pending, or, to the knowledge of the Company or the Representative,
shall be contemplated by the Commission or any state authority. Any request on
the part of the Commission or any state authority for additional information (to
be included in the Registration Statement or Prospectus or otherwise) shall have
been disclosed to the Representative and complied with to the Representative's
satisfaction and to the satisfaction of counsel for the Underwriters.
(b) No Underwriter shall have advised the Company at or before the Closing
Date (and, if applicable, the Option Closing Date) that the Registration
Statement or any post-effective amendment thereto, or the Prospectus or any
amendment or supplement thereto, contains an untrue statement of a fact which,
in the Representative's opinion, is material or omits to state a fact which, in
the Representative's opinion, is material and is required to be stated therein
or is necessary to make statements therein (in the case of the Prospectus or any
amendment or supplement thereto, in light of the circumstances under which they
were made) not misleading.
(c) All corporate proceedings and other legal matters incident to the
authorization, form and validity of this Agreement and the Designated Shares,
and the authorization and form of the Registration Statement and the Prospectus,
other than financial statements and other financial data, and all other legal
matters relating to this Agreement and the transactions contemplated hereby
shall be satisfactory in all material respects to counsel for the Underwriters,
and the Company and the Subsidiaries shall have furnished to such counsel all
documents and information relating thereto that they may reasonably request to
enable them to pass upon such matters.
(d) Bose XxXxxxxx & Xxxxx LLP, counsel for the Company, shall have
furnished to the Representative their signed opinion, dated the Closing Date or
the Option Closing Date, as the case may be, in form and substance satisfactory
to counsel for the Underwriters, to the effect that:
(i) The Company has been duly incorporated and is validly existing and
in good standing under the laws of the State of Indiana, and is duly
registered as a bank holding company and financial holding company under
the BHC Act. The entities listed on Exhibit A are the only subsidiaries,
direct or indirect, of the Company. Each of the Subsidiaries is duly
incorporated or organized, validly existing and in good standing under the
laws of its jurisdiction of incorporation or organization, as the case may
be. Each of the Company and the Subsidiaries has full power (corporate or
otherwise) and authority to own or lease its properties and to conduct
21
its business as such business is described in the Prospectus and is
currently conducted in all material respects. Each of the Company and the
Subsidiaries is duly qualified as a foreign corporation to transact
business and is in good standing in each jurisdiction in which such
qualification is required, whether by reason of the ownership or leasing of
property or the conduct of business, except where the failure so to qualify
or to be in good standing has not and will not result, individually or in
the aggregate, in a material adverse effect on the condition (financial or
otherwise), business, prospects or results of operations of the Company and
the Subsidiaries on a consolidated basis. All outstanding shares of capital
stock or other equity interests of the Subsidiaries have been duly
authorized and validly issued, are fully paid and nonassessable, are owned,
directly or indirectly, by the Company free and clear of any security
interest, mortgage, pledge, lien, encumbrance, claim or equity (except for
(1) shares of preferred stock of MSB Realty, Inc. held by third parties and
(2) security interests granted by the Company in capital stock of the Banks
and other subsidiaries to secure borrowings by the Company from a
third-party lender, which security interests are described in the
Prospectus), and none of the outstanding shares of capital stock or other
equity interests of any Subsidiary was issued in violation of the
preemptive or similar rights of any securityholder of such Subsidiary, and,
to the best of such counsel's knowledge, except as disclosed in the
Prospectus, there are no outstanding rights, options or warrants to
purchase any such shares or securities convertible into or exchangeable for
any such shares. The deposit accounts of the Banks are insured by the FDIC
up to the maximum amount provided by law, and, to such counsel's knowledge,
no proceedings for the termination or revocation of any such insurance are
pending or threatened.
(ii) The capital stock of the Company conforms to the description
thereof contained in the Prospectus in all material respects. The
authorized, issued and outstanding capital stock of the Company as of March
31, 2005, is as set forth under the caption "Capitalization" in the
Prospectus. The capital stock of the Company has been duly authorized and
validly issued, and is fully paid and nonassessable and, to such counsel's
knowledge, is not in violation of or subject to any other rights to
subscribe for or purchase any securities. The form of certificates to
evidence the Common Stock has been approved by the Company's Board of
Directors and is in due and proper form and complies with all applicable
requirements. To such counsel's knowledge, there are no outstanding rights,
options or warrants to purchase, no other outstanding securities
convertible into or exchangeable for, and no commitments, plans or
arrangements to issue, any shares of capital stock of the Company, except
as described in the Prospectus and except for options granted during the
first quarter of 2005 under the Company's 2003 Stock Option Plan, and none
of the outstanding shares of capital stock of the Company was issued in
violation of the preemptive or other similar rights of any securityholder
of the Company.
(iii) The Company has all requisite corporate power and authority to
issue, sell and deliver the Designated Shares in accordance with and upon
the terms and conditions set forth in this Agreement and the Registration
Statement and the Prospectus. All corporate action required to be taken by
the Company for the authorization, issuance, sale and delivery of the
Designated Shares has been validly and sufficiently taken. All of the
Designated Shares have been duly and validly authorized and, when delivered
and paid for in accordance with this Agreement, will be duly and validly
issued, fully paid and nonassessable, and will conform to the description
thereof in the Registration Statement and the Prospectus. The Designated
Shares have been approved for quotation on the Nasdaq National Market
subject to official notice of issuance. There are no preemptive or other
rights to subscribe for or to purchase (other than employee stock options),
and other than as disclosed in the Prospectus, no restrictions upon the
voting or transfer of, any common equity securities of the Company or the
Subsidiaries pursuant to the corporate charter, by-laws or other governing
documents of the Company or the Subsidiaries, or, to such
23
counsel's knowledge, any agreement or other instrument to which the
Company or any of the Subsidiaries is a party or by which the Company or
any of the Subsidiaries may be bound.
(iv) The Company has all requisite corporate power to enter into and
perform its obligations under this Agreement, and this Agreement has been
duly and validly authorized, executed and delivered by the Company and
constitutes the legal, valid and binding obligation of the Company
enforceable in accordance with its terms, except as the enforcement hereof
may be limited by general principles of equity and by bankruptcy or other
laws relating to or affecting creditors' rights generally, and except as
the indemnification and contribution provisions hereof may be limited under
applicable laws and certain remedies may not be available in the case of a
non-material breach.
(v) The Merger Agreement has been duly authorized, executed and
delivered by the Company, and is a valid and legally binding obligation of
the Company enforceable against the Company in accordance with its terms,
subject to the effect of bankruptcy, insolvency, reorganization,
receivership, moratorium and other laws affecting the rights and remedies
of creditors generally and of general principles of equity and subject to
any regulatory approval requirements.
(vi) To such counsel's knowledge, neither the Company nor any of the
Subsidiaries is in breach or violation of, or default under, with or
without notice or lapse of time or both, its corporate charter, by-laws or
governing document. To such counsel's knowledge, no breach or default by
the Company or any Subsidiary exists (nor has any event occurred which with
notice, lapse of time, or both, would result in a breach of, or constitute
a default under) in the due performance or observance of any material
obligation, agreement, covenant or condition contained in any material
contract, indenture, mortgage, deed of trust, loan or credit agreement,
note, lease, franchise, license or any other agreement or instrument to
which either the Company or any Subsidiary is a party or by which any of
them or any of their respective properties may be bound. The execution,
delivery and performance of this Agreement and the consummation of the
transactions contemplated by this Agreement, the Merger Agreement or the
other agreements contemplated hereby or thereby do not and will not
conflict with, result in the creation or imposition of any material lien,
claim, charge, encumbrance or restriction upon any property or assets of
the Company or the Subsidiaries or the Designated Shares pursuant to, or
constitute a breach or violation of, or constitute a default under, with or
without notice or lapse of time or both, any of the terms, provisions or
conditions of the charter, by-laws or governing document of the Company or
the Subsidiaries, or any material contract, indenture, mortgage, deed of
trust, loan or credit agreement, note, lease, franchise, license or any
other agreement or instrument to which the Company or the Subsidiaries is a
party or by which any of them or any of their respective properties may be
bound or any order, decree, judgment, franchise, license, Permit, rule or
regulation of any court, arbitrator, government, or governmental agency or
instrumentality, domestic or foreign, known to such counsel having
jurisdiction over the Company or the Subsidiaries or any of their
respective properties which, in each case, is material to the Company and
the Subsidiaries on a consolidated basis.
(vii) To such counsel's knowledge, holders of securities of the
Company do not have any right that, if exercised, would require the Company
to cause such securities to be included in the Registration Statement or
have waived such right. To such counsel's knowledge, neither the Company
nor any of the Subsidiaries is a party to any agreement or other instrument
which grants rights for or relating to the registration of any securities
of the Company.
23
(viii) No action, suit or proceeding at law or in equity is pending
or, to such counsel's knowledge, threatened to which the Company or any
Subsidiary is or is threatened to be made a party, and no action, suit or
proceeding is pending or, to such counsel's knowledge, threatened against
or affecting the Company or any Subsidiary or any of their properties,
before or by any court or governmental official, commission, board or other
administrative agency, authority or body, or any arbitrator, wherein an
unfavorable decision, ruling or finding has or will have a material adverse
effect on the consummation of this Agreement or the issuance and sale of
the Designated Shares as contemplated herein, or the condition (financial
or otherwise), earnings, affairs, business, prospects or results of
operations of the Company and the Subsidiaries on a consolidated basis, or
which is required to be disclosed in the Registration Statement or the
Prospectus and is not so disclosed.
(ix) No authorization, approval, consent or order of or filing,
registration or qualification with, any person (including without
limitation, any court, governmental body or authority) is required in
connection with the transactions involving the issuance and sale of the
Designated Shares as contemplated by this Agreement, the Registration
Statement and the Prospectus, except such as have been obtained under the
1933 Act, except such as have been obtained or made under the rules of the
Nasdaq National Market and except such as may be required under state
securities laws or Interpretations or Rules of the NASD in connection with
the purchase and distribution of the Designated Shares by the Underwriters.
(x) Each of the Registration Statement and the Prospectus and any
amendments or supplements thereto (other than the exhibits, financial
statements or other financial data included therein or omitted therefrom
and Underwriters' Information, as to which such counsel need express no
opinion) comply as to form in all material respects with the requirements
of the 1933 Act, the 1933 Act Regulations, the 1934 Act and the 1934 Act
Regulations as of their respective dates of effectiveness or issuance.
(xi) To such counsel's knowledge, there are no contracts, agreements,
leases or other documents of a character required to be disclosed in the
Registration Statement or the Prospectus or to be filed as exhibits to the
Registration Statement or that are not so disclosed or filed.
(xii) The statements under the captions "Regulation and Supervision of
the Company", "Regulation and Supervision of the Subsidiary Banks",
"Capital Requirements", and "Legal Proceedings" in the Form 10-K, the
description of the Company's capital stock on Form 8-K dated May 19, 2005,
and the statements under the caption "Change in Control Severance
Agreements" in the Company's Proxy Statement dated April 29, 2005 insofar
as such statements constitute a description of legal or regulatory matters,
documents or instruments referred to therein, are accurate descriptions of
the matters purported to be summarized therein in all material respects and
fairly present the information called for with respect to such legal or
regulatory matters, documents and instruments.
(xiii) Such counsel has been advised by the staff of the Commission
that the Registration Statement has become effective under the 1933 Act;
any required filing of the Prospectus pursuant to Rule 424(b) has been made
within the time period required by Rule 424(b); to such counsel's
knowledge, no stop order suspending the effectiveness of the Registration
Statement has been issued and no proceedings for a stop order are pending
or threatened by the Commission.
24
(xiv) Except as disclosed in the Prospectus, there are no contractual
encumbrances or restrictions, or material legal restrictions required to be
disclosed on the ability of the Subsidiaries (A) to pay dividends or make
any other distributions on its capital stock or to pay indebtedness owed to
the Company, (B) to make any loans or advances to, or investments in, the
Company or (C) to transfer any of its property or assets to the Company.
(xv) To such counsel's knowledge, (A) the business and operations of
the Company and the Subsidiaries comply in all material respects with all
statutes, ordinances, laws, rules and regulations applicable thereto and
which are material to the Company and the Subsidiaries on a consolidated
basis, except in those instances where non-compliance would not,
individually or in the aggregate, materially impair the ability of the
Company and the Subsidiaries to conduct their business and, individually or
in the aggregate, has not had and will not have a material adverse effect
on the condition (financial or otherwise), earnings, affairs, business,
prospects or results of operations of the Company and the Subsidiaries on a
consolidated basis; and (B) the Company and the Subsidiaries possess and
are operating in all material respects in compliance with the terms,
provisions and conditions of all Permits, consents, licenses, franchises
and governmental and regulatory authorizations ("AUTHORIZATIONS") required
to conduct their business as described in the Prospectus and which are
material to the Company and the Subsidiaries on a consolidated basis,
except in those instances where the loss thereof or non-compliance
therewith has not had and will not have a material adverse effect on the
condition (financial or otherwise), earnings, affairs, business, prospects
or results of operations of the Company and the Subsidiaries on a
consolidated basis; to such counsel's knowledge, all such Authorizations
are valid and in full force and effect, and, to counsel's knowledge, no
action, suit or proceeding is pending or threatened which may lead to the
revocation, termination, suspension or non-renewal of any such
Authorization, except in those instances where the loss thereof or
non-compliance therewith has not and will not materially impair the ability
of the Company or the Subsidiaries to conduct their businesses and would
not have a material adverse effect on the condition (financial or
otherwise), earnings, affairs, business, prospects or results of operations
of the Company and the Subsidiaries on a consolidated basis.
(xvi) The Company is not and, after giving effect to the offering and
sale of the Designated Shares and the application of the proceeds thereof
as described in the Prospectus will not be, an "investment company," an
entity "controlled" by an "investment company" or an "investment adviser"
as defined in the Investment Company Act and the Investment Advisers Act.
In giving the above opinion, such counsel may state that, insofar as such
opinion involves factual matters, they have relied upon certificates of officers
of the Company including, without limitation, certificates as to the identity of
any and all material contracts, indentures, mortgages, deeds of trust, loans or
credit agreements, notes, leases, franchises, licenses or other agreements or
instruments, and all material permits, easements, consents, licenses, franchises
and government regulatory authorizations, for purposes of paragraphs (vi), (xi)
and (xv) hereof, and certificates of public officials.
Such counsel shall also confirm that, in connection with the preparation of
the Registration Statement and Prospectus, such counsel has participated in
conferences with officers and representatives of the Company and with their
independent public accountants and with the Representative and its counsel, at
which conferences such counsel made inquiries of such officers, representatives
and accountants and discussed in detail the contents of the Registration
Statement and the Prospectus and such counsel has no reason to believe (A) that
the Registration Statement or any amendment thereto (except for the financial
statements and related schedules included therein or omitted therefrom or
Underwriters' Information, as to which such counsel need express no opinion or
belief), at the time the Registration
25
Statement or any such amendment became effective, contained any untrue statement
of material fact or omitted to state any material fact required to be stated
therein or necessary to make the statements therein not misleading or (B) that
the Prospectus or any amendment or supplement thereto (except for the financial
statements and related schedules included therein or omitted therefrom or
Underwriters' Information, as to which such counsel need express no opinion or
belief), at the time the Registration Statement became effective (or, if the
term "Prospectus" refers to the prospectus first filed pursuant to Rule 424(b)
of the 1933 Act Regulations, at the time the Prospectus was issued), at the time
any such amended or supplemented Prospectus was issued, at the Closing Date and,
if applicable, the Option Closing Date, contained or contains any untrue
statement of material fact or omitted or omits to state any material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading, or (C)
that there is any amendment to the Registration Statement required to be filed
that has not already been filed.
(e) Xxxxx, Xxxx & Xxxxxxxx, X.X., counsel for the Underwriters, shall have
furnished the Representative their signed opinion, dated the Closing Date or the
Option Closing Date, as the case may be, with respect to the sufficiency of all
corporate procedures and other legal matters relating to this Agreement, the
validity of the Designated Shares, the Registration Statement, the Prospectus
and such other related matters as the Representative may reasonably request and
there shall have been furnished to such counsel such documents and other
information as they may reasonably request to enable them to pass on such
matters. In giving such opinion, Xxxxx, Rice & Xxxxxxxx, X.X. may rely as to
matters of fact upon statements and certifications of officers of the Company
and of other appropriate persons and may rely as to matters of law, other than
law of the United States and the State of Missouri, upon the opinions of Bose
XxXxxxxx & Xxxxx LLP described herein.
(f) On the date of this Agreement and on the Closing Date (and, if
applicable, any Option Closing Date), the Representative shall have received
from Xxxxx Xxxxxx and Company LLC letters, dated the date of this Agreement and
the Closing Date (and, if applicable, the Option Closing Date), respectively, in
form and substance satisfactory to the Representative, confirming that they are
independent public accountants with respect to the Company and the Subsidiaries,
within the meaning of the 1933 Act and the 1933 Act Regulations and stating in
effect that:
(i) In their opinion, the consolidated financial statements of the
Company, audited by them and incorporated by reference in the Registration
Statement comply as to form in all material respects with the applicable
accounting requirements of the 1933 Act, the 1934 Act, the 1933 Act
Regulations and the 1934 Act Regulations.
(ii) On the basis of the procedures specified by the American
Institute of Certified Public Accountants as described in SAS No. 100,
"Interim Financial Information Statements," inquiries of officials of the
Company responsible for financial and accounting matters, and such other
inquiries and procedures as may be specified in such letter, which
procedures do not constitute an audit in accordance with U.S. generally
accepted auditing standards of the Public Company Accounting Oversight
Board (United States), nothing came to their attention that caused them to
believe that, if applicable, the unaudited interim consolidated financial
statements of the Company included in the Registration Statement do not
comply as to form in all material respects with the applicable accounting
requirements of the 1933 Act, the 1934 Act, the 1933 Act Regulations and
the 1934 Act Regulations or are not in conformity with U.S. generally
accepted accounting principles applied on a basis substantially consistent,
except as noted in the Registration Statement, with the basis for the
audited consolidated financial statements of the Company included or
incorporated by reference in the Registration Statement.
26
(iii) They have audited management's assessment included in the Report on
Management's Assessment of Internal Control Over Financial Reporting
accompanying the Company's amendment to Form 10-K for the year ended 2004 and
incorporated in the Registration Statement that the Company maintained effective
internal controls over financial reporting as of December 31, 2004 based on the
criteria established in INTERNAL CONTROL - INTEGRATED FRAMEWORK ISSUED BY THE
COMMITTEE OF SPONSORING ORGANIZATIONS OF THE XXXXXXXX COMMISSION; their report
thereto is also incorporated by reference into the Registration Statement. They
have not audited the internal control over financial reporting of the Company as
of any date or for any period subsequent to December 31, 2004. Therefore, they
are unable to and do not express any opinion on internal control over financial
reporting as of any date or for any period subsequent to December 31, 2004.
(iv) On the basis of limited procedures, not constituting an audit in
accordance with U.S. generally accepted auditing standards of the Public
Accounting Oversight Board (United States), consisting of a reading of the
unaudited interim financial statements and other information referred to below,
a reading of the latest available unaudited condensed consolidated financial
statements of the Company, inspection of the minute books of the Company since
the date of the latest audited financial statements of the Company included in
the Registration Statement, inquiries of officials of the Company responsible
for financial and accounting matters and such other inquiries and procedures as
may be specified in such letter, nothing came to their attention that caused
them to believe that:
(A) as of a specified date not more than five days prior to the date
of such letter, there have been any changes in the capital stock, allowance
for loan losses, or net loans receivable of the Company, any increase in
the long-term debt, short-term borrowings or real estate owned of the
Company, or any decreases in consolidated total assets or consolidated
shareholders' equity of the Company, or any changes, decreases or increases
in other items specified by the Representative, in each case as compared
with amounts shown in the latest consolidated statement of financial
condition of the Company included or incorporated by reference in the
Registration Statement, except in each case for changes, increases or
decreases which the Registration Statement specifically discloses have
occurred or may occur or which are described in such letter;
(B) for the period from the date of the latest unaudited interim
consolidated financial statements of the Company included or incorporated
by reference in the Registration Statement to the specified date referred
to in clause (iv)(A), there were any decreases in the consolidated interest
income, net interest income, other income or net income of the Company or
in the per share amount of net income of the Company, or any changes,
decreases or increases in other items specified by the Representative as
compared with the comparable period of the preceding year and with any
other period of corresponding length specified by the Representative,
except in each case for increases or decreases which the Registration
Statement discloses have occurred or may occur, or which are described in
such letter; and
(C) for the period from the date of the latest financial statements
included or incorporated by reference in the Registration Statement to the
specified date referred to in clause (iv)(A), no material modifications
should be made to the disclosures about changes in internal control over
financial reporting in order for the Company's certifications that were
included in the Form 10-K to be accurate and to comply with the
requirements of rule 13a-14 of the 1934 Act.
27
(v) In addition to the audit referred to in their report incorporated
by reference in the Registration Statement and the limited procedures,
inspection of minute books, inquiries and other procedures referred to in
paragraphs (ii) and (iv) above, they have carried out certain specified
procedures, not constituting an audit in accordance with U.S. generally
accepted auditing standards, with respect to certain amounts, percentages
and financial information specified by the Representative which are derived
from the general accounting records and consolidated financial statements
of the Company which appear in the Registration Statement and the documents
incorporated by reference therein specified by the Representative, and have
compared such amounts, percentages and financial information with the
accounting records and the material derived from such records and
consolidated financial statements of the Company and have found them to be
in agreement.
In the event that the letters to be delivered on the date hereof, on the
Closing Date (and, if applicable, any Option Closing Date) referred to above set
forth any such changes, decreases or increases as specified in clauses (iv)(A)
or (iv)(B) above, or any exceptions from such agreement specified in clause (v)
above, it shall be a further condition to the obligations of the Underwriters
that the Representative shall have determined, after discussions with officers
of the Company responsible for financial and accounting matters, that such
changes, decreases, increases or exceptions as are set forth in such letters do
not (x) reflect a material adverse change in the items specified in clause
(iv)(A) above as compared with the amounts shown in the latest consolidated
statement of financial condition of the Company included or incorporated by
reference in the Registration Statement, (y) reflect a material adverse change
in the items specified in clause (iv)(B) above as compared with the
corresponding periods of the prior year or other period specified by the
Representative, or (z) reflect a material adverse change in items specified in
clause (v) above from the amounts shown in the Preliminary Prospectus
distributed by the Underwriters in connection with the offering contemplated
hereby or from the amounts shown in the Prospectus.
(g) At the Closing Date and, if applicable, the Option Closing Date, the
Representative shall have received certificates of the chief executive officer,
the chief financial officer and the chief accounting officer of the Company,
which certificates shall be deemed to be made on behalf of the Company, dated as
of the Closing Date and, if applicable, the Option Closing Date, evidencing
satisfaction of the conditions of Section 6(a) and stating that (i) the
representations and warranties of the Company set forth in Section 2 hereof are
accurate as of the Closing Date and, if applicable, the Option Closing Date, and
that the Company has complied with all agreements and satisfied all conditions
on its part to be performed or satisfied at or prior to such Closing Date and,
if applicable, the Option Closing Date; (ii) since the respective dates as of
which information is given in the Registration Statement and the Prospectus,
there has not been any material adverse change in the condition (financial or
otherwise), earnings, affairs, business, prospects or results of operations of
the Company and the Subsidiaries on a consolidated basis; (iii) since such dates
there has not been any material transaction entered into by the Company or the
Subsidiaries other than transactions in the ordinary course of business; and
(iv) they have carefully examined the Registration Statement and the Prospectus
as amended or supplemented and nothing has come to their attention that would
lead them to believe that either the Registration Statement or the Prospectus,
or any amendment or supplement thereto as of their respective effective or issue
dates, contained, and the Prospectus as amended or supplemented at such Closing
Date (and, if applicable, the Option Closing Date), contains any untrue
statement of material fact, or omits to state a material fact required to be
stated therein or necessary in order to make the statements therein (in the case
of the Prospectus, in the light of the circumstances under which they were made)
not misleading; and (v) covering such other matters as the Representative may
reasonably request. The officers' certificate of the Company shall further state
that no stop order affecting the Registration Statement is in effect or, to
their knowledge, threatened.
28
(h) The NASD, upon review of the terms of the public offering of the
Designated Shares, shall not have objected to the Underwriters' participation in
such offering.
(i) At the Closing Date, the Representative shall have received the
agreements described in Section 4(j), duly executed by the Company and its
directors and Xxxxx X. Xxxxx, Xx., Xxxxxx X. Xxxxxxxx, Xxxx X. Xxxxxx and Xxxxx
X. Xxxxxxxx.
(j) Prior to the Closing Date and, if applicable, the Option Closing Date,
the Company shall have furnished to the Representative and counsel for the
Underwriters all such other documents, certificates and opinions as it has
reasonably requested.
All opinions, certificates, letters and other documents shall be in
compliance with the provisions hereof only if they are reasonably satisfactory
in form and substance to the Representative. The Company shall furnish the
Representative with conformed copies of such opinions, certificates, letters and
other documents as the Representative shall reasonably request.
If any of the conditions referred to in this Section 6 shall not have been
fulfilled when and as required by this Agreement, this Agreement and all of the
Underwriters' obligations hereunder may be terminated by the Representative on
notice to the Company at, or at any time before, the Closing Date or the Option
Closing Date, as applicable. Any such termination shall be without liability of
the Underwriters to the Company.
7. INDEMNIFICATION AND CONTRIBUTION.
(a) The Company agrees to indemnify and hold harmless each Underwriter,
each of its directors, officers and agents, and each person, if any, who
controls any Underwriter within the meaning of the 1933 Act or the 1934 Act,
against any and all losses, claims, damages, liabilities and expenses (including
reasonable costs of investigation and attorneys fees and expenses), joint or
several, arising out of or based upon (i) any untrue statement or alleged untrue
statement of fact made by or on behalf of the Company contained in Section 2 of
this Agreement (or any certificate delivered by or on behalf of the Company
pursuant hereto) or in the registration statement as originally filed or the
Registration Statement or in any amendment or supplement thereto, (ii) any blue
sky application or other document executed by the Company specifically for that
purpose or based upon written information furnished by the Company filed in any
state or other jurisdiction in order to qualify any of the Designated Shares
under the securities laws thereof (any such application, document or information
being hereinafter referred to as a "Blue Sky Application"), (iii) any omission
or alleged omission to state a material fact in the registration statement as
originally filed or the Registration Statement or in any amendment or supplement
thereto, or in any Blue Sky Application required to be stated therein or
necessary to make the statements therein not misleading, (iv) any untrue
statement or alleged untrue statement of material fact contained in any
Preliminary Prospectus or the Prospectus, or in any amendment or supplement
thereto, or arising out of or based upon any 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, (v) any breach or inaccuracy of the representations or
warranties of the Company contained in Section 2 (or in any certificate
delivered by or on behalf of the Company pursuant hereto), (vi) any
communications sent to Company shareholders by the Company in connection with or
related to the stock offering contemplated by the Prospectus, and (vii) the
enforcement of this indemnification provision or the contribution provisions of
Section 7(d); and shall reimburse each such indemnified party for any reasonable
legal or other expenses as incurred, but in no event less frequently than 30
days after each invoice is submitted, incurred by them in connection with
investigating or defending against or appearing as a third-party witness in
connection with any such loss, claim, damage, liability or action,
notwithstanding the possibility that payments for such expenses might later be
held to
29
be improper, in which case such payments shall be promptly refunded; PROVIDED,
HOWEVER, that the Company shall not be liable in any such case to the extent,
but only to the extent, that any such losses, claims, damages, liabilities and
expenses arise out of or are based upon any untrue statement or omission or
allegation thereof that has been made therein or omitted therefrom in reliance
upon and in conformity with the Underwriters' Information. The foregoing
indemnity agreement is in addition to any liability the Company may otherwise
have to any such indemnified party. The foregoing indemnity contained in this
subsection (a) with respect to any Preliminary Prospectus or the Prospectus
shall not inure to the benefit of any Underwriter (or any person controlling
such Underwriter) with respect to any person asserting any loss, claim, damage,
liability or expense which is the subject thereof if any Preliminary Prospectus
or the Prospectus or any amendment or supplement thereto prepared with the
consent of the Representatives and furnished to the Underwriters prior to the
Closing Date corrected any such untrue statement or alleged untrue statement or
omission or alleged omission of a material fact, and if such Underwriter failed
to send or give a copy of such Preliminary Prospectus, Prospectus or any
amendment or supplement thereto to such person at or prior to the time written
confirmation of the sale of Firm Shares was given to such person.
(b) Each Underwriter, severally and not jointly, agrees to indemnify and
hold harmless the Company, each of the Company's directors, each of the
Company's officers who signed the Registration Statement and each person, if
any, who controls the Company within the meaning of the 1933 Act, to the same
extent as required by the foregoing indemnity from the Company to each
Underwriter, but only with respect to any untrue statement or alleged untrue
statement of material fact or any omission or alleged omission to state a
material fact in the registration statement as originally filed or the
Registration Statement, any Preliminary Prospectus or the Prospectus, or in any
amendment or supplement thereto related to the Underwriters' Information (in the
case of the Preliminary Prospectus or the Prospectus, in light of the
circumstances under which they were made).
(c) If any action or claim shall be brought or asserted against any
indemnified party or any person controlling an indemnified party in respect of
which indemnity may be sought from the indemnifying party, such indemnified
party or controlling person shall promptly notify the indemnifying party in
writing, and the indemnifying party shall assume the defense thereof, including
the employment of counsel reasonably satisfactory to the indemnified party and
the payment of all expenses; PROVIDED, HOWEVER, that the failure so to notify
the indemnifying party shall not relieve it from any liability which it may have
to an indemnified party otherwise than under such paragraph, and further, shall
only relieve it from liability under such paragraph to the extent prejudiced
thereby. Any indemnified party or any such controlling person shall have the
right to employ separate counsel in any such action and to participate in the
defense thereof, but the fees and expenses of such counsel shall be at the
expense of such indemnified party or such controlling person unless (i) the
employment thereof has been specifically authorized by the indemnifying party in
writing, (ii) the indemnifying party has failed to assume the defense or to
employ counsel reasonably satisfactory to the indemnified party or (iii) the
named parties to any such action (including any impleaded parties) include both
such indemnified party or such controlling person and the indemnifying party and
such indemnified party or such controlling person shall have been advised by
such counsel that there may be one or more legal defenses available to it that
are different from or in addition to those available to the indemnifying party
(in which case, if such indemnified party or controlling person notifies the
indemnifying party in writing that it elects to employ separate counsel at the
expense of the indemnifying party, the indemnifying party shall not have the
right to assume the defense of such action on behalf of such indemnified party
or such controlling person) it being understood, however, that the indemnifying
party shall not, in connection with any one such action or separate but
substantially similar or related actions in the same jurisdiction arising out of
the same general allegations or circumstances, be liable for the reasonable fees
and expenses of more than one separate firm of attorneys at any time and for all
such indemnified party and controlling persons, which firm shall be designated
in writing by the indemnified party (and, if such indemnified parties are
Underwriters, by
30
the Representative). Each indemnified party and each controlling person, as a
condition of such indemnity, shall use reasonable efforts to cooperate with the
indemnifying party in the defense of any such action or claim. The indemnifying
party shall not be liable for any settlement of any such action effected without
its written consent, but if there shall be a final judgment for the plaintiff in
any such action (other than an agreed judgment based on a settlement between the
plaintiff and the indemnified party effected without the indemnifying party's
consent), the indemnifying party agrees to indemnify and hold harmless any
indemnified party and any such controlling person from and against any loss,
claim, damage, liability or expense by reason of such settlement or judgment.
An indemnifying party shall not, without the prior written consent of each
indemnified party, settle, compromise or consent to the entry of any judgment in
any pending or threatened claim, action, suit or proceeding in respect of which
indemnity may be sought hereunder (whether or not such indemnified party or any
person who controls such indemnified party within the meaning of the 1933 Act is
a party to such claim, action, suit or proceeding), unless such settlement,
compromise or consent includes a release of each such indemnified party
reasonably satisfactory to each such indemnified party and each such controlling
person from all liability arising out of such claim, action, suit or proceeding.
(d) If the indemnification provided for in this Section 7 is unavailable or
insufficient to hold harmless an indemnified party under paragraphs (a), (b) or
(c) hereof in respect of any losses, claims, damages, liabilities or expenses
referred to therein, then each indemnifying party, in lieu of indemnifying such
indemnified party, shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages, liabilities or
expenses (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company on the one hand and the Underwriters on the
other from the offering of the Designated Shares, or (ii) if the allocation
provided by clause (i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred
to in clause (i) above but also the relative fault of the Company on the one
hand and the Underwriters on the other hand in connection with the statements or
omissions that resulted in such losses, claims, damages, liabilities or
expenses, as well as any other relevant equitable considerations. The relative
benefits received by the Company on the one hand and the Underwriters on the
other hand shall be deemed to be allocated pro rata on the basis of the total
underwriting discounts, commissions and compensation received by the
Underwriters relative to the total net proceeds from the offering of the
Designated Shares (before deducting expenses) received by the Company, in each
case as set forth in the table on the cover page of the Prospectus. 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 the untrue or
alleged untrue statement of material fact or the omission or alleged omission to
state any material fact 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 paragraph (d) were determined by pro rata
allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation that does not take into account
the equitable considerations referred to herein. The amount paid or payable by
an indemnified party as a result of the losses, claims, damages, liabilities and
expenses referred to in the first sentence of this paragraph (d) shall be deemed
to include, subject to the limitations set forth above, any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this paragraph (d), no Underwriter shall be required to contribute
any amount in excess of the amount by which the total price at which the
Designated Shares underwritten by such Underwriter and distributed to the public
were offered to the public exceeds the amount of any damages that such
Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the 0000
Xxx) shall be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation.
31
For purposes of this paragraph (d), each person who controls an Underwriter
within the meaning of the 1933 Act shall have the same rights to contribution as
such Underwriter, and each person who controls the Company within the meaning of
the 1933 Act, each officer of the Company who shall have signed the Registration
Statement and each director of the Company shall have the same rights to
contribution as the Company subject in each case to the preceding sentence. The
Underwriters' obligations in this paragraph (d) to contribute are several in
proportion to their respective underwriting obligations and not joint. The
obligations of the Company under this paragraph (d) shall be in addition to any
liability which the Company may otherwise have.
(e) The indemnity and contribution agreements contained in this Section 7
and the representations and warranties of the Company set forth in this
Agreement shall remain operative and in full force and effect, regardless of (i)
any investigation made by or on behalf of any Underwriter or any person
controlling an Underwriter or by or on behalf of the Company, or such directors,
trustees or officers (or any person controlling the Company), (ii) acceptance of
any Designated Shares and payment therefor hereunder, and (iii) any termination
of this Agreement. A successor of any Underwriter or of the Company, such
directors, trustees or officers (or of any person controlling an Underwriter or
the Company) shall be entitled to the benefits of the indemnity, contribution
and reimbursement agreements contained in this Section 7.
8. TERMINATION.
The Representative shall have the right to terminate this Agreement on
behalf of the Underwriters at any time at or prior to the Closing Date or, with
respect to the Underwriters' obligation to purchase the Option Shares, at any
time at or prior to the Option Closing Date, without liability on the part of
the Underwriters to the Company, if:
(a) The Company shall have failed, refused, or been unable to perform any
agreement on its part to be performed under this Agreement, or any of the
conditions referred to in Section 6 shall not have been fulfilled, when and as
required by this Agreement;
(b) The Company or any of the Subsidiaries shall have sustained any
material loss or interference with its business from fire, explosion, flood or
other calamity, whether or not covered by insurance, or from any labor dispute
or court or governmental action, order or decree which in the judgment of the
Representative materially impairs the investment quality of the Designated
Shares;
(c) There has been since the respective dates as of which information is
given in the Registration Statement or the Prospectus, any materially adverse
change in, or any development which in the Representative's reasonable judgment
is reasonably likely to have a material adverse effect on, the condition
(financial or otherwise), earnings, affairs, business, prospects or results of
operations of the Company and the Subsidiaries on a consolidated basis, whether
or not arising in the ordinary course of business;
(d) There has occurred any outbreak or escalation of hostilities or other
calamity or crisis (including, without limitation, an act of terrorism) or
material adverse change in general economic, political or financial conditions,
or internal conditions, the effect of which on the financial markets of the
United States is such as to make it, in the Representative's reasonable
judgment, impracticable to market the Designated Shares or enforce contracts for
the sale of the Designated Shares;
(e) Trading generally on the New York Stock Exchange, the American Stock
Exchange or the Nasdaq National Market shall have been suspended, or minimum or
maximum prices for
32
trading shall have been fixed, or maximum ranges for prices for securities shall
have been required, by any of said exchanges or market system or by the
Commission or any other governmental authority; or
(f) A banking moratorium shall have been declared by federal, New York,
Indiana or Illinois authorities; or
(g) Any action shall have been taken by any government in respect of its
monetary affairs which, in the Representative's reasonable judgment, has a
material adverse effect on the United States securities markets so as to make
it, in the Representative's reasonable judgment, impracticable to market the
Designated Shares or to enforce contracts for the sale of the Designated Shares.
If this Agreement shall be terminated pursuant to this Section 8, the
Company shall not then be under any liability to the Underwriters except as
provided in Sections 5 and 7 hereof.
9. DEFAULT OF UNDERWRITERS.
If any Underwriter or Underwriters shall default in its or their
obligations to purchase Designated Shares hereunder, the other Underwriters
shall be obligated severally, in proportion to their respective commitments
hereunder, to purchase the Designated Shares which such defaulting Underwriter
or Underwriters agreed but failed to purchase; PROVIDED, HOWEVER, that the
non-defaulting Underwriters shall be under no obligation to purchase such
Designated Shares if the aggregate number of Designated Shares to be purchased
by such non-defaulting Underwriters shall exceed 110% of the aggregate
underwriting commitments set forth in Schedule I hereto, and PROVIDED FURTHER,
that no non-defaulting Underwriter shall be obligated to purchase Designated
Shares to the extent that the number of such Designated Shares is more than 110%
of such Underwriter's underwriting commitment set forth in Schedule I hereto.
In the event that the non-defaulting Underwriters are not obligated under
the above paragraph to purchase the Designated Shares which the defaulting
Underwriter or Underwriters agreed but failed to purchase, the Representative
may in its discretion arrange for one or more of the Underwriters or for another
party or parties to purchase such Designated Shares on the terms contained
herein. If within one business day after such default the Representative does
not arrange for the purchase of such Designated Shares, then the Company shall
be entitled to a further period of one business day within which to procure
another party or parties satisfactory to the Representative to purchase such
Designated Shares on such terms.
In the event that the Representative or the Company do not arrange for the
purchase of any Designated Shares to which a default relates as provided above,
this Agreement shall be terminated.
If the remaining Underwriters or substituted underwriters are required
hereby or agree to take up all or a part of the Designated Shares of a
defaulting Underwriter or Underwriters as provided in this Section 9, (i) the
Representative shall have the right to postpone the Closing Date for a period of
not more than five full business days, in order to effect any changes that, in
the opinion of counsel for the Underwriters or the Company, may thereby be made
necessary in the Registration Statement or the Prospectus, or in any other
documents or agreements, and the Company agrees promptly to file any amendments
to the Registration Statement or supplements to the Prospectus which, in its
opinion, may thereby be made necessary, and (ii) the respective numbers of
Designated Shares to be purchased by the remaining Underwriters or substituted
underwriters shall be taken as the basis of their underwriting obligation for
all purposes of this Agreement. Nothing herein contained shall relieve any
defaulting Underwriter of any liability it may have for damages occasioned by
its default hereunder. Any termination of this Agreement pursuant to this
Section 9 shall be without liability on the part of any non-
33
defaulting Underwriter or the Company, except for expenses to be paid or
reimbursed pursuant to Section 5 and except for the provisions of Section 7.
10. EFFECTIVE DATE OF AGREEMENT.
If the Registration Statement is not effective at the time of execution of
this Agreement, this Agreement shall become effective on the Effective Date at
the time the Commission declares the Registration Statement effective. The
Company shall immediately notify the Underwriters when the Registration
Statement becomes effective.
If the Registration Statement is effective at the time of execution of this
Agreement, this Agreement shall become effective at the earlier of 11:00 a.m.
St. Louis time, on the first full business day following the day on which this
Agreement is executed, or at such earlier time as the Representative shall
release the Designated Shares for public offering. The Representative shall
notify the Company immediately after it has taken any action which causes this
Agreement to become effective.
Until such time as this Agreement shall have become effective, it may be
terminated by the Company, by notifying the Representative, or by the
Representative of the several Underwriters, by notifying the Company, except
that the provisions of Sections 5 and 7 shall at all times be effective.
11. REPRESENTATIONS, WARRANTIES AND AGREEMENTS TO SURVIVE DELIVERY.
The representations, warranties, indemnities, agreements and other
statements of the Company and its officers set forth in or made pursuant to this
Agreement and the agreements of the Underwriters contained in Section 7 hereof
shall remain operative and in full force and effect regardless of any
investigation made by or on behalf of the Company or controlling persons of the
Company, or by or on behalf of the Underwriters or controlling persons of the
Underwriters or any termination or cancellation of this Agreement and shall
survive delivery of and payment for the Designated Shares.
12. NOTICES.
Except as otherwise provided in this Agreement, all notices and other
communications hereunder shall be in writing and shall be deemed to have been
duly given if delivered by hand, mailed by registered or certified mail, return
receipt requested, or transmitted by any standard form of telecommunication or
electronic mail and confirmed. Notices to the Company shall be sent to 000 Xxxxx
Xxxxxxxx, Xxxxxxxxxx, Xxxxxxx 00000 Attention: Xxxxx X. Xxxxx, Xx., fax no.
000-000-0000, e-mail xxxxxx@xxxxxxxxxxxxxxxxxxx.xxx (with a copy to Bose
XxXxxxxx & Xxxxx LLP, 000 Xxxxx Xxxxxxxxxxxx Xxxxxx, Xxxxx 0000, Xxxxxxxxxxxx,
Xxxxxxx 00000 Attention: Xxxx X. Xxxxxx, Esq., fax no. 000-000-0000, e-mail
xxxxxxx@xxxxxxx.xxx) and notices to the Underwriters shall be sent to Xxxxxx,
Xxxxxxxx & Company, Incorporated, 000 Xxxxx Xxxxxxxx, 0xx Xxxxx, Xx. Xxxxx,
Xxxxxxxx 00000, Attention: Xxxx X. Xxxxxx, fax no. 000-000-0000, email
xxxxxxx@xxxxxx.xxx (with a copy to Xxxxx, Xxxx & Xxxxxxxx, X.X., 000 Xxxxx
Xxxxxxxx, Xxxxx 0000, Xx. Xxxxx, Xxxxxxxx 00000, Attention: Xxx X. Xxxx, Esq.,
fax no. 000-000-0000, email xxxxx@xxxxxxxxx.xxx).
13. PARTIES.
The Agreement herein set forth is made solely for the benefit of the
Underwriters and the Company and, to the extent expressed, directors and
officers of the Company, any person controlling the Company or the Underwriters,
and their respective successors and assigns. No other person shall acquire or
have any right under or by virtue of this Agreement. The term "successors and
assigns" shall not include any purchaser, in his status as such purchaser, from
the Underwriters of the Designated Shares.
34
14. GOVERNING LAW.
This Agreement shall be governed by the laws of the State of Missouri,
without giving effect to the choice of law or conflicts of law principles
thereof.
15. AUTHORITY.
Any certificate signed by an authorized officer of the Company and
delivered to the Representative or to counsel for the Underwriters pursuant to
this Agreement shall be deemed a representation and warranty by the Company to
the Underwriters as to the matters covered thereby.
16. COUNTERPARTS.
This Agreement may be executed by facsimile and in one or more
counterparts, and when a counterpart has been executed by each party hereto all
such counterparts taken together shall constitute one and the same Agreement.
SIGNATURES APPEAR ON THE NEXT PAGE
35
If the foregoing is in accordance with the Representative's understanding
of our agreement, please sign and return to us a counterpart hereof, whereupon
this shall become a binding agreement between the Company and the Underwriters
in accordance with its terms.
Very truly yours,
MAINSOURCE FINANCIAL GROUP, INC.
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
CONFIRMED AND ACCEPTED,
as of _______, 2005
XXXXXX, XXXXXXXX & COMPANY, INCORPORATED
By:
-------------------------------------------------
Name:
-----------------------------------------------
Title:
----------------------------------------------
For itself and as Representative of the several
Underwriters named in Schedule I hereto.
36
SCHEDULE I
UNDERWRITER NUMBER OF SECURITIES
Xxxxxx, Xxxxxxxx & Company, Incorporated.......................................
Xxxxxxxx Xxxxxxxx Xxxxxx.......................................................
FTN Midwest Securities Corp....................................................
Xxxx Xxxxxx Investments, Inc...................................................
Xxxx Xxxx & Co.................................................................
Total..........................................................................
EXHIBIT A
LIST OF COMPANY SUBSIDIARIES
MainSource Bank
MainSource Bank of Illinois
Peoples Trust Company
IUB Illinois Holdings, Inc.
IUB Reinsurance Co., Ltd.
MainSource Insurance, LLC
MSB Realty, Inc.
MSB Investments of Nevada, Inc.
MSB Holdings of Nevada, Inc.
MSB of Nevada, LLC
MainSource Title, LLC
MainSource Mortgage, LLC
First Community Real Estate Management, Inc.
MainSource Statutory Trust I
MainSource Statutory Trust II
MainSource Statutory Trust III
