EXHIBIT 1.1
1,000,000 Shares
PINNACLE FINANCIAL PARTNERS, INC.
Common Stock(*)
UNDERWRITING AGREEMENT
_______________, 2002
McDonald Investments Inc.
As Representative of the Several Underwriters
c/x XxXxxxxx Investments Inc.
XxXxxxxx Investment Center
000 Xxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000
Dear Sirs:
1. INTRODUCTORY. Under the terms set forth in this
underwriting agreement (the Agreement"), Pinnacle Financial Partners, Inc., a
Tennessee corporation (the "Company"), proposes to issue and sell an aggregate
of 1,000,000 shares of its authorized but unissued common stock, $1.00 par value
(the "Firm Stock"), of the Company's common stock, $1.00 par value (the "Common
Stock"), to the public through the underwriters named in Schedule A annexed
hereto (collectively, the "Underwriters") for whom you are acting as
Representative (the Representative"). The Company also proposes to grant to the
Underwriters the option to purchase up to an additional 150,000 shares of
Company Common Stock (hereinafter referred to as the "Option Stock"). The Firm
Stock and the Option Stock are hereinafter collectively referred to as the
"Stock" and are more fully described in the Registration Statement and the
Prospectus (as hereinafter defined). The Company hereby confirms its several
agreements with you, acting as the Representative of the Underwriters.
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The
Company represents and warrants to each of the Underwriters that:
(a) The Company does not own or control,
directly or indirectly, any corporation, association or other entity other than
those listed in Exhibit 21 to the Registration Statement (as hereinafter
defined). The Company has been duly organized and is validly existing as a
corporation in good standing under the laws of Tennessee with power and
authority to own and lease its properties and conduct its business as described
in the Prospectus (as hereinafter defined). Each of the Company's subsidiaries
has been duly incorporated and is validly existing as a corporation in good
standing under the laws of its respective jurisdiction of incorporation, with
power and authority
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(*) Plus an option to purchase up to 150,000 additional shares to cover
over-allotments.
to own and lease its properties and conduct its respective business. The Company
and each of its subsidiaries are duly qualified to do business as a foreign
corporation and are in good standing in all jurisdictions (i) in which the
conduct of business, as presently being conducted, requires such qualification
(except for those jurisdictions in which the failure to so qualify will not in
the aggregate have a material adverse effect on the Company or such subsidiary)
and (ii) in which the Company or such subsidiary owns or leases real property.
Except as disclosed in the Registration Statement, the Company does not own,
directly or indirectly, any equity securities or securities convertible into or
exchangeable for equity securities of any other corporation, partnership, joint
venture, Massachusetts or other business trust or any other business enterprise.
(b) This Agreement has been duly and validly
authorized, executed and delivered on behalf of the Company and constitutes a
valid and binding obligation of the Company enforceable in accordance with its
terms.
(c) The Company has prepared and filed with the
Securities and Exchange Commission (the "Commission"), in accordance with the
provisions of the Securities Act of 1933, as amended (the "Act"), and the Rules
and Regulations of the Commission thereunder (as hereinafter defined), a
registration statement on Form SB-2 (Registration No. 333-87938) including a
preliminary prospectus relating to the Stock, and such amendments to such
registration statement as may have been required prior to the date hereof have
been similarly prepared and filed with the Commission. The registration
statement as amended at the time when it becomes effective, or, if applicable,
as amended at the time the most recent post-effective amendment to such
registration statement filed with the Commission prior to the execution and
delivery of this Agreement became effective (the "Effective Date"), and
including information (if any) contained in a prospectus subsequently filed with
the Commission pursuant to Rule 424(b) under the Act, and deemed to be part of
the registration statement at the time of effectiveness pursuant to Rule 430A or
Rule 434 under the Act is hereinafter referred to as the "Registration
Statement"; the prospectus in the form first used to confirm sales of Stock,
whether or not filed with the Commission pursuant to Rule 424(b) under the Act,
is hereinafter referred to as the "Prospectus." If an abbreviated registration
statement is prepared and filed with the Commission in accordance with Rule
462(b) under the Act (an "Abbreviated Registration Statement"), the term
"Registration Statement" as used in this Agreement includes the Abbreviated
Registration Statement.
(d) As of the Effective Date, and at all times
subsequent thereto up to and including the respective Closing Dates (as
hereinafter defined) of the offering, the Registration Statement and the
Prospectus, and any amendments thereof or supplements thereto, will contain all
statements of material facts which are required to be stated therein in
accordance with the Act and the applicable rules, regulations and interpretive
releases of the Commission thereunder (the "Rules and Regulations"), and will in
all material respects conform to the requirements of the Act and the Rules and
Regulations; and neither the Registration Statement
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nor the Prospectus, nor any amendment thereof or supplement thereto, will
include any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein
not misleading; provided, however, that the Company makes no representations,
warranties or agreements as to information contained in the Registration
Statement or the Prospectus or any such amendment or supplement thereto in
reliance upon and in conformity with written information furnished to the
Company through you as the Representative specifically for inclusion in the
Registration Statement or Prospectus. For all purposes of this Agreement, the
information set forth in the last paragraph of the cover page and the statements
relating to the terms of the offering by the Underwriters set forth under the
caption "Underwriting" in the Prospectus constitute the only information
relating to any written information furnished by or through the Representative
to the Company specifically for inclusion in the Registration Statement, the
preliminary prospectus or the Prospectus. The Company has not distributed any
offering material in connection with the offering or sale of the Stock other
than the Registration Statement, the preliminary prospectus, the Prospectus or
any other materials, if any, permitted by the Act.
(e) The Company has a duly authorized and
outstanding capitalization as set forth under "Capitalization" in the Prospectus
except for changes due to payments required by debt agreements, or as otherwise
provided in the Prospectus; all of the outstanding shares of Common Stock are
duly authorized and validly issued, fully paid and nonassessable, are free of
any preemptive rights, rights of first refusal or similar rights, were issued
and sold in compliance with the applicable Federal and state securities laws and
conform in all material respects to the description in the Prospectus; except as
described in the Prospectus, there are no outstanding options, warrants or other
rights calling for the issuance of, and there are no commitments, plans or
arrangements to issue any shares of capital stock of the Company or any security
convertible or exchangeable or exercisable for capital stock of the Company.
There are no holders of securities of the Company who, by reason of the filing
of the Registration Statement have the right (and have not waived such right) to
request the Company to include in the Registration Statement securities owned by
them, other than such rights as have been satisfied by the inclusion of
securities in the Registration Statement.
(f) The Common Stock of the Company conforms in
substance to all statements in relation thereto contained in the Registration
Statement and the Prospectus; the Stock to be sold by the Company hereunder has
been duly authorized and, when issued and delivered pursuant to this Agreement,
will be validly issued, fully paid and nonassessable and will conform to the
description thereof contained in the Prospectus. All corporate action required
to be taken for the issuance of the Stock by the Company has been validly and
sufficiently taken. No preemptive rights of security holders of the Company
exist with respect to the issuance and sale of the Stock by the Company pursuant
hereto.
(g) All the issued shares of capital stock of
each subsidiary of the Company have been duly and validly authorized and issued,
are fully paid and non-assessable and are owned by the Company free and clear of
all liens, encumbrances, equities, security interests, or claims; and there are
no outstanding options, warrants or other rights calling for the issuance of,
and there are no commitments, plans, agreements or arrangements to issue, any
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shares of capital stock of any subsidiary or any security convertible or
exchangeable or exercisable for capital stock of any subsidiary; except as
disclosed in the Registration Statement and except for the shares of stock of
each subsidiary owned by the Company, neither the Company nor any subsidiary
owns, directly or indirectly, any shares of capital stock of any corporation or
has any equity interest in any firm, partnership, joint venture, association or
other entity.
(h) Subsequent to the respective dates as of
which information is given in the Registration Statement and the Prospectus,
except as set forth or contemplated in the Prospectus, (i) neither the Company
nor any of its subsidiaries has incurred any material liabilities or
obligations, direct or contingent, nor have any of them entered into any
material transaction, (ii) there has not been and will not have been any change
on a pro forma basis or otherwise in the capital stock or funded debt of the
Company and its subsidiaries which is material or any material adverse change in
the business or the financial position or results of operations of the Company
and its subsidiaries, and (iii) no loss or damage (whether or not insured) to
the property of the Company and its subsidiaries have been sustained which
materially and adversely affects the operations of the Company and its
subsidiaries.
(i) The consummation of the transactions herein
contemplated and the fulfillment of the terms hereof will not result in the
creation or imposition of any lien, charge or encumbrance upon any of the assets
of the Company or its subsidiaries pursuant to the terms or provisions of, or
result in a breach or violation of any of the terms or provisions of, or
constitute a default under, or give any other party a right to terminate any of
its obligations under, or result in the acceleration of any obligation under,
the charter or bylaws of the Company or its subsidiaries, any contract or other
agreement to which the Company or its subsidiaries are a party or by which the
Company or its subsidiaries or any of their respective properties are bound or
affected, or violate or conflict with any judgment, ruling, decree, order,
statute, rule or regulation of any court or other governmental agency or body
applicable to the business or properties of the Company or its subsidiaries.
(j) The financial statements of the Company and
its subsidiaries included in the Registration Statement and the Prospectus
fairly present the financial position and results of operations of the Company
and its subsidiaries at the respective dates and for the respective periods to
which they apply, and such financial statements have been prepared in conformity
with generally accepted accounting principles consistently applied throughout
the periods involved.
(k) KPMG LLP, who have examined and expressed
their opinion on the financial statements of the Company referenced in their
opinions set forth in the Prospectus, are independent accountants within the
meaning of the Act and the Rules and Regulations.
(l) The Company and its subsidiaries hold all
necessary material authorizations, approvals, orders, licenses, certificates and
permits of and from all governmental regulatory officials and bodies
(collectively the "Licenses") required for the conduct of its
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business as described in the Prospectus, and all such Licenses are valid and in
full force and effect, and the Company and its subsidiaries are operating in
compliance in all material respects with the terms and provisions of such
Licenses and with all material laws, regulations, orders and decrees applicable
to the Company and its subsidiaries, and their respective businesses and assets.
(m) Neither the Company nor any of its
subsidiaries is in violation of any applicable Federal, state or local laws,
statutes, rules, regulations or ordinances relating to public health, safety or
the environment, including, without limitation, relating to releases,
discharges, emissions or disposal to air water, land or groundwater, to the
withdrawal or use of groundwater, to the use, handling or disposal of
polychlorinated biphenyls (PCBs), asbestos or urea formaldehyde, to the
treatment, storage, disposal or management of hazardous substances (including,
without limitation, petroleum, crude oil or any fraction thereof, or other
hydrocarbons), pollutants or contaminants, to exposure to toxic, hazardous or
other controlled, prohibited or regulated substances, which violation would have
a material adverse effect on the business, condition (financial or other) or
results of operations of the Company and its subsidiaries, or which might
materially and adversely affect the consummation of the transactions
contemplated by this Agreement. In addition, and irrespective of such
compliance, neither the Company nor any of its subsidiaries is subject to any
liabilities for environmental remediation or clean-up, including any liability
or class of liability of the lessee under the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended, or the Resource
Conservation and Recovery Act of 1976, as amended, which liability would have a
material adverse effect on the business, condition (financial or other) or
results of operations of the Company and its subsidiaries, or which might
materially and adversely affect the consummation of the transactions
contemplated by this Agreement.
(n) There are no legal or governmental actions,
suits or proceedings pending or, to the knowledge of the Company, threatened to
which the Company or any of its subsidiaries, or any of their executive officers
or directors is a party or of which the business or property (including, without
limitation, any of the Licenses referred to in (l) above) of the Company or any
of its subsidiaries or any of the Company's or any of its subsidiaries'
employees is the subject which could have a material adverse effect on the
business, condition (financial or other) or results of operations of the Company
and its subsidiaries, except as set forth in the Prospectus.
(o) Neither the Company nor any of its
subsidiaries is in violation of its charter or bylaws or other organizational
documents, and no default exists by the Company or any of its subsidiaries in
the due performance and observance of any term, covenant or condition of any
agreement material to the Company and its subsidiaries to which the Company or
any of its subsidiaries is a party or by which the Company or any of its
subsidiaries is bound.
(p) The Company and its subsidiaries have good
title to, or valid and enforceable leasehold estates in, all properties and
assets used for their businesses (including the property described in the
Prospectus as being owned or leased by the Company), in each case free and clear
of all liens, encumbrances and defects other than those set forth or referred to
in
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the Registration Statement or Prospectus or those which do not materially affect
the value of such property or leasehold and do not materially interfere with the
use made or proposed to be made of such property or leasehold by the Company and
its subsidiaries; and all of the leases and subleases under which the Company
and its subsidiaries hold such properties are in full force and effect.
(q) No consent, approval, authorization or order
of, or any filing or declaration with, any court or governmental agency or body
is required in connection with the authorization, issuance, transfer, sale or
delivery of the Stock by the Company, in connection with the execution, delivery
and performance of this Agreement by the Company or in connection with the
taking by the Company of any action contemplated hereby, except such as have
been obtained under the Act or the Rules and Regulations and such as may be
required under state securities or Blue Sky laws or the bylaws and rules of the
National Association of Securities Dealers, Inc. (the "NASD") in connection with
the purchase and distribution by the Underwriters of the Stock.
(r) The Common Stock has been registered under
Section 12(g) of the Securities Exchange Act of 1934, as amended, and have been
authorized for trading on the over-the-counter bulletin board (the "OTCBB").
(s) The outstanding debt, the properties and the
business of the Company and its subsidiaries conform in all material respects to
the description thereof contained in the Registration Statement and the
Prospectus.
(t) The Company and its subsidiaries have filed
on a timely basis all necessary Federal, state, local and foreign income and
franchise tax returns required to be filed through the date hereof and have paid
all taxes shown as due thereon; and no tax deficiency has been asserted against
the Company or any of its subsidiaries, nor does the Company know of any tax
deficiency which is likely to be asserted against the Company or any of its
subsidiaries which if determined adversely to the Company or such subsidiary
could materially adversely affect the business, prospects, properties, assets,
results of operations or condition (financial or otherwise) of the Company and
its subsidiaries. All tax liabilities are adequately provided for on the books
of the Company in all material respects.
(u) The Company and each of its subsidiaries
maintain insurance of the types and in the amounts generally deemed adequate for
their businesses and, to the best of the Company's knowledge, consistent with
insurance coverage maintained by similar companies in similar businesses,
including, but not limited to, insurance covering (i) personal injury claims and
(ii) real and personal property owned or leased by the Company and its
subsidiaries against theft, damage, destruction, acts of vandalism and all other
risks customarily insured against, all of which insurance is in full force and
effect.
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(v) To the best of the Company's knowledge, no
labor problem exists with its employees or is threatened or imminent that could
materially adversely affect the Company and its subsidiaries, and the Company is
not aware of any existing, threatened or imminent labor disturbance by the
employees of any of its principal suppliers, contractors or customers that could
be expected to materially adversely affect the business, prospects, properties,
assets, results of operation or condition (financial or other) of the Company
and the subsidiaries. The Company and its subsidiaries are in compliance in all
material respects with all Federal, state and local employment and labor laws,
including, but not limited to, laws relating to non-discrimination in hiring,
promotion and pay of employees.
(w) The Company has obtained the agreement of
each of its executive officers and directors that, for a period of 180 days from
the date of the final prospectus, such persons will not, without the prior
written consent of the Representative, directly or indirectly sell, offer to
sell, grant any option for the sale of, or otherwise dispose of any of the
Company's Common Stock (including, without limitation, shares of Common Stock
which may be deemed to be beneficially owned by such persons in accordance with
the 1934 Act Regulations) or any securities convertible into Common Stock.
(x) Neither the Company nor any of its officers,
directors or affiliates (as defined in the Act and the Rules and Regulations),
has taken or will take, directly or indirectly, any action designed to stabilize
or manipulate, or which has constituted, or might in the future reasonably be
expected to cause or result in, stabilization or manipulation of, the price of
any security of the Company in order to facilitate the sale or resale of the
Stock or otherwise.
(y) The Company maintains a system of internal
accountings control sufficient to provide reasonable assurance that (i)
transactions are executed in accordance with management's general or specific
authorization; (ii) transactions are recorded as necessary to permit preparation
of financial statements in conformity with generally accepted accounting
principles and to maintain accountability for assets; (iii) access to assets is
permitted only in accordance with management's general or specific
authorization; and (iv) the recorded accountability for assets is compared with
existing assets at reasonable intervals and appropriate action is taken with
respect to any differences. Without limiting the foregoing, the Company's system
of internal accounting controls is sufficient to meet the broad objectives of
internal accounting control insofar as those objectives pertain to the
prevention or detection of errors or irregularities in amounts that would be
material in relation to the Company's financial statements; and, to the best of
the Company's knowledge, neither the Company nor any employee or agent of the
Company or any of its subsidiaries has made any payment of funds of the Company
or any of its subsidiaries or received or retained any funds and no funds of the
Company or any of its subsidiaries have been set aside to be used for any
payment in violation of any law, rule or regulation.
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(z) The Company is not an "investment company"
or an "affiliated person" of, or "promoter" or "principal underwriter" for, an
"investment company," as such terms are defined in the Investment Company Act of
1940, as amended.
(aa) All contracts and documents which are
required to be filed as exhibits to the Registration Statement have been so
filed.
(bb) With respect to each employee benefit plan,
program and arrangement (including, without limitation, any "employee benefit
plan" as defined in Section 3(3) of the Employee Retirement Income Security Act
of 1974, as amended ("ERISA")) maintained or contributed to by the Company or
its subsidiaries, or with respect to which the Company or its subsidiaries could
incur any liability under ERISA (collectively, the "Benefit Plans"), no event
has occurred and, to the best knowledge of the Company, there exists no
condition or set of circumstances, in connection with which the Company or its
subsidiaries could be subject to any liability under the terms of such Benefit
Plans, applicable law (including, without limitation, ERISA and the Internal
Revenue Code of 1986, as amended) or any applicable agreement that could
materially adversely affect the business, properties, business prospects,
condition (financial or otherwise) or results of operations of the Company or
its subsidiaries.
3. SALE, PURCHASE AND DELIVERY OF STOCK. (a) On the
basis of the representations and warranties herein contained, but subject to the
terms and conditions herein set forth, the Company hereby agrees to sell to each
Underwriter, and each Underwriter, severally and not jointly, agrees to purchase
from the Company the respective number of shares of the Firm Stock set forth
opposite the Underwriter's name in Schedule A hereto, at a price of $______ per
share.
(b) The Company will deliver the Firm Stock to you for
the respective accounts of the several Underwriters at the office of McDonald
Investments Inc., XxXxxxxx Investment Center, 000 Xxxxxxxx Xxxxxx, Xxxxxxxxx,
Xxxx 00000, at 10:00 A.M., Cleveland time, or to your designee at a specified
place at the same time, against payment of the purchase price at the place of
such Closing by certified or official bank check in next day funds drawn to the
order of the Company on the third full business day after the Effective Date of
the Registration Statement (or, if the Firm Stock is priced after 4:30 p.m.,
Cleveland time on the Effective Date of the Registration Statement, the fourth
full business day after the Effective Date of the Registration Statement), or at
such other time not later than seven full business days after such public
offering as you shall determine, such time and place being herein referred to as
the "Closing Date." The certificates for the Firm Stock so to be delivered will
be in such denominations and registered in such names as you may specify to the
Company at or before 3:00 P.M., Cleveland time, on the second full business day
prior to the Closing Date. Such certificates will be made available for checking
and packaging at least 24 hours prior to the Closing Date. In the alternative,
delivery of the purchase price may be made by wire transfer to
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an account designated by the Company and delivery of the Firm Stock may be made
through the "full fast" system of the Depository Trust Company, in each case
pursuant to the schedule set forth above.
(c) On the basis of the representations and warranties
herein contained, but subject to the terms and conditions herein set forth, the
Company hereby grants an option to the several Underwriters to purchase,
severally and not jointly, up to 150,000 additional shares in the aggregate of
the Option Stock at the purchase price set forth in Section 3(a) hereof, for use
solely in covering any over-allotments made by the Underwriters in the sale and
distribution of the Firm Stock. The option granted hereunder may be exercised at
any time (but not more than once) within 30 days after the Effective Date of the
Registration Statement, upon written or telegraphic notice by the Representative
to the Company setting forth the aggregate number of shares of the Option Stock
as to which the Underwriters are exercising the option and the time and place at
which certificates will be delivered, such time (which, unless otherwise
determined by you and the Company, shall not be earlier than three nor later
than seven full business days after the exercise of said option) being herein
called the "Second Closing Date." The number of shares of the Option Stock to be
sold by the Company to each Underwriter and purchased by such Underwriter from
the Company shall be the same percentage of the total number of shares of the
Option Stock to be purchased by the several Underwriters on the Second Closing
Date as such Underwriter purchased of the total number of shares of the Firm
Stock, as adjusted by the Representative to avoid fractions and to reflect any
adjustment required by Section 11 hereof. The Company will deliver certificates
for the shares of the Option Stock being purchased by the several Underwriters
to you on the Second Closing Date at the place and time of such Closing, or to
your designee at a specified place at the same time, against payment of the
purchase price at the place of such Closing, by certified or official bank
checks in next day funds drawn to the order of the Company. The certificates for
the Option Stock so to be delivered will be in such denominations and registered
in such names as you may specify to the Company at or before 3:00 P.M.,
Cleveland time, on the second full business day prior to the Second Closing
Date. Such certificates will be made available for checking and packaging at
least 24 hours prior to the Second Closing Date. In the alternative, delivery of
the purchase price may be made by wire transfer to an account designated by the
Company and delivery of the Option Stock may be made through the "full fast"
system of the Depository Trust Company, in each case pursuant to the schedule
set forth above. The option granted hereby may be cancelled by you as the
Representative of the several Underwriters, as to the shares of the Option Stock
for which the option is unexercised, at any time prior to the expiration of the
30-day period, upon notice to the Company.
(d) The cost of original issue tax stamps, if any, in
connection with the issuance and delivery of the Firm Stock and Option Stock by
the Company to the respective Underwriters shall be borne by the Company. The
Company will pay and save each Underwriter and any subsequent holder of the
Stock harmless from any and all liabilities with respect to or resulting from
any failure or delay in paying Federal and state stamp and other transfer taxes,
if any, which may be payable or determined to be payable in connection with the
original issuance or sale to such Underwriter of the Firm Stock and Option
Stock.
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4. OFFERING BY UNDERWRITERS. Subject to the terms and conditions
hereof, the several Underwriters agree that (i) they will offer the Stock to the
public as set forth in the Prospectus as soon after the Registration Statement
becomes effective as may be practicable, but in no event later than 5:00 p.m.,
Cleveland time, on the 15th business day subsequent to the Effective Date of the
Registration Statement, and (ii) they will offer and sell the Stock to the
public only in those jurisdictions, and in such amounts, where due qualification
and/or registration has been effected or an exemption from such qualification
and/or registration is available under the applicable securities or Blue Sky
laws of such jurisdiction; it being understood, however, that such agreement
only covers the initial sale of the Stock by the Underwriters and not any
subsequent sale of such Stock in any trading market which may develop after the
public offering.
5. COVENANTS OF THE COMPANY. The Company covenants and agrees
with each of the Underwriters that:
(a) The Company will make every reasonable effort to
cause the Registration Statement to become effective and will advise you when it
is effective under the Act. The Company will not file any amendment to the
Registration Statement, or supplement to the Prospectus, unless a copy thereof
is first submitted to you within a reasonable period of time prior to the filing
thereof and you have no reasonable objection to such amendment or supplement.
(b) The Company will advise you promptly of any request
of the Commission for amendment of the Registration Statement or Prospectus or
for additional information and of the issuance by the Commission of any stop
order suspending the effectiveness of the Registration Statement or of the
institution of any proceedings for that purpose of which it has knowledge, and
the Company will make every reasonable effort to prevent the issuance of any
such stop order and to obtain as soon as possible the lifting thereof, if
issued.
(c) The Company will comply, to the best of its ability,
with the Act so as to permit the continuance of sales of and dealings in the
Stock under the Act for such period as may be required by the Act; whenever it
is necessary to amend or supplement the Prospectus to make the statements
therein not misleading, furnish, without charge to you as the Representative,
either amendments to the Prospectus or supplemental information, so that the
statements in the Prospectus as so amended or supplemented will not be
misleading; and file a post-effective amendment to the Registration Statement
whenever such an amendment may be required and furnish, without charge to you, a
reasonable number of copies of any such amendment and related Prospectus.
(d) Not later than the 45th day following the end of the
fiscal quarter first occurring after the first anniversary of the Effective
Date, the Company will make generally available to its security holders and
deliver to you an earnings statement (which need not be audited) covering a
period of at least 12 months beginning not earlier than the Effective Date
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which shall satisfy the provisions of Section 11(a) of the Act and/or Rule 158
promulgated under the Act.
(e) The Company will furnish to you copies of the
Registration Statement (two of which will be signed and will include all
exhibits thereto), each preliminary prospectus, the Prospectus, all amendments
of and supplements to such documents, and all correspondence between the
Commission and the Company or its counsel or accountants relating thereto, in
each case as soon as available and in such quantities as you may reasonably
request.
(f) For a period of three years from the date of the
Prospectus, the Company will deliver to you (i) within 90 days after the end of
each fiscal year, consolidated balance sheets, statements of income, statements
of cash flow and statements of changes in stockholders' equity of the Company
and its consolidated subsidiaries, if any, as at the end of and for such year
and the last preceding year, all in reasonable detail and certified by
independent accountants, (ii) within 45 days after the end of each of the first
three quarterly periods in each fiscal year, unaudited consolidated balance
sheets and statements of income, statements of cash flow and statements of
changes in stockholders' equity of the Company and its consolidated
subsidiaries, if any, as at the end of and for such period, all in reasonable
detail, (iii) as soon as available, all such proxy statements, financial
statements and reports as the Company shall send or make available to its
stockholders or the stockholders of any subsidiary any of whose stock is owned
by any person other than the Company or any subsidiary, and (iv) copies of all
annual or periodic reports as the Company or any subsidiary shall file with the
Commission as required by the Act, the Exchange Act and any rules or regulations
thereunder, which are available for public inspection at the Commission, or any
material reports filed in connection with the Company's listing on any stock
exchange.
(g) The Company will apply the net proceeds from the sale
of the Stock sold by it in the manner set forth in the Prospectus, and will
comply with any reporting obligations as may be required by Rule 463 under the
Act.
(h) If, at the time that the Registration Statement
becomes effective, any information shall have been omitted therefrom in reliance
upon Rule 430A promulgated under the Act, then immediately following the
execution of this Agreement, the Company will prepare, and file or transmit for
filing with the Commission in accordance with Rule 430A and Rule 424(b)
promulgated under the Act, copies of an amended Prospectus or, if required by
such Rule 430A, a post-effective amendment (including an amended Prospectus),
containing all information so omitted.
(i) The Company will file with the NASD all documents and
notices required of companies that have issued securities that are traded on the
OTCBB.
(j) The Company will cooperate with you and your counsel
to qualify the Stock for sale under the securities or Blue Sky laws of such
jurisdictions within the United States as you designate, including furnishing
such information and executing such instruments as may be required, and will
continue such qualifications in effect for a period of at least three
-11-
months from the date hereof; provided, however, the Company shall not be
required to register or qualify as a foreign corporation or as a dealer in
securities nor, except as to matters and transactions relating to the offer and
sale of the Stock, consent to a service of process in any jurisdiction.
(k) For a period of 180 days from the time of the public
offering of the Stock by the Underwriters, the Company will not, except with
your prior written consent, directly or indirectly, sell, offer to sell, grant
any option for the sale of, or otherwise dispose of, any Common Stock or
securities convertible into Common Stock for cash, except pursuant to the
exercise of any outstanding stock options of the Company that are described in
the Prospectus or to employee benefit plans of the Company or its subsidiaries,
provided, that the Company will not grant options to purchase shares of Common
Stock under any employee benefit plan at a price less than the public offering
price.
(l) The Company and its subsidiaries will remain in
compliance with the financial record-keeping requirements and internal
accounting control requirements of Section 13(b)(2) of the Exchange Act.
(m) The Company, during the period when the Prospectus is
required to be delivered under the Act, will file all documents required to be
filed with the Commission pursuant to Sections 13, 14 or 15 of the Exchange Act
within the time periods required by the Exchange Act and the rules and
regulations promulgated thereunder.
6. PAYMENT OF EXPENSES. The Company will pay or cause to be paid
all costs and expenses incident to the performance of the obligations of the
Company hereunder, including, but not limited to: (a) the reasonable fees and
disbursements of its counsel; (b) the reasonable fees, costs and expenses of
preparing, printing and delivering the certificates for the Stock; (c) the
reasonable fees, costs and expenses of the transfer agent and registrar for the
Common Stock; (d) the reasonable fees and disbursements of its accountants; (e)
the filing fees and reasonable expenses incurred in connection with the
qualification, registration or exemption of the Stock under state securities or
Blue Sky laws and the reasonable fees and disbursements of counsel for the
Underwriters in connection with such qualification, registration or exemption
and the preparation and printing of the preliminary and final Blue Sky Surveys;
(f) the filing fees and reasonable expenses paid and incurred by the
Underwriters, including reasonable fees and disbursements of counsel for
Underwriters, in connection with the review of the terms of the underwriting
arrangements by the NASD; (g) the costs and expenses in connection with the
preparation, printing and filing of the Registration Statement (including
exhibits thereto) and the Prospectus and the furnishing to the Underwriters of
such copies of each preliminary and final Prospectus as the Underwriters may
reasonably require; and (h) the costs and expenses in connection with the
printing of this Agreement, the Agreement Among Underwriters, the Selected
Dealers Agreement and other documents distributed to the Underwriters.
7. CONDITIONS OF THE OBLIGATION OF THE UNDERWRITERS. The
obligations of the several Underwriters to purchase and pay for the Firm Stock
on the Closing Date and the Option Stock on the Second Closing Date shall be
subject to the condition that the representations and warranties made by the
Company herein are true and correct as of the date hereof and as of the
respective Closing Dates, to the condition that the
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written statements of Company officers made pursuant to the provisions hereof
are true and correct, and to the performance by the Company of their obligations
hereunder and to the following additional conditions:
(a) The Registration Statement shall have become
effective not later than 5:00 P.M., Cleveland time, on the date of this
Agreement, or at such later time as shall have been consented to by you in
writing, and prior to each Closing Date no stop order suspending the
effectiveness of the Registration Statement shall have been issued and no
proceedings for that purpose shall have been instituted or shall be pending, or
to the knowledge of the Company or you, shall be contemplated by the Commission.
(b) You shall not have advised the Company that the
Registration Statement or Prospectus or any amendment thereof or supplement
thereto contains an untrue statement of fact which, in the reasonable opinion of
Powell, Goldstein, Xxxxxx & Xxxxxx LLP, counsel for the Underwriters, is
material, or omits to state a fact which, in the opinion of such counsel, is
material and is required to be stated therein or is necessary to make the
statements therein not misleading.
(c) You shall have received as of each Closing Date (or
prior thereto as indicated) the following:
(i) An opinion of Bass, Xxxxx & Xxxx PLC, dated
the respective Closing Dates, to the effect that:
(aa) The Company has been duly organized
and is validly existing as a corporation in good standing under the laws of
Tennessee with corporate power and authority to own its properties and conduct
its business as described in the Prospectus. Each of the Company's subsidiaries
has been duly incorporated and is validly existing as a corporation or other
legal entity in good standing under the laws of its respective jurisdiction of
incorporation or organization, with power and authority to own and lease its
properties and conduct its respective business. The Company and each of its
subsidiaries are duly qualified to do business as a foreign corporation and are
in good standing in all jurisdictions (i) in which the conduct of business, as
presently being conducted requires such qualification (except for those
jurisdictions in which the failure to so qualify will not, in the aggregate,
have a material adverse effect on the Company and its subsidiaries) and (ii) in
which the Company or such subsidiary owns or leases real property.
(bb) The authorized capital stock of the
Company is as set forth under "Capitalization" in the Prospectus; all issued and
outstanding shares of Common Stock of the Company have been duly authorized and
validly issued, are free of preemptive rights of stockholders, rights of first
refusal or similar rights and are fully paid and nonassessable. Except as
described in the Prospectus, there are no outstanding options, warrants or other
rights calling for the issuance of, and there are no commitments, plans or
arrangements
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to issue any shares of capital stock of the Company or any security convertible
or exchangeable or exercisable for capital stock of the Company. There are no
holders of securities of the Company who, by reason of the filing of the
Registration Statement have the right (and have not waived such right) to
request the Company to include in the Registration Statement securities owned by
them, other than such rights as have been satisfied by the inclusion of
securities in the Registration Statement.
(cc) The shares of Common Stock of the
Company to be issued and sold by the Company hereunder have been duly
authorized, and, when issued, delivered and paid for pursuant to this Agreement,
will be validly issued, fully paid and nonassessable. No preemptive rights of
security holders of the Company exist with respect to the issuance and sale of
the stock by the Company pursuant to this Agreement. The Common Stock of the
Company conforms to the description thereof contained in the Prospectus and the
certificates for the Common Stock of the Company (including the Stock) are in
due and legal form under Tennessee law.
(dd) The Company has the corporate power
and authority to enter into and perform this Agreement, and to issue and deliver
the Stock as provided herein. The execution, delivery and performance of this
Agreement by the Company has been duly authorized by all necessary action of the
Company. This Agreement constitutes the legal, valid and binding obligation of
the Company, enforceable in accordance with its terms, except as rights to
indemnity may be limited by public policy and applicable federal or state
securities laws and except as enforcement thereof may be limited by bankruptcy,
insolvency or other laws of general application affecting the enforcement of
creditors' rights or by limitations upon the availability of certain remedies
that may be precluded by general principles of equity.
(ee) All the issued shares of capital
stock of each subsidiary of the Company have been duly and validly authorized
and issued, are fully paid and non-assessable and are owned by the Company free
and clear of all liens, encumbrances, equities, security interests, or claim;
and there are no outstanding options, warrants or other rights calling for the
issuance of, and, to such counsel's knowledge, there are no commitments, plans
or arrangements to issue, any shares of capital stock of any subsidiary or any
security convertible or exchangeable or exercisable for capital stock of any
subsidiary; except as disclosed in the Registration Statement and except for the
shares of stock of each subsidiary owned by the Company, neither the Company nor
any subsidiary owns, directly or indirectly, any shares of capital stock of any
corporation or has any equity interest in any firm, partnership, joint venture,
association or other entity.
(ff) The Registration Statement has
become effective under the Act and, to the best of the knowledge of such
counsel, no stop order suspending the effectiveness of the Registration
Statement has been issued and no proceedings for that purpose have been
instituted or are pending or contemplated under the Act. The Registration
Statement and the Prospectus, and each amendment thereof or supplement thereto
(except for the financial statements and schedules included therein as to which
such counsel need express no opinion) comply as to form in all material respects
with the requirements of the Act and the Rules and
-14-
Regulations; the descriptions in the Registration Statement and the Prospectus
of the Common Stock, statutes, regulations, leases, employee benefit plans,
contracts and other documents are materially accurate and fairly present the
information required to be shown; and such counsel does not know of any legal or
governmental proceedings which are required by the Act and the Rules and
Regulations to be described in the Prospectus and which are not described as so
required, or of any leases, contracts or other documents of a character which
are required by the Act and the Rules and Regulations to be described in the
Registration Statement or the Prospectus or to be filed as exhibits to the
Registration Statement and which are not described and/or filed as so required.
(gg) The consummation of the
transactions herein contemplated and the fulfillment of the terms hereof will
not result in a breach of any of the terms and provisions of, or constitute a
default under, any indenture, mortgage, deed of trust or other agreement or
instrument to which the Company or any of its subsidiaries is a party and of
which such counsel has knowledge after reasonable investigation, or the charter
or bylaws of the Company, or the organizational documents of any of its
subsidiaries, or, to the knowledge of such counsel, any order, rule or
regulation applicable to the Company or any of its subsidiaries of any court or
of any federal or state regulatory body or administrative agency or other
governmental body having jurisdiction over the Company or any of its
subsidiaries or the properties of any of them, except as may be required under
the securities or Blue Sky laws of any jurisdiction, as to which such counsel
need not express an opinion, and for such breaches or defaults as will not have
a material adverse effect on the consummation of the transactions herein
contemplated and the fulfillment of the terms hereof by the Company.
(hh) All approvals, consents and orders
of all governmental bodies required in connection with the valid authorization,
issuance and sale of the Stock as contemplated by this Agreement have been
obtained, except such as may be required under the securities or Blue Sky laws
of any jurisdiction as to which such counsel need not express an opinion.
(ii) To such counsel's knowledge,
neither the Company nor any of its subsidiaries is in violation of its charter
or bylaws or other organizational documents, and no default exists by the
Company or any of its subsidiaries in the due performance and observance of any
term, covenant or condition of any agreement material to the Company and its
subsidiaries to which the Company or any of its subsidiaries is a party or by
which the Company or any of its subsidiaries is bound.
(jj) The Company is not an "investment
company" or an "affiliated person" of, or "promoter" or "principal underwriter"
for, an "investment company," as such terms are defined in the Investment
Company Act of 1940, as amended.
(kk) To such counsel's knowledge, the
Company and its subsidiaries hold and are in compliance with all necessary
Licenses required for the conduct of its business as described in the
Prospectus, except where the failure to so hold or comply with any License would
not have, individually or in the aggregate, a material adverse effect on the
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business, condition (financial or other) or results of operations of the Company
and its subsidiaries, taken as a whole.
(ll) Except as set forth in the
Prospectus, such counsel does not know of any past, pending or threatened
action, suit, proceeding, inquiry or investigation before any court or before or
by any public, regulatory or governmental body or board against or involving the
business or property of the Company or any of its subsidiaries which, if
successful, could have a material adverse effect on the business, condition
(financial or other) or results of operations of the Company and its
subsidiaries, taken as a whole.
(mm) No facts have come to the attention
of such counsel which would lead such counsel to believe that either the
Registration Statement at the time it became effective and at the Closing Date
or the Second Closing Date, as the case may be, contained an untrue statement of
a material fact or omitted to state any material fact required to be stated
therein or necessary to make the statements therein not misleading or that the
Prospectus as of the date thereof and as of the Closing Date or the Second
Closing Date, as the case may be, contained an untrue statement of a material
fact or omitted to state any material fact necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading (it being understood that such counsel need express no belief or
opinion with respect to the financial statements and schedules and other
financial data included therein).
In rendering such opinion, such counsel may rely (A) as to matters
involving the application of laws other than the laws of the United States and
jurisdictions in which they are admitted, to the extent specified in such
opinion, if at all, upon an opinion or opinions of other counsel, familiar with
the applicable laws; and (B) as to matters of fact on certificates of officers
of the Company and certificates or other written statements of officers of
departments of various jurisdictions having custody of documents respecting the
corporate existence or good standing of the Company and its subsidiaries. The
opinion of such counsel for the Company shall state that the opinion of any such
other counsel is in form satisfactory to such counsel and, in their opinion, you
and they are justified in relying thereon.
(iii) Such opinion or opinions of Powell,
Goldstein, Xxxxxx & Xxxxxx LLP, counsel for the Underwriters, dated the
respective Closing Dates, with respect to the sufficiency of all corporate
proceedings and other legal matters relating to this Agreement, the validity of
the Stock, the Registration Statement, the Prospectus, and other related matters
as you may reasonably request, and the Company shall have furnished to such
counsel such documents as they may request for the purpose of enabling them to
pass upon such matters. In connection with such opinions, such counsel may rely
on representations or certificates of officers of the Company.
(iv) A certificate of the Company executed by the
principal executive officer and the principal financial and accounting officer
of the Company, dated each respective Closing Date, to the effect that:
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(aa) The representations and warranties
of the Company in Section 2 of this Agreement are true and correct as of each
respective Closing Date, each of the covenants required herein to be performed
by the Company on or prior to each respective Closing Date has been duly,
timely, and fully performed and the Company has complied with all the agreements
and satisfied all the conditions on its part to be performed or satisfied at or
prior to each respective Closing Date.
(bb) No stop order suspending the
effectiveness of the Registration Statement has been issued and no proceedings
for that purpose have been instituted or are pending or, to the knowledge of the
respective signers of the certificate, are contemplated under the Act.
(cc) The signers of the certificate have
carefully examined the Registration Statement and the Prospectus; no facts have
come to their attention which would lead them to believe that either the
Registration Statement at the time it became effective (or any amendment thereof
or supplement thereto made prior to the Closing Date or the Second Closing Date,
as the case may be, as of the date of such amendment or supplement) contained an
untrue statement of a material fact or omitted to state any material fact
required to be stated therein or necessary to make the statements therein not
misleading or that the Prospectus as of the date thereof (or any amendment
thereof or supplement thereto made prior to the Closing Date or the Second
Closing Date, as the case may be, as of the date of such amendment or
supplement) contained an untrue statement of a material fact or omitted to state
any material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading; since the latest respective dates as of which information is
given in the Registration Statement, there has been no material adverse change
in the general affairs, financial position, business or results of operations of
the Company and its subsidiaries, except as set forth in or contemplated by the
Prospectus; and since the Effective Date of the Registration Statement there has
occurred no event required to be set forth in an amended or supplemented
Prospectus which has not been set forth.
(v) Letters from KPMG LLP dated respectively the
date of this Agreement and each respective Closing Date, addressed to you and in
form and substance previously approved by you, with respect to the financial
statements and certain financial information contained in the Registration
Statement and the Prospectus.
(d) Prior to the Closing Date, the Company shall have
furnished to you such further certificates and documents as you may reasonably
request.
(e) The National Association of Securities Dealers, Inc.
shall have approved the underwriting terms and arrangements and such approval
shall not have been withdrawn or limited.
(f) Prior to each Closing Date no stop orders suspending
the qualification of the Stock under the securities or Blue Sky laws of the
states in which the Stock
-17-
is to be offered and sold shall have been issued and no proceedings for that
purpose shall have been instituted or shall be pending, or to the knowledge of
the Company or you, shall be contemplated by the applicable state securities
administrators.
If any condition of the Underwriters' obligations hereunder to
be satisfied prior to any Closing Date is not so satisfied, this Agreement may
be terminated by you prior to such Closing Date, by notice in writing or by
telegram confirmed in writing to the Company.
All such opinions, certificates, letters and documents
furnished to you pursuant to this Section 7 will be in compliance with the
provisions hereof only if they are in all material respects satisfactory to you
and to Powell, Goldstein, Xxxxxx & Xxxxxx LLP, counsel for the Underwriters, as
to which both you and such counsel shall act reasonably. The Company will
furnish you with such executed and conformed copies of such opinions,
certificates, letters and documents as you may request.
You, on behalf of the Underwriters, may waive in writing the
compliance by the Company of any one or more of the foregoing conditions or
extend the time for their performance.
8. REPRESENTATIONS OF THE UNDERWRITERS. Each of the
Underwriters severally represents and warrants to the Company that the
information furnished to the Company in writing by such Underwriters or by you
expressly for use in the preparation of the Registration Statement or the
Prospectus does not, and any amendments thereof or supplements thereto thus
furnished will not, contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading. Through you, each Underwriter has only
furnished to the Company expressly for such use, the statements made in the last
paragraph of the cover page of the Prospectus and the statements relating to the
terms of the offering by the several Underwriters set forth under the caption
"Underwriting" in the Prospectus.
9. TERMINATION OF AGREEMENT. This Agreement shall become
effective: (a) upon the execution and delivery hereof by the parties hereto; or
(b) if, at the time this Agreement is executed and delivered, it is necessary
for the Registration Statement or a post-effective amendment thereto to be
declared effective before the offering of the Stock may commence, when
notification of the effectiveness of the Registration Statement or such
post-effective amendment has been released by the Commission. At any time before
the happening of such occurrence, the Company may, by notice to you, terminate
this Agreement; and at any time prior to such time, you, as the Representative
of the several Underwriters, may, by notice to the Company, terminate this
Agreement.
This Agreement may also be terminated by you, as the
Representative of the several Underwriters, by notice to the Company on or after
the Effective Date of the Registration Statement and prior to each respective
Closing Date, if at any time during such period any of the following has
occurred: (i) except as disclosed in or contemplated by the Registration
Statement, since the respective dates as of which information is given in the
Registration Statement and the
-18-
Prospectus, any material adverse change or any development involving a
prospective material adverse change in or affecting the condition, financial or
otherwise, of the Company and its subsidiaries taken as a whole or the earnings,
business affairs, management or business prospects of the Company and its
subsidiaries taken as a whole, whether or not arising in the ordinary course of
business; (ii) any outbreak of hostilities or escalation in existing hostilities
anywhere in the world or other national or international calamity or crisis or
change in economic or political conditions, if the effect of such outbreak,
escalation, calamity, crisis or change on the financial markets in the United
States would, in your reasonable judgment, make it impracticable to offer for
sale or to enforce contracts made by the Underwriters for the resale of the
Stock agreed to be purchased hereunder; (iii) any general suspension of trading
in securities on the New York Stock Exchange or the American Stock Exchange or
the Nasdaq Stock Market or any general limitation on prices for such trading or
any general restrictions on the distribution of securities, all to such a degree
as would in your reasonable judgment materially adversely affect the market for
the Stock; or (iv) a banking moratorium shall have been declared by either
Federal, Tennessee or New York State authorities.
This Agreement may also be terminated as provided in Sections
7 and 11 hereof.
If this Agreement shall be terminated by you because of any
failure on the part of the Company to comply with any of the terms or to fulfill
any of the conditions of this Agreement, or if for any reason the Company shall
be unable to perform its obligations under this Agreement, the Company shall
pay, in addition to the costs and expenses referred to in Section 6, all
reasonable out-of-pocket expenses incurred by the Underwriters in contemplation
of the performance by them of their obligations hereunder, including but not
limited to the reasonable fees and disbursements of counsel for the
Underwriters, the Underwriters' reasonable printing and traveling expenses and
postage, telegraph and telephone charges relating directly to the offering
contemplated by the Prospectus, and also including reasonable advertising
expenses of the Representative incurred after the Effective Date of the
Registration Statement and so relating, it being understood that such
out-of-pocket expenses shall not include any compensation, salaries or wages of
the officers, partners or employees of any of the Underwriters. Only such
out-of-pocket expenses as shall be accounted for by the Underwriters shall be
paid to the Underwriters by the Company.
The Company shall not in any event be liable to the several
Underwriters for damages on account of loss of anticipated profits arising out
of the transactions contemplated by this Agreement.
10. INDEMNIFICATION. (a) The Company will indemnify and
hold harmless each Underwriter, and each person, if any, who controls each
Underwriter within the meaning of the Act, against any losses, claims, damages
or liabilities, joint or several, to which such Underwriter or such controlling
person may become subject, under the Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon any untrue statement or alleged untrue statement of any material
fact contained in the Registration Statement, any related preliminary prospectus
(if used prior to the Effective Date), the Prospectus or any amendment thereof
or supplement thereto, or arise out of or are
-19-
based upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, and, subject to the provisions of Section 10(c), will reimburse each
Underwriter and each such controlling person for any legal or other expenses
reasonably incurred by such Underwriter or such controlling person in connection
with investigating or defending any such loss, claim, damage, liability or
action; provided, however, that the indemnity agreement contained in this
Section 10(a) with respect to any preliminary prospectus shall not inure to the
benefit of any Underwriter or to the benefit of any person controlling such
Underwriter in respect of any loss, claim, damage, liability or action asserted
by a person who purchases shares of the Stock from such Underwriter, if such
Underwriter failed to send or give a copy of the Prospectus (as the same may
then be amended or supplemented) to such person with or prior to written
confirmation of the sale to such person; and provided, further, that the Company
will not be liable in any such case to the extent that any such loss, claim,
damage or liability arises out of or is based upon any untrue statement or
omission or alleged omission made in the Registration Statement, any preliminary
prospectus, the Prospectus or any amendment thereof or supplement thereto in
reliance upon or in conformity with written information furnished to the Company
by an Underwriter specifically for use in the preparation thereof, as referred
to in the last sentence of Section 8 hereof. This indemnity agreement will be in
addition to any liability which the Company may otherwise have.
(b) Each Underwriter will indemnify and hold harmless the
Company, each person, if any, who controls the Company within the meaning of the
Act, each of its directors, and each of its officers who have signed the
Registration Statement against any losses, claims, damages or liabilities to
which the Company, or any such director or officer may become subject, under the
Act or otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon any untrue statement
or alleged untrue statement of any material fact contained in the Registration
Statement, any preliminary prospectus, the Prospectus, or any amendment thereof
or supplement thereto, or arise out of or are based upon the omission or the
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in the Registration
Statement, any preliminary prospectus, the Prospectus or any amendment thereof
or supplement thereto in reliance upon or in conformity with written information
furnished to the Company by such Underwriter through you, as the Representative
of the Underwriters, specifically for use in the preparation thereof, as
referred to in the last sentence of Section 8 of this Agreement; and will
reimburse the Company and each such director or officer for any legal or other
expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage, liability or action. This indemnity
agreement will be in addition to any liability which the Underwriters may
otherwise have.
(c) Promptly after receipt by an indemnified party under
this Section of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against an indemnifying party
under this Section, notify each party against whom indemnification is to be
sought in writing of the commencement thereof; but the omission so to
-20-
notify an indemnifying party will not relieve it from any liability which they
may have to any indemnified party otherwise than under this Section. In case any
such action is brought against any indemnified party, and it notifies the
indemnifying party of the commencement thereof, the indemnifying party will be
entitled to participate in, and to the extent that it may wish, to assume the
defense thereof, with counsel approved by such indemnified party (which approval
shall not be unreasonably withheld), and after notice from the indemnifying
party to such indemnified party of its election so to assume the defense
thereof, the indemnifying party will not be liable to such indemnified party
under this Section for any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof except as provided
below and except for the reasonable costs of investigation subsequently incurred
by such indemnified party in connection with the defense thereof. The
indemnified party shall have the right to employ its counsel in any such action,
but the fees and expenses of such counsel shall be at the expense of such
indemnified party unless (i) the employment of counsel by such indemnified party
has been authorized in writing by the indemnifying party, (ii) the named parties
to any such action include both the indemnifying party and the indemnified
party, and the indemnified party shall have reasonably concluded that there is
an actual or potential conflict of interest between the indemnifying party and
the indemnified party in the conduct of the defense of such action (in which
case the indemnifying party shall not have the right to direct the defense of
such action on behalf of the indemnified party) or (iii) the indemnifying party
shall not have employed counsel to assume the defense of such action within a
reasonable time after notice of the commencement thereof, in each of which cases
the fees and expenses of counsel shall be at the expense of the indemnifying
party. In no event shall the indemnifying party be liable for the fees and
expenses of more than one counsel for all indemnified parties in connection with
any one or separate but similar or related actions in the same jurisdiction
arising out of the same allegations or circumstances. Anything in this Section
to the contrary notwithstanding, an indemnifying party shall not be liable for
any settlement of any claim or action effected without its written consent.
(d) In order to provide for contribution in circumstances
in which the indemnification provided for in this Section is for any reason held
to be unavailable from the Company or the Underwriters or is insufficient to
hold harmless a party indemnified hereunder, the Company and the Underwriters
shall contribute to the aggregate losses, claims, damages, liabilities and
expenses of the nature contemplated by such indemnification provisions
(including any investigation, legal and other expenses incurred in connection
with, and any amount paid in settlement of, any action, suit or proceeding or
any claims asserted, but after deducting in the case of losses, claims, damages,
liabilities and expenses suffered by the Company, any contribution received by
the Company from persons, other than the Underwriters, who may also be liable
for contribution, including persons who control the Company within the meaning
of the Act, officers of the Company who signed the Registration Statement and
directors of the Company) to which the Company and one or more of the
Underwriters may be subject, in such proportions as is appropriate to reflect
the relative benefits received by the Company and the Underwriters from the
offering of the Stock or, if such allocation is not permitted by applicable law
or indemnification is not available as a result of the indemnifying party not
having received notice as provided in this Section, in such proportion as is
appropriate to reflect not only the relative benefits referred to above but also
the relative fault of the Company and the Underwriters in connection with the
statements or omissions which resulted in such losses,
-21-
claims, damages, liabilities or expenses, as well as any other relevant
equitable considerations. The relative benefits received by the Company and the
Underwriters shall be deemed to be in the same proportion as (i) the total
proceeds from the offering (net of underwriting discounts and commissions but
before deducting expenses) received by the Company and (ii) the underwriting
discounts and commissions received by the Underwriters, respectively, in each
case as set forth in the table on the cover page of the Prospectus. The relative
fault of the Company and of the Underwriters shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement of a
material fact or the omissions or alleged omission to state a material fact
relates to information supplied by the Company or 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 10(d) were determined by pro rata allocation (even if the Underwriters
were treated as one entity for such purpose) or by any other method of
allocation which does not take account of the equitable considerations referred
to above. Notwithstanding the provisions of this Section 10(d), (x) in no case
shall any Underwriter (except as may be provided in the Agreement Among
Underwriters) be liable or responsible for any amount in excess of the
underwriting discounts and commissions applicable to the Stock purchased by such
Underwriter hereunder and (y) no person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Act) shall be entitled to
contribution from any person, if any, who was not guilty of such fraudulent
misrepresentation. For purposes of this Section 10(d), each person, if any, who
controls an Underwriter within the meaning of Section 15 of the Act shall have
the same rights to contribution as such Underwriter, and each person, if any,
who controls the Company within the meaning of Section 15 of the Act, each
officer of the Company who shall have signed the Registration Statement and each
director of the Company shall have the same rights to contribution as the
Company, subject in each case to clauses (x) and (y) of this Section 10(d). Any
party entitled to contribution will, promptly after receipt of notice of
commencement of any action, suit or proceeding against such party in respect of
which a claim for contribution may be made against another party or parties
under this Section 10(d), notify such party or parties from whom contribution
may be sought, but the omission to so notify such party or parties shall not
relieve the party or parties from whom contribution may be sought from any
obligation it or they may have under this Section 10(d) or otherwise. No party
shall be liable for contribution for any settlement of any action or claim
effected without its written consent.
11. DEFAULT OF THE UNDERWRITERS. If any Underwriter or
Underwriters default in their obligations to purchase the Stock hereunder and
arrangements satisfactory to you and the Company, evidenced by a writing or
writings signed by you and the Company, for the purchase of such Stock by other
persons are not made within 36 hours after such default, this Agreement will
terminate without liability on the party of any non-defaulting Underwriter and
the Company (except that the Company shall be liable for the expenses to be paid
by it pursuant to the provisions of Section 6), provided, however, that if the
number of shares of the Stock which all such defaulting Underwriters have agreed
but failed to purchase shall not exceed 10% of the number of shares of the Firm
Stock or the Option Stock, as the case may be, agreed to be purchased pursuant
to this Agreement (other than the shares agreed to be taken up hereunder which
the defaulting Underwriters failed to purchase) by all non-defaulting
Underwriters, the
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non-defaulting Underwriters shall be obligated proportionately to take up and
pay for the shares of the Firm Stock or the Option Stock which such defaulting
Underwriters failed to purchase.
If any such default occurs, either you or the Company shall
have the right to postpone the Closing Date for not more than seven days in
order that the necessary changes in the Registration Statement, Prospectus and
any other documents, as well as any other arrangement, may be effected. As used
in this Agreement, the term "Underwriters" includes any person substituted for
an Underwriter under this Section. Nothing herein will relieve a defaulting
Underwriter from its liability to the other several Underwriters and the Company
for its default hereunder.
12. REPRESENTATIONS AND INDEMNITIES TO SURVIVE DELIVERY.
The respective indemnities, agreements, representations and warranties of the
Company and the several Underwriters, set forth in or made pursuant to this
Agreement, will remain in full force and effect, regardless of any investigation
made by or on behalf of any Underwriter, the Company or any of its officers or
directors or any controlling person, and will survive delivery of and payment
for the Stock and, in the case of the agreements contained in Sections 6, 9 and
10 hereof, will survive any termination of this Agreement.
13. NOTICES. All communications hereunder will be in
writing and, if sent to the Underwriters, will be mailed, delivered or
telegraphed and confirmed to you at McDonald Investments Inc., XxXxxxxx
Investment Center, 000 Xxxxxxxx Xxxxxx, Xxxxxxxxx, Xxxx 00000, Attention: Xxxxxx
X. Xxxxxx, with a copy to Powell, Goldstein, Xxxxxx & Xxxxxx LLP, 000 Xxxxxxxxx
Xxxxxx, XX, Xxxxx 0000, Xxxxxxx, Xxxxxxx 00000, Attention: Xxxxxxxxx X. Xxxxx,
or if sent to the Company, will be mailed, delivered or telegraphed and
confirmed to the Company at Pinnacle Financial Partners, Inc., 000 Xxxxxxxx
Xxxxxx, Xxxxx 000, Xxxxxxxxx, Xxxxxxxxx 00000, Attention: President, with a copy
to Bass, Xxxxx & Xxxx PLC, 000 Xxxxxxxx Xxxxxx, Xxxxx 0000, Xxxxxxxxx, Xxxxxxxxx
00000, Attention: Xxx X. Xxxxxxxx.
14. SUCCESSORS, GOVERNING LAW. This Agreement will inure
solely to the benefit of and be binding upon the parties hereto and the officers
and directors and controlling persons referred to in Section 10 hereof and their
respective successors, assigns, heirs, executors and administrators, and no
other persons will have any right or obligation hereunder. This Agreement will
be governed by and construed in accordance with the laws of the State of Ohio,
without giving effect to the principles of any conflict of laws statute or
common-law doctrine thereof.
15. EXECUTION IN COUNTERPARTS. This Agreement may be
executed by any one or more of the parties hereto in any number of counterparts,
each of which shall be deemed to be an original, but all such counterparts shall
together constitute one and the same instrument.
16. AUTHORITY OF THE REPRESENTATIVE. You represent and
warrant that you have been authorized by the several Underwriters to enter into
this Agreement on their behalf and to act for them in the manner herein before
provided.
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If the foregoing is in accordance with your understanding of
our agreement, kindly sign and return to us the enclosed copies hereof,
whereupon it will become a binding agreement by and among the Company and the
several Underwriters in accordance with its terms.
Very truly yours,
PINNACLE FINANCIAL PARTNERS, INC.
By:
---------------------------------
Its:
--------------------------------
The foregoing Agreement is hereby confirmed
and accepted by us in Cleveland, Ohio,
acting on our own behalf and as the
Representative of the several Underwriters
named on Schedule A annexed hereto, as of
the date first abovewritten.
McDONALD INVESTMENTS INC.
As Representative of the Several Underwriters
By:
------------------------------------------
Managing Director
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SCHEDULE A
UNDERWRITERS
Number of Shares to
Underwriter be Purchased
----------- -------------------
McDonald Investments Inc............................................... 1,000,000
Total ...............................................
