EXECUTION VERSION
FIRST SECURITY GROUP, INC.
(A TENNESSEE CORPORATION)
4,500,000 SHARES OF COMMON STOCK
(PAR VALUE $0.01 PER SHARE)
PURCHASE AGREEMENT
------------------
August 9, 2005
XXXXX, XXXXXXXX & XXXXX, INC.
as Representative of the several Underwriters
000 Xxxxxxx Xxxxxx
0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
First Security Group, Inc., a Tennessee corporation (the "Company")
-------
confirms its agreement with Xxxxx, Xxxxxxxx & Xxxxx, Inc. ("Xxxxx Xxxxxxxx") and
--------------
each of the other Underwriters named in Schedule A hereto (collectively, the
"Underwriters," which term shall also include any underwriter substituted as
-------------
hereinafter provided in Section 10 hereof), for whom Xxxxx Xxxxxxxx is acting as
representative (in such capacity, the "Representative"), with respect to (i) the
--------------
sale by the Company and the purchase by the Underwriters of the respective
numbers of shares of Common Stock, $0.01 par value per share, of the Company
("Common Stock") set forth in Schedules A and B hereto and (ii) the grant by the
------------
Company to the Underwriters, acting severally and not jointly, of the option
described in Section 2(b) hereof to purchase all or any part of 675,000
additional shares of Common Stock to cover over-allotments, if any. The
aforesaid 4,500,000 shares of Common Stock (the "Initial Securities") to be
------------------
purchased by the Underwriters and all or any part of the 675,000 shares of
Common Stock subject to the option described in Section 2(b) hereof (the "Option
------
Securities") are hereinafter called, collectively, the "Securities."
---------- ----------
The Company understands that the Underwriters propose to make a public
offering of the Securities as soon as the Representative deems advisable after
this Agreement has been executed and delivered.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-1 (No. 333-125722) covering the
----------
registration of the Securities under the Securities Act of 1933, as amended
(together with the rules and regulations promulgated thereunder, the "1933
----
Act"), including the related preliminary prospectus or prospectuses. Promptly
---
after execution and delivery of this Agreement, the Company will prepare and
file a prospectus in accordance with the provisions of Rule 430A
("Rule 430A") under the 1933 Act and paragraph (b) of Rule 424 ("Rule 424(b)")
----------- -----------
under the 1933 Act. The information included in such prospectus that was
omitted from such registration statement at the time it became effective but
that is deemed to be part of such registration statement at the time it became
effective pursuant to paragraph (b) of Rule 430A is referred to as "Rule 430A
---------
Information." Each prospectus used before such registration statement became
-----------
effective, and any prospectus that omitted the Rule 430A Information that was
used after such effectiveness and prior to the execution and delivery of this
Agreement, is herein called a "preliminary prospectus." Such registration
-----------------------
statement, including the exhibits thereto and, schedules thereto, if any, at the
time it became effective and including the Rule 430A Information, is herein
called the "Registration Statement." Any registration statement filed pursuant
----------------------
to Rule 462(b) under the 1933 Act is herein referred to as the "Rule 462(b)
-----------
Registration Statement," and after such filing the term "Registration Statement"
---------------------- ----------------------
shall include the Rule 462(b) Registration Statement. The final prospectus in
the form contained in the Registration Statement when declared effective (or
deemed by Rule 430A to be part thereof) is herein called the "Prospectus." For
----------
purposes of this Agreement, all references to the Registration Statement, any
preliminary prospectus, the Prospectus or any amendment or supplement to any of
the foregoing shall be deemed to include the copy filed with the Commission
pursuant to its Electronic Data Gathering, Analysis and Retrieval system
("XXXXX").
-----
All references in this Agreement to financial statements, schedules,
exhibits and other information which is "contained," "included," "described,"
"referred to" or "stated" in the Registration Statement, any preliminary
prospectus or the Prospectus (or other references of like import) shall be
deemed to mean and include the financial statements, schedules, exhibits or
other information incorporated by reference (as they may be amended or modified
by other information included or incorporated by reference) in the Registration
Statement, any preliminary prospectus or the Prospectus, as the case may be.
SECTION 1. Representations and Warranties.
--------------------------------
(a) Representations and Warranties by the Company. The Company
represents and warrants to each Underwriter as of the date hereof, as of the
Closing Time referred to in Section 2(c) hereof, and as of each Date of Delivery
(if any) referred to in Section 2(b) hereof, and agrees with each Underwriter,
as follows:
(i) Compliance with Registration Requirements. The Company meets the
------------------------------------------
requirements for use of Form S-1 under the 1933 Act, as set forth in the
general instructions thereto, with respect to the Registration Statement
and any Rule 462(b) Registration Statement. The Registration Statement and
any Rule 462(b) Registration Statement filed as of the date hereof has
become effective under the 1933 Act and no stop order suspending the
effectiveness of the Registration Statement or any Rule 462(b) Registration
Statement has been issued under the 1933 Act and no proceedings for that
purpose have been instituted or are, to the knowledge of the Company,
pending or contemplated by the Commission, and any request on the part of
the Commission for additional information has been complied with.
At the respective times the Registration Statement, any Rule 462(b)
Registration Statement and any post-effective amendments thereto became
effective (or becomes effective if not yet effective) and at the Closing
Time (and, if any Option Securities are purchased, at the Date of
Delivery), the Registration Statement, the Rule 462(b) Registration
Statement and any amendments and supplements thereto complied and will
comply in all material respects with the requirements of the 1933 Act and
did not and will not contain an untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to make
the statements therein not misleading. Neither the Prospectus, any
preliminary prospectus, nor any amendments or supplements thereto, at the
time such preliminary prospectus, Prospectus or any such amendment or
supplement was issued and at the Closing Time (and, if any Option
Securities are purchased, at the Date of Delivery), included or will
include an untrue statement of a material fact or omitted or will omit to
state a material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading.
The representations and warranties in this subsection shall not apply to
statements in or omissions from the Registration Statement, any
post-effective amendment thereto, any preliminary prospectus, the
Prospectus, or any amendments or supplements thereto made in reliance upon
and in conformity with information furnished to the Company in writing by
any Underwriter through Xxxxx Xxxxxxxx expressly for use in the
Registration Statement, preliminary prospectus, or Prospectus.
Each preliminary prospectus and the prospectus filed as part of the
Registration Statement as originally filed or as part of any amendment
thereto, or filed pursuant to Rule 424 under the 1933 Act, complied when so
filed in all material respects with the 1933 Act and each preliminary
prospectus and the Prospectus delivered to the Underwriters for use in
connection with this offering was identical to the electronically
transmitted copies thereof filed with the Commission pursuant to XXXXX,
except to the extent permitted by Regulation S-T under the 1933 Act.
(ii) Independent Registered Public Accounting Firm. Xxxxxx Xxxxxxxx
-----------------------------------------------
and Company, PLLC ("Decosimo"), the accounting firm that certified the
--------
financial statements and supporting schedules of the Company included in
the Registration Statement, any preliminary prospectus, and the Prospectus
is an independent registered public accounting firm as required by the 1933
Act. With respect to the Company, Decosimo is not in violation of the
auditor independence requirements of the Xxxxxxxx-Xxxxx Act of 2002
("Xxxxxxxx-Xxxxx Act") and the related rules and regulations of the
-------------------
Commission.
(iii) Financial Statements. The financial statements included in the
---------------------
Registration Statement, any preliminary prospectus, and the Prospectus,
together with the related schedules and notes, present fairly the financial
position of the Company and the Subsidiaries (as defined below) at the
dates indicated and the statement of operations, stockholders' equity and
cash flows of the Company and the Subsidiaries for the periods specified.
Such financial statements and any supporting schedules have been prepared
in conformity with generally accepted accounting principles ("GAAP")
----
applied on a consistent basis throughout the periods involved, except as
may be expressly stated in the related notes thereto, and except, in the
case of the interim unaudited financial statements, for normal year-end
adjustments and for the absence of footnotes disclosure. The
selected financial data and the summary financial information included in
any preliminary prospectus and/or the Prospectus present fairly the
information shown therein and have been compiled on a basis consistent with
that of the audited financial statements included in the Registration
Statement (with respect to the audited periods) and on a basis consistent
with that of the most recent interim financial statements filed with the
Commission (with respect to unaudited periods). The pro forma financial
statements and the related notes thereto included in the Registration
Statement, any preliminary prospectus, and/or the Prospectus present fairly
the information shown therein, have been prepared in accordance with the
Commission's rules and guidelines with respect to pro forma financial
statements and have been properly compiled on the basis described therein,
and the assumptions used in the preparation thereof are reasonable and the
adjustments used therein are appropriate to give effect to the transactions
and circumstances referred to therein. All disclosures contained in the
Registration Statement, any preliminary prospectus, or the Prospectus
regarding "non-GAAP financial measures" (as such term is defined by the
rules and regulations of the Commission) comply with Regulation G of the
Securities Exchange Act of 1934, as amended (together with the rules and
regulations promulgated thereunder, the "1934 Act") and Item 10 of
---------
Regulation S-K under the 1933 Act, to the extent applicable.
(iv) No Material Adverse Change in Business. Since the respective
------------------------------------------
dates as of which information is given in the Registration Statement and
the Prospectus, except as otherwise stated therein or contemplated thereby,
(A) there has been no material adverse change in the condition, financial
or otherwise, or in the earnings, business affairs or business prospects of
the Company and the Subsidiaries considered as one enterprise, whether or
not arising in the ordinary course of business (a "Material Adverse
----------------
Effect"), (B) there have been no transactions entered into by the Company
------
or the Subsidiaries, other than those in the ordinary course of business,
which are material with respect to the Company and the Subsidiaries
considered as one enterprise, and (C) there has been no dividend or
distribution of any kind declared, paid or made by the Company on any class
of its capital stock.
(v) Good Standing of the Company. The Company is a registered bank
-------------------------------
holding company under the Bank Holding Company Act of 1956, as amended
("BHCA"), has been duly organized and is validly existing as a corporation
----
in good standing under the laws of the State of Tennessee and has the
corporate power and authority to own, lease and operate its properties and
to conduct its business as described in each preliminary prospectus and the
Prospectus and to enter into and perform its obligations under this
Agreement; and the Company is duly qualified as a foreign corporation to
transact business and is in good standing in each other 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 would not result in a Material Adverse
Effect.
(vi) Good Standing of Subsidiaries. FSGBank, National Association
--------------------------------
("FSGBank") has been duly organized and is validly existing as a bank
-------
national association and each other direct or indirect subsidiary of the
Company (together with FSGBank, the "Subsidiaries") has been duly organized
------------
and, except for Premier National Services, Inc. ("PNS"), is validly
---
existing as a corporation, and each Subsidiary other
than PNS is in good standing under the laws of the jurisdiction of its
organization, has corporate power and authority to own, lease and operate
its properties and to conduct its business as described in any preliminary
prospectus and/or the Prospectus and 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 would not result
in a Material Adverse Effect. All of the issued and outstanding capital
stock of each Subsidiary has been duly authorized and validly issued, is
fully paid and non-assessable, except as otherwise provided in 12 U.S.C.
Section 55 with respect to FSGBank, and is owned by the Company directly,
free and clear of any security interest, mortgage, pledge, lien,
encumbrance, claim or equity; none of the outstanding shares of capital
stock of any Subsidiary was issued in violation of the preemptive or
similar rights of any securityholder of such Subsidiary. The Company has no
direct or indirect subsidiaries other than those set forth on Schedule E.
PNS owns no assets and has no operations.
(vii) Bank Subsidiaries. Except as disclosed in the Prospectus and any
-----------------
preliminary prospectus, the Company and FSGBank conduct their respective
businesses in compliance in all material respects with all federal, state,
local and foreign statutes, laws, rules, regulations, decisions, directives
and orders applicable to them (including, without limitation, all
regulations and orders of, or agreements with, the Board of Governors of
the Federal Reserve System, the Federal Deposit Insurance Corporation
("FDIC"), the Office of the Comptroller of the Currency, the Tennessee
----
Department of Financial Institutions, as applicable, and the Equal Credit
Opportunity Act, the Fair Housing Act, the Community Reinvestment Act, the
Home Mortgage Disclosure Act, all other applicable fair lending laws or
other laws relating to discrimination and the Bank Secrecy Act and Title
III of the USA Patriot Act). Since March 1, 2005, the Company has not
received any communication from any governmental entity asserting that the
Company or FSGBank is not in compliance with any statute, law, rule,
regulation, decision, directive or order, and, to the knowledge of the
Company, there is no continuing investigation, proceeding, or outstanding
executory obligation of the Company relating to any such communication
received prior to March 1, 2005. To the knowledge of the Company, since
Xxxxx 0, 0000, XXXXxxx has not received any communication from any
governmental entity asserting that FSGBank is not in compliance with any
statute, law, rule, regulation, decision, direction or order and, to the
knowledge of the Company, there is no continuing investigation, proceeding,
or outstanding executory obligation of FSGBank relating to any such
communication received prior to March 1, 2005.
(viii) Capitalization. The authorized, issued and outstanding capital
--------------
stock of the Company is as set forth in the Prospectus and any preliminary
prospectus in the column entitled "Actual" under the caption
"Capitalization" (except for subsequent issuances, if any, pursuant to this
Agreement, pursuant to reservations, agreements or employee benefit plans
referred to in the Prospectus and any preliminary prospectus or pursuant to
the exercise of convertible securities or options referred to in the
Prospectus and any preliminary prospectus). The shares of issued and
outstanding capital stock, including the Securities to be purchased by the
Underwriters, have been duly authorized and validly issued and are fully
paid and non-assessable; none of the outstanding shares of capital stock,
including the Securities to be purchased by the Underwriters, was issued in
violation of the preemptive or other similar rights of any securityholder
of the Company.
(ix) Authorization of Agreement. This Agreement has been duly
----------------------------
authorized, executed and delivered by the Company and, when duly executed
by the Underwriters, will constitute the valid and binding agreement of the
Company enforceable against the Company in accordance with its terms,
except as may be limited or otherwise affected by (A) bankruptcy,
insolvency, reorganization, moratorium, fraudulent conveyance or other
similar statutes, rules, regulations or other laws affecting the
enforcement of creditors' rights and remedies generally, and (B) the
unavailability of, or limitation on the availability of, a particular right
or remedy (whether in a proceeding in equity or at law) because of an
equitable principle, public policy or a requirement as to commercial
reasonableness, conscionability or good faith.
(x) Authorization and Description of Securities. The Securities to be
-------------------------------------------
purchased by the Underwriters from the Company have been duly authorized
for issuance and sale to the Underwriters pursuant to this Agreement and,
when issued and delivered by the Company pursuant to this Agreement against
payment of the consideration set forth herein, will be validly issued and
fully paid and non-assessable; the Common Stock conforms to all statements
relating thereto contained in any preliminary prospectus or the Prospectus
and such description conforms to the rights set forth in the instruments
defining the same; no holder of the Securities will be subject to personal
liability by reason of being such a holder; and the issuance of the
Securities is not subject to the preemptive or other similar rights of any
securityholder of the Company.
(xi) Absence of Defaults and Conflicts. Neither the Company nor any
-----------------------------------
Subsidiary is in violation of its charter or by-laws or in default in the
performance or observance of any obligation, agreement, covenant or
condition contained in any contract, indenture, mortgage, deed of trust,
loan or credit agreement, note, lease or other agreement or instrument to
which the Company or any of its Subsidiaries is a party or by which it or
any of them may be bound, or to which any of the property or assets of the
Company or any Subsidiary is subject (collectively, "Agreements and
---------------
Instruments") except in each case for such defaults that would not,
-----------
individually or in the aggregate, result in a Material Adverse Effect; and
the execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated herein and in the
Registration Statement (including the issuance and sale of the Securities
and the use of the proceeds from the sale of the Securities as described in
any preliminary prospectus or the Prospectus under the caption "Use of
------
Proceeds") and compliance by the Company with its obligations hereunder
--------
have been duly authorized by all necessary corporate
action and do not and will not, whether with or without the giving of
notice or passage of time or both, conflict with or constitute a breach of,
or default or Repayment Event (as defined below) under, or result in the
creation or imposition of any lien, charge or encumbrance upon any property
or assets of the Company or any Subsidiary pursuant to, the Agreements and
Instruments (except for such conflicts, breaches or defaults or liens,
charges or encumbrances that would not result in a Material Adverse
Effect), nor will such action result in any violation of the provisions of
the charter or by-laws of the Company or any Subsidiary or any applicable
law, statute, rule, regulation, judgment, order, writ or decree of any
government, government instrumentality or court, domestic or foreign,
having jurisdiction over the Company or any Subsidiary or any of their
assets, properties or operations. As used herein, a "Repayment Event" means
---------------
any event or condition which gives the holder of any note, debenture or
other evidence of indebtedness (or any person acting on such holder's
behalf) the right to require the repurchase, redemption or repayment of all
or a portion of such indebtedness by the Company or any Subsidiary.
(xii) Absence of Labor Dispute. No labor dispute with the employees of
------------------------
the Company or any Subsidiary exists or, to the knowledge of the Company,
is imminent, and the Company is not aware of any existing or imminent labor
disturbance by the employees of any of its or its Subsidiary's principal
suppliers, manufacturers, customers or contractors, which, in either case,
may reasonably be expected to result in a Material Adverse Effect.
(xiii) Absence of Proceedings. There is no action, suit, proceeding,
----------------------
inquiry or investigation before or brought by any court or governmental
agency or body, domestic or foreign, now pending, or, to the knowledge of
the Company, threatened, against or, to the knowledge of the Company,
affecting the Company or any Subsidiary, which is required to be disclosed
in the Registration Statement (other than as disclosed therein), or which
might reasonably be expected to result in a Material Adverse Effect, or
which might reasonably be expected to materially and adversely affect the
properties or assets thereof or the consummation of the transactions
contemplated in this Agreement or the performance by the Company of its
obligations hereunder; the aggregate of all pending legal or governmental
proceedings to which the Company or any Subsidiary is a party or of which
any of their respective property or assets is the subject which are not
described in the Registration Statement, including ordinary routine
litigation incidental to the business, could not reasonably be expected to
result in a Material Adverse Effect.
(xiv) Accuracy of Exhibits. There are no contracts or documents which
--------------------
are required by the 1933 Act to be described in the Registration Statement,
any preliminary prospectus, the Prospectus or the documents incorporated by
reference therein or to be filed as exhibits thereto which have not been so
described and filed as required.
(xv) Possession of Intellectual Property. The Company and the
--------------------------------------
Subsidiaries own or possess, or can acquire on reasonable terms, adequate
patents, patent rights, licenses, inventions, copyrights, know-how
(including trade secrets and other unpatented and/or unpatentable
proprietary or confidential information, systems or procedures),
trademarks, service marks, trade names or other intellectual property
(collectively, "Intellectual Property") necessary to carry on the business
---------------------
now operated by them, and neither the Company nor any Subsidiary has
received any notice or is otherwise aware of any infringement of or
conflict with asserted rights of others with respect to any Intellectual
Property or of any facts or circumstances which would render any
Intellectual Property invalid or inadequate to protect the interest of the
Company or any Subsidiary therein, and which infringement or conflict (if
the subject of any unfavorable decision, ruling or finding) or invalidity
or inadequacy, singly or in the aggregate, would result in a Material
Adverse Effect.
(xvi) Absence of Further Requirements. No filing with, or
----------------------------------
authorization, approval, consent, license, order, registration,
qualification or decree of, any court or governmental authority or agency
is necessary or required for the performance by the Company of its
obligations hereunder, in connection with the offering, issuance or sale of
the Securities hereunder or the consummation of the transactions
contemplated by this Agreement, except such as have been already obtained
or as may be required by the NASD or under the 1933 Act or state securities
laws and any other foreign jurisdiction in which the Securities may be
offered or sold and except for such filings, authorizations, and approvals
as may be necessary for the application of proceeds as described in the
Prospectus to complete the acquisition of Xxxxxxx Bank & Trust.
(xvii) Possession of Licenses and Permits. Except for the
--------------------------------------
administrative dissolution of PNS, the Company and each Subsidiary possess
such permits, licenses, approvals, consents and other authorizations
(collectively, "Governmental Licenses") issued by the appropriate federal,
---------------------
state, local, banking or foreign regulatory agencies or bodies necessary to
conduct the business now operated by them; the Company and each Subsidiary
are in compliance with the terms and conditions of all such Governmental
Licenses, except where the failure so to comply would not, singly or in the
aggregate, have a Material Adverse Effect; all of the Governmental Licenses
are valid and in full force and effect, except when the invalidity of such
Governmental Licenses or the failure of such Governmental Licenses to be in
full force and effect would not have a Material Adverse Effect; and neither
the Company nor any Subsidiary has received any notice of proceedings
relating to the revocation or modification of any such Governmental
Licenses which, singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would result in a Material Adverse
Effect.
(xviii) Title to Property. The Company and each Subsidiary have good
------------------
and marketable title to all real property owned by the Company and/or such
Subsidiaries and good title to all other properties owned by them, in each
case, free and clear of all mortgages, pledges, liens, security interests,
claims, restrictions or encumbrances of any kind except such as (a) are
described in any preliminary prospectus and the Prospectus or (b) do not,
singly or in the aggregate, materially affect the value of such property
and do not interfere with the use made and proposed to be made of such
property by the Company or such Subsidiary; and all of the leases and
subleases material to the business of the Company and the Subsidiaries,
considered as one enterprise, and under which the Company or any Subsidiary
holds properties described in any preliminary prospectus or the Prospectus,
are in full force and effect, and neither the Company nor any Subsidiary
has any notice of any material claim of any sort that has been asserted by
anyone adverse to the rights of the Company or any Subsidiary under any of
the leases or subleases mentioned above, or affecting or questioning the
rights of the Company or the Subsidiaries to the continued possession of
the leased or subleased premises under any such lease or sublease.
(xix) Investment Company Act. The Company is not, and upon the
------------------------
issuance and sale of the Securities as herein contemplated and the
application of the net proceeds therefrom as described in any preliminary
prospectus and the Prospectus will not be, an "investment company" or an
entity "controlled" by an "investment company" as such terms are defined in
the Investment Company Act of 1940, as amended (the "1940 Act").
---------
(xx) Environmental Laws. Except as described in the Registration
-------------------
Statement and except as would not, singly or in the aggregate, result in a
Material Adverse Effect, (A) neither the Company nor any Subsidiary is in
violation of any federal, state, local or foreign statute, law, rule,
regulation, ordinance, code, policy or rule of common law or any judicial
or administrative interpretation thereof, including any judicial or
administrative order, consent, decree or judgment, relating to pollution or
protection of human health, the environment (including, without limitation,
ambient air, surface water, groundwater, land surface or subsurface strata)
or wildlife, including, without limitation, laws and regulations relating
to the release or threatened release of chemicals, pollutants,
contaminants, wastes, toxic substances, hazardous substances, petroleum or
petroleum products (collectively, "Hazardous Materials") or to the
--------------------
manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of Hazardous Materials (collectively, "Environmental
-------------
Laws"), (B) the Company and the Subsidiaries have all permits,
----
authorizations and approvals required under any applicable Environmental
Laws and are each in compliance with their requirements, (C) there are no
previously instituted or, to the Company's knowledge, any pending or
threatened, administrative, regulatory or judicial actions, suits, demands,
demand letters, claims, liens, notices of noncompliance or violation,
investigation or proceedings relating to any Environmental Law against the
Company or any Subsidiary and (D) to the Company's knowledge, there are no
events or circumstances that might reasonably be expected to form the basis
of an order for clean-up or remediation, or an action, suit or proceeding
by any private party or governmental body or agency, against or affecting
the Company or any Subsidiary relating to Hazardous Materials or any
Environmental Laws.
(xxi) Taxes. The Company and the Subsidiaries (other than PNS, which
-----
has been administratively dissolved for failure to file certain annual
reports and pay associated fees) have (a) timely filed all material
foreign, United States federal, state and local tax returns, information
returns, and similar reports that are required to be filed (taking into
account valid extensions), and all tax returns are true, correct and
complete, (b) paid in full all taxes required to be paid by it and any
other assessment, fine or penalty levied against it, except for any such
tax, assessment, fine or penalty that is currently being contested in good
faith or as would not have, individually or in the aggregate, a Material
Adverse Effect, and (c) established on the applicable financial statements
reserves that are adequate for the payment of all taxes not yet due and
payable.
(xxii) Regulatory Agreements. Except for the Company's commitment with
---------------------
the FRB not to incur any additional indebtedness without FRB's consent and
for commitments of the Company and the Bank with respect to the divestiture
of certain real estate investments if the JB&T Agreement is effected,
neither the Company nor any of the Subsidiaries is a party to or subject to
any order, decree, agreement, memorandum or understanding or similar
agreement with, or a commitment letter, supervisory letter or similar
submission to, any governmental entity charged with the supervision or
regulation of depository institutions or engaged in the insurance of
deposits (including the FDIC) or the supervision or regulation of the
Company or the Subsidiaries, except as would not, singly or in the
aggregate, result in a Material Adverse Effect, and neither the Company nor
any Subsidiary has been advised by any such governmental entity that such
governmental entity is contemplating issuing or requesting (or is
considering the appropriateness of issuing or requesting) any such order,
decree, agreement, memorandum or understanding, commitment letter,
supervisory letter or similar submission, except as would not, singly or in
the aggregate, result in a Material Adverse Effect.
(xxiii) Statistical and Market Data. The statistical and market
------------------------------
related data contained in any preliminary prospectus, the Prospectus,
and/or the Registration Statement are based on or derived from sources
which the Company reasonably believes are reliable and accurate.
(xxiv) Relationship. No relationship, direct or indirect, exists
------------
between or among the Company or any Subsidiary, on the one hand, and the
directors, officers, shareholders, customers or suppliers of the Company or
any Subsidiary, on the other, that is required by the 1933 Act to be
described in the Registration Statement, any preliminary prospectus, and/or
the Prospectus and that is not so described.
(xxv) Unlawful Payments. Neither the Company nor any Subsidiary nor,
------------------
to the knowledge of the Company, any director, officer, agent, employee or
other person associated with or acting on behalf of the Company or any
Subsidiary has (A) used any corporate funds for any unlawful contribution,
gift, entertainment or other unlawful expense relating to political
activity; (B) made any direct or indirect unlawful payment to any foreign
or domestic government official or employee from corporate funds; (C)
violated or is in violation of any provision of the Foreign Corrupt
Practices Act of 1977; or (D) made any bribe, rebate, payoff, influence
payment, kickback or other unlawful payment.
(xxvi) Deposit Insurance. The deposit accounts of FSGBank are insured
-----------------
by the FDIC to the legal maximum, FSGBank has paid all premiums and
assessments required by the FDIC and the regulations thereunder and no
proceeding for the termination or revocation of such insurance is pending
or threatened. FSGBank is a member in good standing of the Federal Home
Loan Bank of Cincinnati.
(xxvii) No Registration Rights. No person has the right to require the
----------------------
Company or any Subsidiary to register any securities for sale under the
1933 Act by reason of the filing of the Registration Statement with the
Commission or the issuance and sale of the Securities to be sold by the
Company hereunder.
(xxviii) No Stabilization or Manipulation. The Company has not taken,
--------------------------------
directly or indirectly, any action designed to or that could reasonably be
expected to cause or result in any stabilization or manipulation of the
price of the Securities.
(xxix) No Unauthorized Use of Prospectus. The Company has not
-------------------------------------
distributed and, prior to the later to occur of (i) the Closing Time and
(ii) completion of the distribution of the Securities, will not distribute
any prospectus (as such term is defined in the 0000 Xxx) in connection with
the offering and sale of the Securities other than the Registration
Statement, any preliminary prospectus, the Prospectus or other materials,
if any, permitted by the 1933 Act and approved by the Representative.
(xxx) Forward-Looking Statements. No forward-looking statement (within
--------------------------
the meaning of Section 27A of the 1933 Act and Section 21E of the 0000 Xxx)
contained in the Registration Statement, any preliminary prospectus, or the
Prospectus has been made or reaffirmed without a reasonable basis or has
been disclosed other than in good faith.
(xxxi) Xxxxxxxx-Xxxxx Act. The Company is in compliance with the
-------------------
applicable provisions of the Xxxxxxxx-Xxxxx Act, the rules and regulations
of the Commission thereunder, and the corporate governance and other rules
and requirements of Nasdaq.
(xxxii) Lock-up Agreements. Each of the Company's executive officers
-------------------
and directors, in each case as listed on Schedule D hereto, has executed
and delivered lock-up agreements as contemplated by Section 5(i) hereof.
(xxxiii) Internal Control Over Financial Reporting. The Company and
-------------------------------------------
its Subsidiaries maintain a system of internal control over financial
reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under
the 0000 Xxx) sufficient to provide reasonable assurances 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 GAAP 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 accounting for assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences. The Company's independent registered public accounting firm
and the Audit Committee of the Board of Directors have been advised of: (A)
any significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which could
adversely affect the Company's ability to record, process, summarize, and
report financial data; and (B) 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.
(xxxiv) Fees. Other than as contemplated by this Agreement, except as
----
disclosed in any preliminary prospectus and the Prospectus or except for
any bonus payments to employees in connection with the offering, there is
no broker, finder or other party that is entitled to receive from the
Company or any Subsidiary any brokerage or finder's fee or any other fee,
commission or payment as a result of the transactions contemplated by this
Agreement.
(xxxv) ERISA. The Company and the Subsidiaries or their "ERISA
-----
Affiliates" (as defined below) are in compliance in all material respects
with all presently applicable provisions of the Employee Retirement Income
Security Act of 1974, as amended, including the regulations and published
interpretations thereunder ("ERISA"); no "reportable event" (as defined in
-----
ERISA) has occurred with respect to any "employee benefit plan" (as defined
in ERISA) for which the Company, any Subsidiary, or ERISA Affiliates would
have any liability; none of the Company, any Subsidiary, nor their ERISA
Affiliates have incurred or expect to incur liability under (i) Title IV of
ERISA with respect to termination of, or withdrawal from, any "employee
benefit plan" or (ii) Sections 412, 4971, 4975 or 4980B of the United
States Internal Revenue Code of 1986, as amended, and the regulations and
published interpretations thereunder (collectively the "Code"); and each
----
"employee benefit plan" for which the Company, any Subsidiary or any of
their ERISA Affiliates would have any liability that is intended to be
qualified under Section 401(a) of the Code is so qualified in all material
respects and nothing as occurred, whether by action or by failure to act,
which would cause the loss of such qualification. "ERISA Affiliate" means,
---------------
with respect to the Company or any Subsidiary, any member of any group of
organizations described in Sections 414(b), (c), (m) or (o) of the Code or
Section 400(b) of ERISA of which the Company or such Subsidiary is a
member.
(xxxvi) JB&T Acquisition. The Agreement and Plan of Share Exchange
-----------------
dated May 12, 2005, by and among the Company, FSGBank, and Xxxxxxx Bank &
Trust (the "JB&T Agreement") is in full force and effect as of the date
---------------
hereof, and to the knowledge of the Company, no events, facts or
circumstances exist that, either with the
passage of time or the giving of notice, constitute a default under the
JB&T Agreement or are reasonably likely to give either or both parties a
right to terminate the JB&T Agreement.
(xxxvii) SEC Documents. The Company is subject to and is reporting in
-------------
accordance with the requirements of Section 13 or Section 15(d) of the
Exchange Act.
(b) Officer's Certificates. Any certificate signed by any officer of
the Company or any Subsidiary delivered to the Representative or to counsel for
the Underwriters shall be deemed a representation and warranty by the Company to
each Underwriter as to the matters covered thereby.
SECTION 2. Sale and Delivery to Underwriters; Closing.
-----------------------------------------------
(a) Initial Securities. On the basis of the representations and
warranties herein contained and subject to the terms and conditions herein set
forth, the Company agrees to sell to each Underwriter, severally and not
jointly, and each Underwriter, severally and not jointly, agrees to purchase
from the Company, at the price per share set forth in Schedule C, that number of
Initial Securities set forth in Schedule A opposite the name of such
Underwriter, plus any additional number of Initial Securities which such
Underwriter may become obligated to purchase pursuant to the provisions of
Section 10 hereof, subject, in each case, to such adjustments among the
Underwriters as the Representative in its sole discretion shall make to
eliminate any sales or purchases of fractional securities.
(b) Option Securities. In addition, on the basis of the
representations and warranties herein contained and subject to the terms and
conditions herein set forth, the Company hereby grants an option to the
Underwriters, severally and not jointly, to purchase up to an aggregate of
675,000 additional shares of Common Stock, as set forth in Schedule B, at the
price per share set forth in Schedule C, less an amount per share equal to any
dividends or distributions declared by the Company and payable on the Initial
Securities but not payable on the Option Securities. The option hereby granted
will expire 30 days after the date hereof and may be exercised in whole or in
part from time to time only for the purpose of covering over-allotments which
may be made in connection with the offering and distribution of the Initial
Securities upon notice by the Representative to the Company setting forth the
number of Option Securities as to which the several Underwriters are then
exercising the option and the time and date of payment and delivery for such
Option Securities. Any such time and date of delivery (a "Date of Delivery")
----------------
shall be determined by the Representative, but shall not be later than seven
full business days after the exercise of said option, nor in any event prior to
the Closing Time, as hereinafter defined. If the option is exercised as to all
or any portion of the Option Securities, each of the Underwriters, acting
severally and not jointly, will purchase that proportion of the total number of
Option Securities then being purchased which the number of Initial Securities
set forth in Schedule A opposite the name of such Underwriter bears to the total
number of Initial Securities, subject in each case to such adjustments as the
Representative in its discretion shall make to eliminate any sales or purchases
of fractional shares.
(c) Payment. Payment of the purchase price for, and delivery of
certificates for, the Initial Securities shall be made at the offices of Xxxxxx
& Bird, LLP, 0000 Xxxx Xxxxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxx 00000, or at such
other place as shall be agreed upon by the Representative and the Company, at
10:00 A.M. (Eastern time) on the third (fourth, if the pricing occurs after 4:30
P.M. (Eastern time) on any given day) business day after the date hereof (unless
postponed in accordance with the provisions of Section 10), or such other time
not later than ten business days after such date as shall be agreed upon by the
Representative and the Company (such time and date of payment and delivery being
herein called "Closing Time").
-------------
In addition, in the event that any or all of the Option Securities are
purchased by the Underwriters, payment of the purchase price for, and delivery
of certificates for, such Option Securities shall be made at the above-mentioned
offices, or at such other place as shall be agreed upon by the Representative
and the Company, on each Date of Delivery as specified in the notice from the
Representative to the Company.
Payment shall be made to the Company by wire transfer of immediately
available funds to a bank account designated by the Company against delivery to
the Representative for the respective accounts of the Underwriters of
certificates for the Securities to be purchased by them. It is understood that
each Underwriter has authorized the Representative, for its account, to accept
delivery of, receipt for, and make payment of the purchase price for, the
Initial Securities and the Option Securities, if any, which it has agreed to
purchase. Xxxxx Xxxxxxxx, individually and not as representative of the
Underwriters, may (but shall not be obligated to) make payment of the purchase
price for the Initial Securities or the Option Securities, if any, to be
purchased by any Underwriter whose funds have not been received by the Closing
Time or the relevant Date of Delivery, as the case may be, but such payment
shall not relieve such Underwriter from its obligations hereunder.
(d) Denominations; Registration. The Securities to be purchased by the
Underwriter hereunder, in definitive form, and in such authorized denominations
and registered in such names as Xxxxx Xxxxxxxx may request upon at least
forty-eight hours' prior notice to the Company shall be delivered by or on
behalf of the Company to Xxxxx Xxxxxxxx, through the facilities of the
Depository Trust Company ("DTC"), for the account of the Underwriters, against
---
payment by or on behalf of the Underwriters of the purchase therefor by wire
transfer of Federal (same day) funds to the account specified by the Company to
Xxxxx Xxxxxxxx. The Company will cause the certificates representing the
Securities to be made available for checking and packaging at least twenty-four
hours prior to the Closing Time with respect thereto at the office of DTC or its
designated custodian (the "Designated Office"). The time and date of such
------------------
delivery and payment shall be, with respect to the Initial Securities, 10:00
a.m., New York time, on the date specified by Xxxxx Xxxxxxxx or such other time
and date as Xxxxx Xxxxxxxx and the Company may agree upon in writing, and, with
respect to the Option Securities, 10:00 a.m., New York time, on the date
specified by Xxxxx Xxxxxxxx in the written notice given by Xxxxx Xxxxxxxx of the
Underwriter's election to purchase such Option Securities, or such other time
and date as Xxxxx Xxxxxxxx and the Company may agree upon in writing.
SECTION 3. Covenants of the Company. The Company covenants with each
-------------------------
Underwriter as follows:
(a) Compliance with Securities Regulations and Commission Requests.
The Company, subject to Section 3(b), will comply with the requirements of Rule
430A or Rule 434, as applicable, and will notify the Representative promptly,
and confirm the notice in writing, (i) when any post-effective amendment to the
Registration Statement shall become effective, or any supplement to the
Prospectus or any amended Prospectus shall have been filed, (ii) of the receipt
of any comments from the Commission, (iii) of any request by the Commission for
any amendment to the Registration Statement or any amendment or supplement to
the Prospectus or for additional information, and (iv) of the issuance by the
Commission of any stop order suspending the effectiveness of the Registration
Statement, of any order preventing or suspending the use of the Prospectus, or
of the suspension of the qualification of the Securities for offering or sale in
any jurisdiction, or of the initiation or threatening of any proceedings for any
of such purposes. The Company will promptly effect the filings necessary
pursuant to Rule 424(b) and will take such steps as it deems necessary to
ascertain promptly whether the form of prospectus transmitted for filing under
Rule 424(b) was received for filing by the Commission and, in the event that it
was not, it will promptly file such prospectus. The Company will use
commercially reasonable efforts to prevent the issuance of any stop order and,
if any stop order is issued, to obtain the lifting thereof at the earliest
possible moment.
(b) Filing of Amendments. The Company will give the Representative
notice of its intention to file or prepare any amendment to the Registration
Statement (including any filing under Rule 462(b)) or any amendment, supplement
or revision to either the prospectus included in the Registration Statement at
the time it became effective or to the Prospectus, whether pursuant to the 1933
Act, the 1934 Act or otherwise, will furnish the Representative with copies of
any such documents a reasonable amount of time prior to such proposed filing or
use, as the case may be, and will not file or use any such document to which the
Representative or counsel for the Underwriters shall have reasonably objected.
(c) Delivery of Registration Statements. The Company has furnished or
will deliver to the Representative and counsel for the Underwriters, without
charge, signed copies of the Registration Statement as originally filed and of
each amendment thereto (including exhibits filed therewith or incorporated by
reference therein and documents incorporated or deemed to be incorporated by
reference therein) and signed copies of all consents and certificates of
experts, and will also deliver to the Representative, without charge, a
conformed copy of the Registration Statement as originally filed and of each
amendment thereto (without exhibits) for each of the Underwriters. The copies
of the Registration Statement and each amendment thereto furnished to the
Underwriters will be identical to the electronically transmitted copies thereof
filed with the Commission pursuant to XXXXX, except to the extent permitted by
Regulation S-T under the 1933 Act.
(d) Delivery of Prospectuses. The Company has delivered to each
Underwriter, without charge, as many copies of each preliminary prospectus as
such Underwriter reasonably requested, and the Company hereby consents to the
use of such copies for purposes permitted by the 1933 Act. The Company will
furnish to each Underwriter, without charge, during the period when the
Prospectus is required to be delivered under the 1933 Act or the 1934 Act, such
number of copies of the Prospectus (as amended or supplemented) as such
Underwriter may reasonably
request. The Prospectus and any amendments or supplements thereto furnished to
the Underwriters will be identical to the electronically transmitted copies
thereof filed with the Commission pursuant to XXXXX, except to the extent
permitted by Regulation S-T under the 1933 Act.
(e) Continued Compliance with Securities Laws. The Company will comply
with the 1933 Act and the 1934 Act so as to permit the completion of the
distribution of the Securities as contemplated in this Agreement and in the
Prospectus. If at any time when a prospectus is required by the 1933 Act to be
delivered in connection with sales of the Securities as contemplated by this
Agreement, any event shall occur or condition shall exist as a result of which
it is necessary, in the reasonable opinion of counsel for the Underwriters or
for the Company, to amend the Registration Statement or amend or supplement the
Prospectus in order that the Prospectus will not include any untrue statements
of a material fact or omit to state a material fact necessary in order to make
the statements therein not misleading in the light of the circumstances existing
at the time it is delivered to a purchaser, or if it shall be necessary, in the
reasonable opinion of such counsel, at any such time to amend the Registration
Statement or amend or supplement the Prospectus in order to comply with the
requirements of the 1933 Act in connection with sales of the Securities as
contemplated by this Agreement, the Company will promptly prepare and file with
the Commission, subject to Section 3(b), such amendment or supplement as may be
necessary to correct such statement or omission or to make the Registration
Statement or the Prospectus comply with such requirements, and the Company will
furnish to the Underwriters such number of copies of such amendment or
supplement as the Underwriters may reasonably request.
(f) Blue Sky Qualifications. The Company will use its commercially
reasonable efforts, in cooperation with the Underwriters, to qualify the
Securities for offering and sale under the applicable securities laws of such
states and other jurisdictions (domestic or foreign) as the Representative may
reasonably have designated in writing and to maintain such qualifications in
effect for a period of not less than one year from the later of the effective
date of the Registration Statement and any Rule 462(b) Registration Statement;
provided, however, that the Company shall not be obligated to execute or file
any general consent to service of process or to qualify or register as a foreign
corporation or as a dealer in securities in any jurisdiction in which it is not
so qualified, required to file such a consent, or to subject itself to taxation
in respect of doing business in any jurisdiction in which it is not otherwise so
subject. In each U.S. jurisdiction in which the Securities have been so
qualified, the Company will file such statements and reports as may be required
by the laws of such jurisdiction to continue such qualification in effect for a
period of not less than one year from the effective date of the Registration
Statement and any Rule 462(b) Registration Statement.
(g) Rule 158. The Company will timely file such reports pursuant to
the 1934 Act as are necessary in order to make generally available to its
securityholders as soon as practicable an earnings statement for the purposes
of, and to provide the benefits contemplated by, the last paragraph of Section
11(a) of the 1933 Act.
(h) Use of Proceeds. The Company will use the net proceeds received by
it from the sale of the Securities in the manner specified in the Prospectus
under "Use of Proceeds."
(i) Listing. The Company will use its commercially reasonable efforts
to effect and maintain the quotation of the Securities on the Nasdaq National
Market and will file with the Nasdaq National Market all documents and notices
required by the Nasdaq National Market of companies that have securities that
are traded in the over-the-counter market and quotations for which are reported
by the Nasdaq National Market.
(j) Restriction on Sale of Securities. During a period of 180 days
from the date of the Prospectus (the "Restricted Period"), the Company will not,
-----------------
without the prior written consent of Xxxxx Xxxxxxxx, directly or indirectly, (i)
offer, pledge, sell, contract to sell, sell any option or contract to purchase,
purchase any option or contract to sell, grant any option, right or warrant to
purchase or otherwise transfer or dispose of any share of Common Stock or any
securities convertible into or exercisable or exchangeable for Common Stock or
file any registration statement under the 1933 Act with respect to any of the
foregoing or (ii) enter into any swap, hedge or any other agreement or any
transaction that transfers, in whole or in part, directly or indirectly, the
economic consequence of ownership of the Common Stock, whether any such swap,
hedge or transaction described in clause (i) or (ii) above is to be settled by
delivery of Common Stock or such other securities, in cash or otherwise. The
foregoing sentence shall not apply to (A) the Securities to be sold hereunder,
(B) any shares of Common Stock issued by the Company upon the exercise of an
option or warrant outstanding on the date hereof and referred to in the
Prospectus and any preliminary prospectus, (C) any shares of Common Stock or
other securities issued, options to purchase Common Stock or other securities
granted pursuant to existing director or employee benefit plans of the Company
referred to in the Prospectus and any preliminary prospectus, (D) any shares of
Common Stock or any securities convertible into or exercisable or exchangeable
for Common Stock offered, pledged or contracted to be sold as consideration for
the acquisition by the Company or any Subsidiary of the business or assets of
any entity not controlled by any executive officer, director, or affiliate of
the Company, or (E) any transfer, sale or other disposition with the prior
written consent of Xxxxx Xxxxxxxx. Xxxxx Xxxxxxxx agrees not to provide such
consent without providing notice to each Underwriter to permit compliance with
applicable provisions of NASD Conduct Rule 2177(f) restricting publication and
distribution of research and public appearances by research analysts before and
after the expiration, waiver or termination of a lock-up agreement and agrees
only to provide consent in circumstances that will permit such compliance by the
Underwriters. Notwithstanding the foregoing, in the event that either (i) during
the period that begins on the date that is 15 calendar days plus three (3)
business days before the last day of the Restricted Period and ends on the last
day of the Restricted Period, the Company issues an earnings release or material
news or a material event relating to the Company occurs, or (ii) prior to the
expiration of the Restricted Period, the Company announces that it will release
earnings results during the 16-day period beginning on the last day of the
Restricted Period, the restrictions set forth herein will continue to apply
until the expiration of the date that is 15 calendar days plus three (3)
business days after the date on which the earnings release is issued or the
material news or event related to the Company occurs.
(k) Reporting Requirements. The Company, during the period when the
Prospectus is required to be delivered under the 1933 Act or the 1934 Act, will
file all documents required to be filed with the Commission pursuant to the 1934
Act within the time periods required by the 1934 Act (including as allowed to be
extended pursuant to Form 12b-25 or otherwise under the 1934 Act).
(l) Compliance with the Xxxxxxxx-Xxxxx Act. During the time when a
Prospectus is required to be delivered under the 1933 Act, the Company shall at
all times comply, in all material respects, with all applicable provisions of
the Xxxxxxxx-Xxxxx Act, including the related rules and regulations promulgated
thereunder by the Commission and The Nasdaq Stock Market, Inc., in effect from
time to time.
(m) Compliance with the Cuba Act. In accordance with that certain
Florida Act relating to the disclosure of doing business with Cuba, codified as
Section 517.075 of the Florida statutes and the rules and regulations thereunder
(the "Cuba Act") and without limitation to the provisions of Sections 6 and 7
---------
hereof, the Company agrees to indemnify and hold harmless each Underwriter from
and against any and all loss, liability, claim, damage and expense whatsoever
(including fees and disbursements of counsel), as incurred, arising out of any
violation by the Company of the Cuba Act.
SECTION 4. Payment of Expenses.
---------------------
(a) Expenses. The Company will pay or cause to be paid all expenses
incident to the performance of their obligations under this Agreement, including
(i) the preparation, printing and filing of the Registration Statement
(including financial statements and exhibits) as originally filed and of each
amendment thereto, (ii) the printing and delivery to the Underwriters of this
Agreement, any Agreement among Underwriters and such other documents as may be
required in connection with the offering, purchase, sale, issuance or delivery
of the Securities, (iii) the preparation, issuance and delivery of the
certificates for the Securities to the Underwriters, including any stock or
other transfer taxes and any stamp or other duties payable upon the sale,
issuance or delivery of the Securities to the Underwriters, (iv) the fees and
disbursements of the Company's counsel, accountants and other advisors, (v) the
qualification of the Securities under securities laws in accordance with the
provisions of Section 3(f) hereof, including actual filing fees and the
reasonable fees and disbursements of counsel for the Underwriters in connection
therewith and in connection with the preparation of the Blue Sky Survey and any
supplement thereto (not to exceed $2,500 in the aggregate without the Company's
written consent), (vi) if requested by the Representative, the printing and
delivery to the Underwriters of copies of each preliminary prospectus, and of
the Prospectus and any amendments or supplements thereto, (vii) the preparation,
printing and delivery to the Underwriters of copies of the Blue Sky Survey and
any supplement thereto, (viii) the fees and expenses of any transfer agent or
registrar for the Securities and (ix) the actual filing fees incident to, and
the reasonable fees and disbursements of counsel to the Underwriters (not to
exceed $7,500 in the aggregate without the Company's written consent) in
connection with, the review by the National Association of Securities Dealers,
Inc. (the "NASD") of the terms of the sale of the Securities and (x) the actual
----
fees and expenses incurred in connection with the inclusion of the Securities in
the Nasdaq National Market. Except as provided in this Section 4, Section 6 and
Section 7 hereof, the Underwriters shall pay their own expenses including the
fees and disbursements of their counsel.
(b) Termination of Agreement. If this Agreement is terminated by the
Representative in accordance with the provisions of Section 5, Section 9(a) or
Section 11 hereof, the Company shall reimburse the Underwriters for all of their
out-of-pocket expenses, including the reasonable fees and disbursements of
counsel for the Underwriters, incurred by the Underwriters in connection with
the proposed purchase and the offering and sale of the Securities as
contemplated in this Agreement.
SECTION 5. Conditions of Underwriters' Obligations. The obligations of
---------------------------------------
the several Underwriters hereunder are subject to the accuracy of the
representations and warranties of the Company contained in Section 1 hereof or
in certificates of any officer of the Company or any Subsidiary of the Company
delivered pursuant to the provisions hereof, to the performance by the Company
of its covenants and other obligations hereunder, and to the following further
conditions:
(a) Effectiveness of Registration Statement. The Registration
Statement, including any Rule 462(b) Registration Statement, has become
effective and at Closing Time no stop order suspending the effectiveness of the
Registration Statement shall have been issued under the 1933 Act or proceedings
therefor initiated or, to the knowledge of the Company, threatened by the
Commission, and any request on the part of the Commission for additional
information (to be included in the Registration Statement or Prospectus) shall
have been complied with to the reasonable satisfaction of counsel to the
Underwriters. A prospectus containing the Rule 430A Information shall have been
filed with the Commission in accordance with Rule 424(b) (or a post-effective
amendment providing such information shall have been filed and declared
effective in accordance with the requirements of Rule 430A).
(b) Opinion of Counsel for Company. At Closing Time, the
Representative shall have received the favorable opinion, dated as of Closing
Time, of Xxxxxx Xxxxxxxxx LLP, counsel for the Company, in the form and with
respect to the matters set forth on Exhibit A, together with signed or
reproduced copies of such letter for each of the other Underwriters to the
effect set forth in Exhibit A hereto.
(c) Opinion of Counsel for Underwriters. At Closing Time, the
Representative shall have received the favorable opinion, dated as of Closing
Time, of Xxxxxx & Bird, LLP, counsel for the Underwriters.
(d) Officers' Certificate. At Closing Time, there shall not have been,
since the date hereof or since the respective dates as of which information is
given in the Prospectus, any material adverse change in the condition, financial
or otherwise, or in the earnings, business affairs or business prospects of the
Company and the Subsidiaries considered as one enterprise, whether or not
arising in the ordinary course of business, and the Representative shall have
received a certificate of the President or a Vice President of the Company and
of the chief financial or chief accounting officer of the Company, dated as of
Closing Time, to the effect that (i) there has been no such material adverse
change, (ii) the representations and warranties in Section 1(a) hereof are true
and correct with the same force and effect as though expressly made at and as of
Closing Time, (iii) the Company has complied with all agreements and satisfied
all conditions on its part to be performed or satisfied at or prior to Closing
Time, and (iv) no stop order suspending the effectiveness of the Registration
Statement has been issued and no proceedings for that purpose have been
instituted or, to the knowledge of the Company, are pending or are contemplated
by the Commission.
(e) Accountant's Comfort Letter. At the time of the execution of this
Agreement, the Representative shall have received from Decosimo a letter dated
such date, in form and substance reasonably satisfactory to the Representative,
together with signed or reproduced copies of such letter for each of the other
Underwriters containing statements and information of the type ordinarily
included in accountants' "comfort letters" to underwriters with respect to the
financial statements and certain financial information contained in the
Registration Statement and the Prospectus.
(f) Bring-down Comfort Letter. At Closing Time, the Representative
shall have received from Decosimo a letter, dated as of Closing Time, to the
effect that they reaffirm the statements made in the letter furnished pursuant
to subsection (e) of this Section, except that the specified date referred to
shall be a date not more than three (four, if the pricing occurs after 4:30 P.M.
Eastern time on any given day) business days prior to Closing Time.
(g) Approval of Listing. At Closing Time, the Securities shall have
been approved for inclusion in the Nasdaq National Market, subject only to
official notice of issuance.
(h) No Objection. The NASD has confirmed that it has not raised any
objection with respect to the fairness and reasonableness of the underwriting
terms and arrangements.
(i) Lock-up Agreements. Prior to the distribution of the preliminary
Prospectus, the Representative shall have received an agreement substantially in
the form of Exhibit C hereto signed by the persons listed on Schedule D hereto.
(j) Delivery of Prospectus. The Company shall have complied with the
provisions hereof with respect to the furnishing of prospectuses on the New York
Business Day next succeeding the date of this Agreement.
(k) No Termination Event. On or after the date hereof there shall not
have occurred any of the events, circumstances or occurrences set forth in
Section 9(a).
(l) DTC. The Company shall have taken all actions as are reasonably
required to render the Securities eligible to be traded via DTC, including but
not limited to delivery of a Blanket Letter of Representations to DTC.
(m) Conditions to Purchase of Option Securities. In the event that the
Underwriters exercise their option provided in Section 2(b) hereof to purchase
all or any portion of the Option Securities, the representations and warranties
of the Company contained herein and the statements in any certificates furnished
by the Company and any subsidiary of the Company hereunder shall be true and
correct with the same force and effect as though expressly made at each Date of
Delivery and, at the relevant Date of Delivery, the Representative shall have
received:
(i) Officers' Certificate. A certificate, dated such Date of Delivery,
---------------------
of the President or a Vice President of the Company and of the chief
financial or chief accounting officer of the Company confirming that the
certificate delivered at the Closing Time pursuant to Section 5(d) hereof
remains true and correct in all material respects as of such Date of
Delivery.
(ii) Opinion of Counsel for Company. The favorable opinion of Xxxxxx
-------------------------------
Xxxxxxxxx LLP, counsel for the Company, in the form and with respect to the
matters set forth on Exhibit A, dated such Date of Delivery, relating to
the Option Securities to be purchased on such Date of Delivery and
otherwise to the same effect as the opinion required by Section 5(b)
hereof.
(iii) Opinion of Counsel for Underwriters. The favorable opinion of
-------------------------------------
Xxxxxx & Bird, LLP, counsel for the Underwriters, dated such Date of
Delivery, relating to the Option Securities to be purchased on such Date of
Delivery and otherwise to the same effect as the opinion required by
Section 5(c) hereof.
(iv) Bring-down Comfort Letter. A letter from Decosimo, in form and
---------------------------
substance reasonably satisfactory to the Representative and dated such Date
of Delivery, substantially in the same form and substance as the letter
furnished to the Representative pursuant to Section 5(f) hereof, except
that the "specified date" in the letter furnished pursuant to this
paragraph shall be a date not more than five days prior to such Date of
Delivery.
(v) No Termination Event. There shall not have occurred prior to the
---------------------
Date of Delivery any of the events, circumstances or occurrences set forth
in Section 9(a).
(n) Additional Documents. At Closing Time and at each Date of
Delivery, as the case may be, counsel for the Underwriters shall have been
furnished with such documents and opinions from the Company as they may require
for the purpose of enabling them to pass upon the issuance and sale of the
Securities as herein contemplated, or in order to evidence the accuracy of any
of the representations or warranties, or the fulfillment of any of the
conditions, herein contained; and all proceedings taken by the Company in
connection with the issuance and sale of the Securities as herein contemplated
shall be reasonably satisfactory in form and substance to the Representative and
counsel for the Underwriters.
(o) Termination of Agreement. If any condition specified in this
Section 5 shall not have been fulfilled when and as required to be fulfilled,
this Agreement, or, in the case of any condition to the purchase of Option
Securities on a Date of Delivery which is after the Closing Time, the
obligations of the several Underwriters to purchase the relevant Option
Securities, may be terminated by the Representative by written notice to the
Company at any time at or prior to Closing Time or such Date of Delivery, as the
case may be, and such termination shall be without liability of any party to
any other party except as provided in Section 4 and except that Sections 1, 6, 7
and 8 shall survive any such termination and remain in full force and effect.
SECTION 6. Indemnification.
---------------
(a) Indemnification of Underwriters. The Company and the Subsidiaries
agree, jointly and severally, to indemnify and hold harmless each Underwriter
and each person, if any, who controls any Underwriter within the meaning of
Section 15 of the 1933 Act or Section 20 of the 1934 Act to the extent and in
the manner set forth in clauses (i), (ii) and (iii) below:
(i) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement
(or any amendment thereto), including the Rule 430A Information and the
Rule 434 Information, if applicable, or the omission or alleged omission
therefrom of a material fact required to be stated therein or necessary to
make the statements therein not misleading or arising out of any untrue
statement or alleged untrue statement of a material fact included in any
preliminary prospectus or the Prospectus (or any amendment or supplement
thereto), or the omission or alleged omission therefrom of a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission; provided that (subject to Section
6(d) below) any such settlement is effected with the written consent of the
Company; and
(iii) against any and all expense whatsoever, as incurred (including
the fees and disbursements of counsel chosen by Xxxxx Xxxxxxxx), reasonably
incurred in investigating, preparing or defending against any litigation,
or any investigation or proceeding by any governmental agency or body,
commenced or threatened, or any claim whatsoever based upon any such untrue
statement or omission, or any such alleged untrue statement or omission, to
the extent that any such expense is not paid under (i) or (ii) above;
provided, however, that this indemnity agreement shall not apply to any loss,
-------- -------
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company by any
Underwriter through Xxxxx Xxxxxxxx expressly for use in the Registration
Statement (or any amendment thereto), including the Rule 430A Information, if
applicable, or any preliminary prospectus or the Prospectus (or any amendment or
supplement thereto); provided further that the parties acknowledge and agree
that the only information that any Underwriter has furnished to the Company
specifically for inclusion in the Registration Statement, preliminary prospectus
and Prospectus (or any amendment or supplement thereto) are the last sentence of
the last paragraph on the front cover page of the Prospectus and the preliminary
prospectus regarding the anticipated delivery date of the Securities, the
concession and reallowance figures appearing in the Prospectus in the section
entitled "Underwriting" and the information contained under the captions
"Underwriting - Stabilization" and "Underwriting - Passive Market Making."
(b) Indemnification of Company and Directors and Officers. Underwriter
severally agrees to indemnify and hold harmless the Company, its directors, each
of its officers who signed the Registration Statement, and each person, if any,
who controls the Company within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act, against any and all loss, liability, claim, damage
and expense described in the indemnity contained in subsection (a) of this
Section, as incurred, but only with respect to untrue statements or omissions,
or alleged
untrue statements or omissions, made in the Registration Statement (or any
amendment thereto), including the Rule 430A Information, if applicable, or any
preliminary prospectus or the Prospectus (or any amendment or supplement
thereto) in reliance upon and in conformity with written information furnished
to the Company by such Underwriter through Xxxxx Xxxxxxxx expressly for use in
the Registration Statement (or any amendment thereto) or such preliminary
prospectus or the Prospectus (or any amendment or supplement thereto), provided
that the parties acknowledge and agree that the only written information that
any Underwriter has furnished to the Company specifically for inclusion in the
Registration Statement, preliminary prospectus and Prospectus (or any amendment
or supplement thereto) are the last sentence of the last paragraph on the front
cover page of the Prospectus and the preliminary prospectus regarding the
anticipated delivery date of the Securities, the concession and reallowance
figures appearing in the Prospectus in the section entitled "Underwriting" and
the information contained under the captions "Underwriting - Stabilization" and
"Underwriting - Passive Market Making."
(c) Actions against Parties; Notification. Each indemnified party
shall give notice as promptly as reasonably practicable to each indemnifying
party of any action commenced against it in respect of which indemnity may be
sought hereunder, but failure to so notify an indemnifying party shall not
relieve such indemnifying party from any liability hereunder to the extent it is
not materially prejudiced as a result thereof and in any event shall not relieve
it from any liability which it may have otherwise than on account of this
indemnity agreement. In the case of parties indemnified pursuant to Section
6(a) above, counsel to the indemnified parties shall be selected by Xxxxx
Xxxxxxxx, and, in the case of parties indemnified pursuant to Section 6(b)
above, counsel to the indemnified parties shall be selected by the Company. An
indemnifying party may participate at its own expense in the defense of any such
action; provided, however, that counsel to the indemnifying party shall not
(except with the consent of the indemnified party) also be counsel to the
indemnified party. In no event shall the indemnifying parties be liable for
fees and expenses of more than one counsel (in addition to any local counsel)
separate from their own counsel for all indemnified parties in connection with
any one action or separate but similar or related actions in the same
jurisdiction arising out of the same general allegations or circumstances. No
indemnifying party shall, without the prior written consent of the indemnified
parties, settle or compromise or consent to the entry of any judgment with
respect to any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim whatsoever in
respect of which indemnification or contribution could be sought under this
Section 6 or Section 7 hereof (whether or not the indemnified parties are actual
or potential parties thereto), unless such settlement, compromise or consent (i)
includes an unconditional release of each indemnified party from all liability
arising out of such litigation, investigation, proceeding or claim and (ii) does
not include a statement as to or an admission of fault, culpability or a failure
to act by or on behalf of any indemnified party.
(d) Settlement without Consent if Failure to Reimburse. If at any time
an indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel, such indemnifying party
agrees that it shall be liable for any settlement of the nature contemplated by
Section 6(a)(ii) effected without its written consent if (i) such settlement is
entered into more than 45 days after receipt by such indemnifying party of the
aforesaid request, (ii) such indemnifying party shall have received notice of
the terms of such settlement at least 30 days prior to such settlement being
entered into and (iii) such indemnifying
party shall not have reimbursed such indemnified party in accordance with such
request prior to the date of such settlement.
SECTION 7. Contribution. If the indemnification provided for in
------------
Section 6 hereof is for any reason unavailable to or insufficient to hold
harmless an indemnified party in respect of any losses, liabilities, claims,
damages or expenses referred to therein, then each indemnifying party shall
contribute to the aggregate amount of such losses, liabilities, claims, damages
and expenses incurred by such indemnified party, as incurred, (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 hand from the offering
of the Securities pursuant to this Agreement or (ii) if the allocation provided
by clause (i) 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 of the
Underwriters on the other hand in connection with the statements or omissions
which resulted in such losses, liabilities, claims, damages 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 in connection with the offering of the Securities
pursuant to this Agreement shall be deemed to be in the same respective
proportions as the total net proceeds from the offering of the Securities
pursuant to this Agreement (before deducting expenses) received by the Company
and the total underwriting discount received by the Underwriters, in each case
as set forth on the cover of the Prospectus.
The relative fault of the Company on the one hand and the Underwriters on
the other hand shall be determined by reference to, among other things, whether
any such untrue or alleged untrue statement of a material fact or omission or
alleged omission to state a material fact relates to information supplied by the
Company or by the Underwriters and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission.
The Company and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section 7 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 which does not take account of the
equitable considerations referred to above in this Section 7. The aggregate
amount of losses, liabilities, claims, damages and expenses incurred by an
indemnified party and referred to above in this Section 7 shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue or alleged untrue
statement or omission or alleged omission.
Notwithstanding the provisions of this Section 7, no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the Securities underwritten by it and distributed to the public
were offered to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of any 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.
For purposes of this Section 7, each person, if any, who controls an
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act shall have the same rights to contribution as such Underwriter, and
each director of the Company, each officer of the Company who signed the
Registration Statement, and each person, if any, who controls the Company within
the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act shall
have the same rights to contribution as the Company. The Underwriters'
respective obligations to contribute pursuant to this Section 7 are several in
proportion to the number of Initial Securities set forth opposite their
respective names in Schedule A hereto and not joint.
SECTION 8. Representations, Warranties and Agreements to Survive
----------------------------------------------------------
Delivery. All representations, warranties and agreements contained in this
--------
Agreement or in certificates of officers of the Company or any Subsidiary
submitted pursuant hereto, shall remain operative and in full force and effect,
regardless of any investigation made by or on behalf of any Underwriter or
controlling person, or by or on behalf of the Company, and shall survive
delivery of the Securities to the Underwriters.
SECTION 9. Termination of Agreement.
--------------------------
(a) Termination; General. The Representative may terminate this
Agreement, by written notice to the Company, at any time at or prior to Closing
Time (i) if there has been, since the time of execution of this Agreement or
since the respective dates as of which information is given in the Prospectus,
any Material Adverse Effect, or (ii) if there has occurred (A) any outbreak or
escalation of hostilities involving the United States or the declaration by the
United States of a national emergency or war, or (B) any other calamity or
crisis or any change in financial, political or economic conditions in the
United States or elsewhere, including without limitation, as a result of
terrorist activities occurring after the date hereof, if the effect of any such
event specified in (A) or (B) in the judgment of the Representative makes it
impracticable or inadvisable to proceed with the public offering or the delivery
of the Securities being delivered at the Date of Delivery on the terms and in
the manner contemplated in the Prospectus (iii) if trading in any securities of
the Company has been suspended or materially limited by the Commission or the
Nasdaq National Market, or if trading generally on the American Stock Exchange
or the New York Stock Exchange or in the Nasdaq National Market has been
suspended or materially limited, or minimum or maximum prices for trading have
been fixed, or maximum ranges for prices have been required, by any of said
exchanges or by such system or by order of the Commission, the National
Association of Securities Dealers, Inc. or any other governmental authority, or
(iv) if a banking moratorium has been declared by either Federal or New York or
Tennessee authorities or a material disruption in commercial banking or
securities settlement or clearance services in the United States has occurred.
(b) Liabilities. If this Agreement is terminated in accordance with
this Section 9, such termination shall be without liability of any party to any
other party except as provided in Section 4 hereof, and provided further that
Sections 1, 6, 7 and 8 shall survive such termination and remain in full force
and effect.
SECTION 10. Default by One or More of the Underwriters. If one or more
------------------------------------------
of the Underwriters shall fail at Closing Time or a Date of Delivery to purchase
the Securities which it or they are obligated to purchase under this Agreement
(the "Defaulted Securities"), the Representative shall have the right, within 24
--------------------
hours thereafter, to make arrangements for one or more of the non-defaulting
Underwriters, or any other underwriters, to purchase all, but not less than all,
of the Defaulted Securities in such amounts as may be agreed upon and upon the
terms herein set forth; if, however, the Representative shall not have completed
such arrangements within such 24-hour period, then:
(a) if the number of Defaulted Securities does not exceed 10% of the
number of Securities to be purchased on such date, each of the non-defaulting
Underwriters shall be obligated, severally and not jointly, to purchase the full
amount thereof in the proportions that their respective underwriting obligations
hereunder bear to the underwriting obligations of all non-defaulting
Underwriters, or
(b) if the number of Defaulted Securities exceeds 10% of the number of
Securities to be purchased on such date, this Agreement or, with respect to any
Date of Delivery which occurs after the Closing Time, the obligation of the
Underwriters to purchase and of the Company to sell the Option Securities to be
purchased and sold on such Date of Delivery shall terminate without liability on
the part of any non-defaulting Underwriter.
No action taken pursuant to this Section shall relieve any defaulting
Underwriter from liability in respect of its default.
In the event of any such default which does not result in a termination of
this Agreement or, in the case of a Date of Delivery which is after the Closing
Time, which does not result in a termination of the obligation of the
Underwriters to purchase and the Company to sell the relevant Option Securities,
as the case may be, either (i) the Representative or (ii) the Company shall have
the right to postpone Closing Time or the relevant Date of Delivery, as the case
may be, for a period not exceeding seven days in order to effect any required
changes in the Registration Statement or Prospectus or in any other documents or
arrangements. As used herein, the term "Underwriter" includes any person
-----------
substituted for an Underwriter under this Section 10.
SECTION 11. Default by the Company. If the Company shall fail at
-------------------------
Closing Time or at the Date of Delivery to sell the number of Securities that it
is obligated to sell hereunder, then this Agreement shall terminate without any
liability on the part of any nondefaulting party; provided, however, that the
provisions of Sections 1, 4, 6, 7 and 8 shall remain in full force and effect.
No action taken pursuant to this Section shall relieve the Company from
liability, if any, in respect of such default.
SECTION 12. Notices. All notices and other communications hereunder
-------
shall be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the
Underwriters shall be directed to the Representative at Xxxxx, Xxxxxxxx & Xxxxx,
Inc., 000 Xxxxxxx Xxxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, attention of
General Counsel; notices to the Company shall be directed to it at First
Security Group Inc., 000 Xxxxx Xxxxxx, Xxxxxxxxxxx, Xxxxxxxxx 00000, attention
of Xxxxxx X. Xxxxxx, with a copy (which shall not constitute notice) to Xxxxxx
Xxxxxxxxx LLP, One Atlantic Center,
Fourteenth Floor, 0000 X. Xxxxxxxxx Xxxxxx, X.X., Xxxxxxx, Xxxxxxx 00000,
attention of Xxxxxxx X. Xxxxxxx.
SECTION 13. Parties. This Agreement shall inure to the benefit of and
-------
be binding upon the Underwriters and the Company and their respective
successors. Nothing expressed or mentioned in this Agreement is intended or
shall be construed to give any person, firm or corporation, other than the
Underwriters and the Company and their respective successors and the controlling
persons and officers and directors referred to in Sections 6 and 7 and their
heirs and legal representatives, any legal or equitable right, remedy or claim
under or in respect of this Agreement or any provision herein contained. This
Agreement and all conditions and provisions hereof are intended to be for the
sole and exclusive benefit of the Underwriters and the Company and their
respective successors, and said controlling persons and officers and directors
and their heirs and legal representatives, and for the benefit of no other
person, firm or corporation. No purchaser of Securities from any Underwriter
shall be deemed to be a successor by reason merely of such purchase.
SECTION 14. GOVERNING LAW AND TIME. THIS AGREEMENT SHALL BE GOVERNED
-----------------------
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. EXCEPT
AS OTHERWISE SET FORTH HEREIN, SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY
TIME.
SECTION 15. General Provisions. This Agreement constitutes the entire
------------------
agreement of the parties to this Agreement and supersedes all prior written or
oral and all contemporaneous oral agreements, understandings and negotiations
with respect to the subject matter hereof. This Agreement may be executed in
two or more counterparts, each one of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same instrument.
This Agreement may not be amended or modified unless in writing by all of the
parties hereto, and no condition herein (express or implied) may be waived
unless waived in writing by each party whom the condition is meant to benefit.
The Article and Section headings herein and the Table of Contents are for
convenience only and shall not affect the construction hereof.
[Signatures on Next Page]
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to the Company, whereupon this instrument, along with all
counterparts, will become a binding agreement among the Underwriters and the
Company in accordance with its terms.
Very truly yours,
FIRST SECURITY GROUP, INC.
By: /s/ Xxxxxxx X. Xxxx, Xx.
----------------------------------
Name: Xxxxxxx X. Xxxx, Xx.
-------------------------------
Title: CFO & EVP
------------------------------
CONFIRMED AND ACCEPTED,
as of the date first above written:
XXXXX XXXXXXXX & XXXXX, INC.
By: /s/ Xxxxxxx X. Xxxxx
-----------------------------------
Authorized Signatory
For itself and as Representative of the other
Underwriters named in Schedule A hereto.
Xxxxxxx X. Xxxxx
Managing Director
Xxxxx, Xxxxxxxx & Xxxxx, Inc.
SCHEDULE A
Maximum
Number of
Number of Option
Initial Securities to be
Name of Underwriter Securities Sold
----------------------------- ---------- ----------------
Xxxxx, Xxxxxxxx & Xxxxx, Inc. 2,670,000 400,500
Xxxxxxx Xxxxx . . . . . . . . 1,112,500 166,875
Sterne, Agee & Xxxxx, Inc.. . 667,500 100,125
Xxxxxx Xxxxxx & Company, Inc. 40,000 6,000
Xxxxxxxxxx Securities Inc.. . 10,000 1,500
Total . . . . . . . . . . . 4,500,000 675,000
Sch A - 1
SCHEDULE B
Maximum Number
Number of Initial of Option Securities
Securities to be Sold to Be Sold
--------------------- --------------------
First Security Group, Inc. 4,500,000 675,000
--------------------- --------------------
Total. . . . . . . . . . . 4,500,000 675,000
===================== ====================
Sch B - 1
SCHEDULE C
FIRST SECURITY GROUP, INC.
4,500,000 shares of Common Stock
(Par Value $0.01 Per Share)
1. The public offering price per share for the Securities, determined
as provided in said Section 2, shall be $ .
2. The purchase price per share for the Securities to be paid by the
several Underwriters shall be $9.30, being an amount equal to the public
offering price set forth above less $0.70 per share; provided that the purchase
price per share for any Option Securities purchased upon the exercise of the
over-allotment option described in Section 2(b) shall be reduced by an amount
per share equal to any dividends or distributions declared by the Company and
payable on the Initial Securities but not payable on the Option Securities.
Sch C - 1
SCHEDULE D
List of persons and entities subject to lock-up agreements
1. Xxxxxx X. Xxxxxx
2. Xxxxx X. Xxxxxxxxxx, III
3. X.X. Xxxxxx Xxxxxx
4. Xxxxx X. Xxxxxxx
5. Xxxxx X. Xxxxxxx
6. Xxxxxxx X. Xxxxxxxx
7. D. Xxx Xxxxxx
8. Xxxx X. Xxxxx, III
9. H. Xxxxxxx Xxxx
10. Xxxxxxx X. Xxxx, Xx.
Sch D - 1
SCHEDULE E
Subsidiaries
FSGBank, National Association
Kenesaw Leasing, Inc.
J&S Leasing, Inc.
FSG Reinsurance Company
First Security Intangible Properties, Inc.
First Security Investments, Inc.
First Security Holdings, Inc.
First State Holdings, Inc.
Premier National Services, Inc.
Sch E - 1
Exhibit A
FORM OF OPINION OF COMPANY'S COUNSEL
TO BE DELIVERED PURSUANT TO
SECTION 5(b)
(i) The Company is a registered bank holding company under the Bank
Holding Company Act of 1956, as amended ("BHCA"), and has been duly incorporated
----
and is validly existing as a corporation in good standing under the laws of the
State of Tennessee. The activities of each of the Company's subsidiaries are
permissible for a subsidiary of a bank holding company.
(ii) The Company has the corporate power and authority to own, lease
and operate its properties and to conduct its business as described in the
Prospectus and to enter into and perform its obligations under the Purchase
Agreement.
(iii) The Company is duly qualified or authorized 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 would not result in a Material Adverse Effect.
(iv) The authorized, issued and outstanding capital stock of the
Company is as set forth in the Prospectus in the column entitled "Actual" under
the caption "Capitalization" (except for subsequent issuances, if any, pursuant
to the Purchase Agreement or pursuant to reservations, agreements or employee
benefit plans referred to in the Prospectus or pursuant to the exercise of
convertible securities or options referred to in the Prospectus); the shares of
issued and outstanding capital stock of the Company have been duly authorized
and validly issued and are fully paid and non-assessable; and to our knowledge
after due inquiry, 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.
(v) The Securities to be purchased by the Underwriters from the Company
have been duly authorized for issuance and sale to the Underwriters pursuant to
the Purchase Agreement and, when issued and delivered by the Company pursuant to
the Purchase Agreement against payment of the consideration set forth in the
Purchase Agreement, will be validly issued and fully paid and non-assessable and
no holder of the Securities is or will be subject to personal liability under
the Tennessee Business Corporation Act by reason of being such a holder.
(vi) The issuance and sale of the Securities by the Company is not
subject to the preemptive or other similar rights of any securityholder of the
Company.
(vii) FSGBank, National Association has been duly organized and is
validly existing as a national bank in good standing under the laws of the
jurisdiction of its organization, and each other subsidiary of the Company has
been duly incorporated and,
except for Premier National Services, Inc. ("PNS"), is validly existing as a
---
corporation in good standing under the laws of the jurisdiction of its
incorporation. Each subsidiary of the Company other than PNS has the power
(corporate or otherwise) and authority to own, lease and operate its properties
and to conduct its business as described in the Prospectus and is duly qualified
or authorized 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 would not
result in a Material Adverse Effect; all of the issued and outstanding capital
stock of each subsidiary has been duly authorized and validly issued, is fully
paid and non-assessable (except as otherwise provided in 12 U.S.C. Section 55)
and, to our knowledge, is owned by the Company, directly or through
subsidiaries, free and clear of any security interest, mortgage, pledge, lien,
encumbrance, claim or equity; to our knowledge, none of the outstanding shares
of capital stock of any subsidiary was issued in violation of the preemptive or
similar rights of any securityholder of such subsidiary.
(viii) The Purchase Agreement has been duly authorized, executed and
delivered by the Company and, assuming due authorization, execution and delivery
by the Underwriters, will constitute the valid and binding agreement of the
Company enforceable against the Company in accordance with its terms, except as
may be limited or otherwise affected by (A) bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance or other similar statutes,
rules, regulations or other laws affecting the enforcement of creditors' rights
and remedies generally, and (B) the unavailability of, or limitation on the
availability of, a particular right or remedy (whether in a proceeding in equity
or at law) because of an equitable principle, public policy or a requirement as
to commercial reasonableness, conscionability or good faith.
(ix) The Registration Statement, including any Rule 462(b) Registration
Statement, has been declared effective under the 1933 Act; any required filing
of the Prospectus pursuant to Rule 424(b) has been made in the manner and within
the time period required by Rule 424(b); and, to the best of our knowledge, no
stop order suspending the effectiveness of the Registration Statement or any
Rule 462(b) Registration Statement has been issued under the 1933 Act and no
proceedings for that purpose have been instituted or are pending or threatened
by the Commission.
(x) The Registration Statement, including any Rule 462(b) Registration
Statement and the Rule 430A Information, as applicable, the Prospectus, and each
amendment or supplement to the Registration Statement, Preliminary Prospectus
and Prospectus (other than (a) the financial statements and notes and supporting
schedules included therein or omitted therefrom and (b) the information provided
by the Representative, including the concession and reallowance figures
appearing in the Prospectus in the section entitled "Underwriting" and the
information contained under the captions "Underwriting - Stabilization" and
"Underwriting - Passive Market Making", as to which we need express no opinion),
as of their respective effective or issue dates, complied as to form in all
material respects with the requirements of the 1933 Act.
A - 2
(xi) The form of certificate used to evidence the Common Stock complies
in all material respects with all applicable statutory requirements, with any
applicable requirements of the charter and by-laws of the Company and the
requirements of the Nasdaq National Market.
(xii) To our knowledge, there is not pending or threatened any action,
suit, proceeding, inquiry or investigation, to which the Company or any
subsidiary is a party, or to which the property of the Company or any subsidiary
is subject, before or brought by any court or governmental agency or body,
domestic or foreign, which might reasonably be expected to result in a Material
Adverse Effect, or which might reasonably be expected to materially and
adversely affect the properties or assets thereof considered in the aggregate or
that could adversely affect the consummation of the transactions contemplated in
the Purchase Agreement or the performance by the Company of its obligations
thereunder.
(xiii) The information in the Prospectus under "Risk Factors,"
"Description of Capital Stock" and "Underwriting" and in the Registration
Statement under Item 14, in each instance to the extent that it constitutes
matters of law, summaries of legal matters, the Company's charter and bylaws or
legal proceedings, or legal conclusions, have been reviewed by us and are
accurate and complete in all material respects.
(xiv) To our knowledge, there are no statutes or regulations that are
required to be described in the Prospectus that are not described as required.
(xv) All descriptions in the Registration Statement of contracts and
other documents to which the Company or its subsidiaries are a party are
accurate in all material respects; to our knowledge, there are no franchises,
contracts, indentures, mortgages, loan agreements, notes, leases or other
instruments required to be described or referred to in the Registration
Statement or to be filed as exhibits thereto other than those described or
referred to therein or filed or incorporated by reference as exhibits thereto,
and the descriptions thereof or references thereto are accurate in all material
respects.
(xvi) Except for the administrative dissolution of PNS, neither the
Company nor any subsidiary is in violation of its charter or by-laws, and to our
knowledge, no default by the Company or any subsidiary exists in the due
performance or observance of any obligation, agreement, covenant or condition
contained in any contract, indenture, mortgage, loan agreement, note, lease or
other agreement or instrument that is described or referred to in the
Registration Statement or the Prospectus or filed or incorporated by reference
as an exhibit to the Registration Statement, which would individually or in the
aggregate have a Material Adverse Effect.
(xvii) No filing with, or authorization, approval, consent, license,
order, registration, qualification or decree of, any court or governmental
authority or agency other than under the 1933 Act, which have been obtained (or
as may be required (a) under the rules and regulations of the NASD, (b) by any
foreign governmental entity or of the laws, rules or regulation of any foreign
jurisdiction or (c) under the securities or blue sky laws of the various states,
as to which in each case we need express no opinion)
A - 3
is necessary or required in connection with the due authorization, execution and
delivery of the Purchase Agreement or for the offering, issuance, sale or
delivery of the Securities.
(xviii) The execution, delivery and performance of the Purchase
Agreement and the consummation of the transactions contemplated in the Purchase
Agreement and in the Registration Statement (including the issuance and sale of
the Securities and the use of the proceeds from the sale of the Securities as
described in the Prospectus under the caption "Use Of Proceeds") and compliance
by the Company with its obligations under the Purchase Agreement do not and will
not, whether with or without the giving of notice or lapse of time or both, (a)
to our knowledge, conflict with or constitute a breach of, or default or
Repayment Event (as defined in Section 1(a)(xii) of the Purchase Agreement)
under or result in the creation or imposition of any lien, charge or encumbrance
upon any property or assets of the Company or any subsidiary pursuant to any
contract, indenture, mortgage, deed of trust, loan or credit agreement, note,
lease or any other agreement or instrument, known to us, to which the Company or
any subsidiary is a party or by which it or any of them may be bound, or to
which any of the property or assets of the Company or any subsidiary is subject
(except for such conflicts, breaches or defaults or liens, charges or
encumbrances that would not have a Material Adverse Effect), (b) result in any
violation of the provisions of the charter or by-laws of the Company or any
subsidiary, (c) result in any violation or breach of any applicable law,
statute, rule, regulation, judgment, order, writ or decree, known to us, of any
government, government instrumentality or court, domestic or foreign, having
jurisdiction over the Company or any subsidiary or any of their respective
properties, assets or operations.
(xix) The Company is not and after giving effect to the offering and
sale of the Securities and the use of proceeds, an "investment company" or an
entity "controlled" by an "investment company," as such terms are defined in the
1940 Act.
(xx) To our knowledge, without independent investigation and except as
set forth on Schedule I hereto, neither the Company nor FSGBank (a) is a party
to or subject to any order, decree, agreement, memorandum of understanding or
similar arrangement with, or a commitment letter, supervisory letter or similar
submission to, any governmental entity charged with the supervision or
regulation of depository institutions or engaged in the insurance of deposits
(including the FDIC) or the supervision or regulation of it or any of its
subsidiaries and (b) has been advised by any such governmental entity that such
governmental entity is contemplating issuing or requesting (or is considering
the appropriateness of issuing or requesting) any such order, decree, agreement,
memorandum of understanding, commitment letter, supervisory letter or similar
submission.
(xxi) With respect to the Xxxxxxxx-Xxxxx Act of 2002:
(A) The Company has adopted a Code of Ethics and Code of Conduct for
senior financial officers meeting the requirements of 17 CFR Part 228.406
and an audit committee charter meeting the requirements of Rule
4350(d)(1)(C) of the Nasdaq Marketplace Rules;
A - 4
(B) The Company's Board of Directors has determined that a majority of
its members and all of the members of its compensation and audit committees
are independent under applicable Nasdaq Marketplace Rules, and based solely
on our review of written representations furnished by such directors, to
our knowledge no independent director of the Company has any relationship
prohibited under Rule 4200(a)(15)(A) through (G) of the Nasdaq Marketplace
Rules and no audit committee member has any relationship prohibited under
Rule 4350(d)(2)(a)(1) of the Nasdaq Marketplace Rules;
(C) The Board of Directors has adopted a policy regarding the
nominations process pursuant to Rule 4350(b)(4)(B) of the Nasdaq
Marketplace Rules that provides for the nomination of directors in
accordance with such rules; and
(D) The certifications pursuant to Section 302 and 906 of the
Xxxxxxxx-Xxxxx Act of 2002 contained in the Company's periodic reports
filed with the Securities and Exchange Commission ("SEC") since August 14,
---
2002, complied as to form in all material respects with the requirements of
such Act and the SEC regulations promulgated thereunder; provided, however,
that we do not give any opinion as to the accuracy of the content of such
certifications.
(xxii) To our knowledge, the Company and FSGBank have not received any
communication from any governmental entity asserting that the Company or FSGBank
is not currently in compliance with any statute, law, rule, regulation,
decision, directive or order.
In addition, although we do not assume any responsibility for the
accuracy, completeness or fairness of the statements contained in the
Registration Statement or the Prospectus, except for those referred to in this
opinion in subsections (iv), (xiii), (xiv) and (xv), nothing has come to our
attention that would lead us to believe that the Registration Statement or any
amendment thereto, including the Rule 430A Information (if applicable), (except
for financial statements and schedules and other financial data included or
omitted therefrom, as to which we need make no statement), at the time such
Registration Statement or any such amendment became effective, contained an
untrue statement of a material fact or omitted to state a material fact required
to be stated therein or necessary to make the statements therein not misleading
or that the Prospectus or any amendment or supplement thereto (except for
financial statements and schedules and other financial data included or omitted
therefrom, as to which we need make no statement), at the time the Prospectus
was issued, at the time any such amended or supplemented prospectus was issued
or at the Closing Time, included or includes an untrue statement of a material
fact or omitted or omits to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.
A - 5
In rendering such opinions, such counsel may rely as to matters of
fact (but not as to legal conclusions), to the extent they deem proper, on
certificates of responsible officers of the Company and public officials. Such
opinion shall not state that it is to be governed or qualified by, or that it is
otherwise subject to, any treatise, written policy or other document relating to
legal opinions, including, without limitation, the Legal Opinion Accord of the
ABA Section of Business Law (1991). "Knowledge" shall include the meaning after
due inquiry, except where the context otherwise requires.
A - 6
Exhibit B
________ __, 2005
XXXXX, XXXXXXXX & XXXXX, INC.
as Representative of the several
Underwriters to be named in the
within-mentioned Underwriting Agreement
000 Xxxxxxx Xxxxxx
0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: Proposed Public Offering by First Security Group, Inc.
-------------------------------------------------------------
Dear Sirs:
The undersigned, a shareholder and an executive officer and/or director of
First Security Group, Inc., a Tennessee corporation (the "Company"), understands
-------
that Xxxxx, Xxxxxxxx & Xxxxx, Inc. ("Xxxxx Xxxxxxxx") proposes to enter into an
--------------
Underwriting Agreement (the "Underwriting Agreement") with the Company providing
----------------------
for the public offering of shares (the "Securities") of the Company's common
-----------
stock, par value of $0.01 per share (the "Common Stock"). In recognition of the
------------
benefit that such an offering will confer upon the undersigned as a shareholder
and an executive officer and/or director of the Company, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the undersigned agrees with each underwriter to be named in the
Underwriting Agreement that, during a period of 180 days from the date of the
Underwriting Agreement, the undersigned will not, without the prior written
consent of Xxxxx Xxxxxxxx, directly or indirectly, (i) offer, pledge, sell,
contract to sell, sell any option or contract to purchase, purchase any option
or contract to sell, grant any option, right or warrant for the sale of, or
otherwise dispose of or transfer any shares of the Company's Common Stock or any
securities convertible into or exchangeable or exercisable for Common Stock,
whether now owned or hereafter acquired by the undersigned or with respect to
which the undersigned has or hereafter acquires the power of disposition, or
file any registration statement under the Securities Act of 1933, as amended,
with respect to any of the foregoing or (ii) enter into any swap or any other
agreement or any transaction that transfers, in whole or in part, directly or
indirectly, the economic consequence of ownership of the Common Stock, whether
any such swap or transaction is to be settled by delivery of Common Stock or
other securities, in cash or otherwise. In the event that either (i) during the
period that begins on the date that is 15 calendar days plus three (3) business
days before the last day of the 180-day restricted period and ends on the last
day of the 180-day restricted period, the Company issues an earnings release or
material news or a material event relating to the Company occurs, or (ii) prior
to the expiration of the 180-day restricted period, the Company announces that
it will release earnings results during the 16-day period beginning on the last
day of the 180-day restricted period, the restrictions set forth herein will
continue to apply until the expiration of the date that is 15 calendar days plus
three (3) business days after the date on which the earnings release is issued
or the material news or event related to the Company occurs.
Notwithstanding the foregoing, the undersigned may transfer the
undersigned's shares of Common Stock (i) as a bona fide gift or gifts, provided
that the donee or donees agree to be bound in writing by the restrictions set
forth herein, (ii) to any trust or family limited partnership for the direct or
indirect benefit of the undersigned or the immediate family of the undersigned,
B - 1
provided that the trustee of the trust or general partner of the family limited
partnership, as the case may be, agrees to be bound by the restrictions set
forth herein, and provided further that any such transfer shall not involve a
disposition for value, (iii) pledged in a bona fide transaction outstanding as
of the date hereof to a lender to the undersigned, as disclosed in writing to
the underwriters, (iv) pursuant to the exercise by the undersigned of stock
options that have been granted by the Company prior to, and are outstanding as
of, the date of the Underwriting Agreement, where the Common Stock received upon
any such exercise is held by the undersigned, individually or as fiduciary, in
accordance with the terms of this Lock-Up Agreement or (v) with the prior
written consent of Xxxxx Xxxxxxxx. For purposes of this Lock-Up Agreement,
"immediate family" shall mean any relationship by blood, marriage or adoption,
not more remote than first cousin. The undersigned now has and, except as
contemplated by clauses (i) through (v) above, for the duration of the Lock-Up
Agreement will have good and marketable title to the undersigned's shares of
Common Stock, free and clear of all liens, encumbrances and claims whatsoever,
except with respect to any liens, encumbrances and claims that were in existence
on the date hereof. The undersigned also agrees and consents to the entry of
stop transfer instructions with the Company's transfer agent and registrar
against the transfer of the undersigned's Common Stock, except in compliance
with this Lock-Up Agreement. In furtherance of the foregoing, the Company and
its transfer agent are hereby authorized to decline to make any transfer of
securities if such transfer would constitute a violation or breach of this
Lock-Up Agreement.
The undersigned represents and warrants that the undersigned has full power
and authority to enter into this Lock-Up Agreement. The undersigned agrees that
the provisions of this Lock-Up Agreement shall be binding also upon the
successors, assigns, heirs and personal representatives of the undersigned.
The undersigned understands that, if the Underwriting Agreement does not
become effective, or if the Underwriting Agreement (other than the provisions
thereof which survive termination) shall terminate or be terminated prior to
payment for and delivery of the Common Stock to be sold thereunder, the
undersigned shall be released from all obligations under this Lock-up Agreement.
This Lock-up Agreement shall be governed by and construed in accordance
with the laws of the State of New York.
Very truly yours,
Signature:
------------------------------
Print Name:
----------------------------
B - 2
