Exhibit 1.1
690,000 SHARES
MATEWAN BANCSHARES, INC.
CUMULATIVE CONVERTIBLE PREFERRED STOCK, SERIES A
_____________________________
UNDERWRITING AGREEMENT
_____________________________
WHEAT, FIRST SECURITIES, INC.
As Underwriter
Riverfront Plaza
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ _____________, 1996
Dear Sirs:
Matewan BancShares, Inc., a Delaware corporation (the "Company"), proposes,
subject to the terms and conditions stated herein, to issue and sell to you (the
"Underwriter") an aggregate of 600,000 shares of cumulative convertible
preferred stock, $1.00 par value, $25.00 stated value, of the Company (the
"Preferred Stock") and, at your election, an aggregate of 90,000 additional
shares of Preferred Stock. The 600,000 shares to be sold by the Company are
herein called the "Firm Securities," and the 90,000 additional shares to be sold
by the Company are herein called the "Optional Securities." The Firm Securities
and the Optional Securities that you elect to purchase pursuant to Section 2
hereof are collectively called the "Securities."
1. Representations and Warranties. The Company represents and warrants to, and
agrees with, the Underwriter that:
(a) A registration statement on Form S-1 (File No. 33-____) under the
Securities Act of 1933, as amended (the "Act"), and as a part thereof a
preliminary prospectus, in respect of the Securities has been filed with the
Securities and Exchange Commission (the "Commission") in the form heretofore
delivered to you, and, excluding exhibits thereto, for each of the other
Underwriters; such registration statement, as amended, has been declared
effective by the Commission; no other document with respect to such
registration statement has heretofore been filed with the Commission other
than in accordance with Section 5(a) of this Agreement; and no stop order
suspending the effectiveness of such registration statement has been issued
and no proceeding for that purpose has been instituted or threatened by the
Commission. As used in this Agreement, the term "Registration Statement"
means such registration statement, as amended at the time when it was or is
declared effective, including all financial schedules and exhibits thereto and
including any information omitted therefrom pursuant to Rule 430A under the
Act and included in the Prospectus (as hereinafter defined); the term
"Preliminary Prospectus" means each prospectus subject to completion filed
with such registration statement or any amendment thereto (including the
prospectus subject to completion, if any, included in the Registration
Statement or any amendment thereto at the time it was or is declared effective
but excluding the Preliminary Prospectus dated ________, 1996); the term
"Prospectus" means: (A) if the Company relies on Rule 434 under the Act, the
Term Sheet relating to the Securities that is first filed pursuant to Rule
424(b)(7) under the Act, together with the Preliminary Prospectus identified
therein that such Term Sheet supplements; (B) if the Company does not rely on
Rule 434 under the Act, the prospectus first filed with the Commission
pursuant to Rule 424(b) under the Act; or (C) if the Company does not rely on
Rule 434 under the Act and if no prospectus is required to be filed pursuant
to Rule 424(b) under the Act, the prospectus included in the Registration
Statement; and the term "Term Sheet" means any term sheet that satisfies the
requirements of Rule 434 under the Act. Any reference to the "date" of a
Prospectus that includes a Term Sheet shall mean the date of such Term Sheet;
(b) No order preventing or suspending the use of any Preliminary Prospectus
has been issued by the Commission, and each Preliminary Prospectus, at the
time of filing thereof, conformed in all material respects to the requirements
of the Act and the rules and regulations of the Commission thereunder, and did
not contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; provided, that this representation and warranty shall
not apply to any statements or omissions made in reliance upon and in
conformity with information furnished in writing to the Company by you
expressly for use therein;
(c) The Registration Statement conforms, and the Prospectus and any
amendments or supplements thereto will conform, in all material respects to
the requirements of the Act and the rules and regulations of the Commission
thereunder and do not and will not as of the applicable effective date as to
the Registration Statement and any amendment thereto and as of the applicable
filing date as to the Prospectus and any amendment or supplement thereto
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; provided, that this representation and warranty shall not
apply to any statements or omissions made in reliance upon and in conformity
with information furnished in writing to the Company by you expressly for use
therein;
(d) This Agreement has been duly authorized, executed and delivered by the
Company;
(e) Except as described in the Prospectus, the issue and sale of the
Securities by the Company and the performance of this Agreement and the
consummation by the Company of the other transactions herein contemplated will
not (i) conflict with or result in a breach of any of the terms or provisions
of, or constitute a default (or an event which with notice or lapse of time,
or both, would constitute a default) under, or result in the creation or
imposition of any lien, charge or encumbrance upon any property or assets of
the Company, any Subsidiary or Pikeville pursuant to any agreement,
instrument, franchise, license or permit to which the Company, any Subsidiary
or Pikeville is a party or by which any of them or their respective properties
or assets may be bound, or (ii) violate or conflict with any provisions of the
Certificate of Incorporation or Bylaws of the Company or the charter, articles
of incorporation, articles of association or bylaws of any of the Subsidiaries
or Pikeville, or any judgment, decree, order, statute, rule or regulation of
any court or any public, governmental or regulatory agency or body having
jurisdiction over the Company, any Subsidiary or Pikeville or any of their
respective properties or assets; and no consent, approval, authorization,
order, registration or qualification of or with any such court or governmental
agency or body is required for the issue and sale of the Securities or the
consummation by the Company of the transactions contemplated by this
Agreement, except such consents, approvals, authorizations, registrations or
qualifications as may be required under the Act and under state securities or
Blue Sky laws in connection with the purchase and distribution of the
Securities by the Underwriter;
(f) The Company has an authorized capitalization as set forth in the
Prospectus; all of the issued shares of capital stock of the Company have been
duly and validly authorized and issued, are fully paid and nonassessable and
conform to the description of the capital stock of the Company contained in
the Prospectus; except as described in the Prospectus, there are no preemptive
or other similar rights to subscribe for or to purchase any securities of the
Company; except as described in the Prospectus, no equity securities of the
Company are or may become required to be issued by reason of any options,
warrants, scrip, rights to subscribe to, calls or commitments of any character
whatsoever relating to, or securities or rights convertible into or
exchangeable for, shares of the capital stock of the Company, and there are no
contacts by which the Company is bound to issue additional shares of its
capital stock or options, warrants or rights to purchase or acquire any
additional shares of its capital stock; neither the filing of the Registration
Statement nor the offering or sale of the Securities as contemplated by this
Agreement gives rise to any rights for or relating to the registration of any
securities of the Company with respect to such filing, offering or sale, other
than rights which have been waived;
(g) The Securities have been duly and validly authorized and, when issued
and delivered against payment therefor as provided herein, will be duly and
validly issued and fully paid and nonassessable and will conform to the
description of the Securities contained in the Prospectus as amended or
supplemented;
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(h) The Securities have been approved for listing, subject to notice of
issuance, on The Nasdaq Stock Market's SmallCap Market;
(i) Exhibit 21 of the Registration Statement contains a complete and
correct list of the subsidiaries of the Company, which subsidiaries are the
Company's only active subsidiaries (the "Subsidiaries"); except for
investments made in the ordinary course of business by venture capital
companies pursuant to the laws of West Virginia, the Company and the
Subsidiaries do not own more than 5% of the equity interests of any other
business entities other than shares of publicly-held companies held solely
for investment; hereinafter, unless specifically indicated otherwise, all
references to the Company shall include and apply to the Company and the
Subsidiaries collectively;
(j) The Company has all requisite power and authority to execute, deliver
and perform its obligations under the Stock Purchase Agreement, dated as of
September 28, 1995 (the "Purchase Agreement"), with Banc One Corporation and
Banc One Kentucky Corporation, pursuant to which the Company has agreed to
acquire (the "Stock Purchase") from Banc One Kentucky Corporation all of the
outstanding shares of capital stock of Bank One Pikeville, N.A. ("Pikeville");
the Purchase Agreement and the transactions contemplated thereby have been
duly and validly authorized by the Company and the Purchase Agreement has been
duly and validly executed and delivered by the Company; except as described in
the Prospectus, the execution, delivery and performance of the Purchase
Agreement and the consummation by the Company of the other transactions herein
contemplated will not (i) conflict with or result in a breach of any of the
terms or provisions of, or constitute a default (or an event which with notice
or lapse of time, or both, would constitute a default) under, or result in the
creation or imposition of any lien, charge or encumbrance upon any property or
assets of the Company, any Subsidiary or Pikeville pursuant to any agreement,
instrument, franchise, license or permit to which the Company, any Subsidiary
or Pikeville is a party or by which any of them or their respective properties
or assets may be bound, or (ii) violate or conflict with any provisions of the
Certificate of Incorporation or Bylaws of the Company or the charter, articles
of incorporation, articles of association or bylaws of any of the Subsidiaries
or Pikeville, or any judgment, decree, order, statute, rule or regulation of
any court or any public, governmental or regulatory agency or body having
jurisdiction over the Company, any Subsidiary or Pikeville or any of their
respective properties or assets; and all consents, approvals, authorizations,
orders, registrations, filings, qualifications, licenses or permits of or with
any court or any public, governmental or regulatory agency or body required
for the execution and delivery of the Purchase Agreement and the consummation
and performance of the transactions contemplated thereby have been obtained or
made and are in full force and effect and no such consent, approval,
authorization, order, registration, qualification, license or permit contains
a materially burdensome restriction not adequately disclosed in the
Registration Statement and the Prospectus;
(k) The consolidated financial statements of the Company, together with
related notes, as set forth in the Registration Statement present fairly the
financial position, the results of operations and the cash flows of the
Company at the indicated dates and for the indicated periods; such financial
statements of the Company have been prepared in accordance with generally
accepted accounting principles, consistently applied throughout the periods
presented except as noted in the notes thereon, and all adjustments necessary
for a fair presentation of results for such periods have been made; and the
selected financial information relating to the Company included in the
Prospectus presents fairly the information shown therein and has been compiled
on a basis consistent with the financial statements presented therein; and the
financial statements of Pikeville, together with related notes, as set forth
in the Registration Statement present fairly the financial position, the
results of operations and the cash flows of Pikeville at the indicated dates
and for the indicated periods; such financial statements of Pikeville have
been prepared in accordance with generally accepted accounting principles,
consistently applied throughout the periods presented except as noted in the
notes thereon, and all adjustments necessary for a fair presentation of
results for such periods have been made; the selected financial information
relating to Pikeville included in the Prospectus presents fairly the
information shown therein and has been compiled on a basis consistent with the
financial statements presented therein; the supporting schedules and pro forma
financial information included in the Registration Statement and the
Prospectus present fairly the information required to be stated therein;
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(l) Ernst & Young LLP, independent auditors, who have certified certain
financial statements of the Company and Pikeville, are independent public
accountants as required by the Act and the rules and regulations of the
Commission thereunder;
(m) Each of the Company, the Subsidiaries and Pikeville has been duly
incorporated and are validly existing as corporations in good standing under
the laws of their respective jurisdictions of incorporation, with power and
authority (corporate and other) to own or lease their respective properties
and conduct their respective businesses as described in the Prospectus, and
each has been duly qualified as a foreign corporation for the transaction of
business and is in good standing under the laws of each other jurisdiction in
which it owns or leases properties, or conducts any business, so as to require
such qualification, except where the failure to so qualify would not result in
a material adverse effect on the business, management, financial position,
shareholders' equity or results of operations of the Company; each of Matewan
National Bank, Matewan Bank, FSB and Pikeville is an "insured institution" as
defined in the Federal Deposit Insurance Act and applicable regulations
thereunder, and the deposits in which are insured by the Bank Insurance Fund
or the Savings Association Insurance Fund;
(n) Except as described in the Prospectus, the Company owns, either
directly or through wholly-owned Subsidiaries, all outstanding shares of
capital stock of each of the Subsidiaries, free and clear of any perfected
security interest and any other security interest, claim, lien or
encumbrance; except as described in the Prospectus, upon consummation of the
Stock Purchase in accordance with the Purchase Agreement, the Company will
own directly all outstanding shares of capital stock of Pikeville, free and
clear of any perfected security interest and any other security interest,
claim, lien or encumbrance; there are no preemptive or other similar rights
to subscribe for or to purchase any securities of any Subsidiary or (except
for the rights granted to the Company pursuant to the Purchase Agreement)
Pikeville; no equity securities of any Subsidiary or of Pikeville are or may
become required to be issued by reason of any options, warrants, scrip,
rights to subscribe to, calls or commitments of any character whatsoever
relating to, or securities or rights convertible into or exchangeable for,
shares of the capital stock of any such Subsidiary or Pikeville, and there
are no contacts by which any Subsidiary or Pikeville is bound to issue
additional shares of its capital stock or options, warrants or rights to
purchase or acquire any additional shares of its capital stock or by which
any such Subsidiary or Pikeville is or may be bound to transfer any shares
of its capital stock;
(o) Each of the Company, the Subsidiaries and Pikeville has good and
marketable title in fee simple to all real property and good and marketable
title to all personal property owned by it, free and clear of all liens,
encumbrances and defects except such as are described in the Prospectus,
including, without limitation, the financial statements included therein, or
such as do not materially affect the value of such property and do not
interfere with the use made of such property by it or proposed to be made of
such property by the Company; and any tangible property held under lease by
any of the Company, the Subsidiaries or Pikeville are held by it under valid,
subsisting and enforceable leases with such exceptions as are not material and
do not interfere with the use made of such property by it or proposed to be
made of such property and buildings by the Company;
(p) There are no legal or governmental proceedings pending to which the
Company, any Subsidiary or Pikeville is a party or of which any property of
the Company, any Subsidiary or Pikeville is the subject, other than as set
forth or contemplated in the Prospectus, which, if determined adversely to the
Company, such Subsidiary or Pikeville, would individually or in the aggregate,
have a material adverse effect on the business, prospects, properties,
operations, condition (financial or other) or results of operations of the
Company, the Subsidiaries and Pikeville, taken as a whole, or which is
required to be disclosed in the Registration Statement and the Prospectus and,
to the best of the Company's knowledge, no such proceedings are threatened or
contemplated by governmental authorities or by others; except as disclosed in
the Prospectus, neither the Company, any Subsidiary nor Pikeville (i) is in
violation of any laws, orders or permits applicable to its business or
employees conducting its business, except for violations which will not in the
aggregate have a material adverse effect on the Company, the Subsidiaries and
Pikeville, taken as a whole, (ii) has received any notification or
communication from any agency or department of federal, state or local
government or any federal or state regulatory authority (including, without
limitation, the SEC, the Office of the Comptroller of the Currency, the Office
of Thrift Supervision, the Federal Deposit Insurance Corporation or the Board
of Governors of the Federal Reserve System) or the staff thereof, (A)
asserting that the Company, any Subsidiary or Pikeville is not in compliance
with any of the material laws or material orders which such government or
regulatory authority enforces where such noncompliance will in the aggregate
have a material adverse effect on the Company, the Subsidiaries and Pikeville,
taken as a whole, (B) threatening to revoke any material permits the
revocation of which will in the aggregate have a material adverse effect on
the Company, the Subsidiaries and Pikeville, taken as a whole or (C) requiring
the Company, any Subsidiary
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or Pikeville to enter into or consent to the issuance of a cease and desist
order, formal agreement, directive, commitment or memorandum of
understanding, or to adopt any resolution or similar undertaking which
restricts materially the conduct of its business, or in any manner relates
to its capital adequacy, its management or the payment of dividends;
(q) All employee benefit plans (as defined in Section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA")) established,
maintained or contributed to by the Company comply in all material respects
with the requirements of ERISA and no employee pension benefit plan (as
defined in Section 3(2) of ERISA) has incurred or assumed an "accumulated
funding deficiency" within the meaning of Section 302 of ERISA or has incurred
or assumed any material liability (other than for the payment of premiums) to
the Pension Benefit Guaranty Corporation;
(r) Each of the Company, the Subsidiaries and Pikeville has filed all
federal, state and foreign income tax returns which have been required to be
filed (or has received an extension with respect thereto), and has paid, or
made adequate reserves for, all taxes indicated by said returns and all
assessments received by them to the extent that such taxes have become due
and are not being contested in good faith;
(s) Except as described in the Prospectus, each of the Company, the
Subsidiaries and Pikeville, any facility in which the Company, any Subsidiary
or Pikeville participates in the management ("Participation Facility") and any
property owned by the Company, any Subsidiary or Pikeville are, and have been,
in compliance with all laws which are administered, interpreted or enforced by
the United States Environmental Protection Agency and state and local agencies
with jurisdiction over pollution or protection of the environment
("Environmental Laws"), except for violations which will not in the aggregate
have a material adverse effect on the Company, the Subsidiaries and Pikeville,
taken as a whole; to the knowledge of the Company, there is no litigation
pending or threatened before any court, governmental agency or authority or
other forum in which the Company, any Subsidiary or Pikeville or any
Participation Facility has been or, with respect to threatened litigation, may
be named as a defendant (i) for alleged non-compliance (including by any
predecessor) with any Environmental Law, or (ii) relating to the release into
the environment of any pollutant, contaminant or hazardous substance within
the meaning of the Comprehensive Environmental Response, Compensation, and
Liability Act, 42 U.S.C. Section 9601 et seq., or any similar federal, state
or local law ("Hazardous Material") or oil, whether or not occurring at, on,
under or involving a site owned, leased or operated by the Company, any
Subsidiary or Pikeville or any Participation Facility, except for such
litigation pending or threatened that will not in the aggregate have a
material adverse effect on the Company, the Subsidiaries and Pikeville, taken
as a whole; to the knowledge of the Company, there have been no releases of
Hazardous Materials or oil in, on, under or affecting any properties that are
or were owned or operated by the Company, any Subsidiary or Pikeville or any
Participation Facility, except such as will not in the aggregate have a
material adverse effect on the Company, the Subsidiaries and Pikeville, taken
as a whole;
(t) No relationship, direct or indirect, exists between or among the
Company, any Subsidiary or Pikeville, on the one hand, and the directors,
officers, shareholders, customers or suppliers of the Company, on the other
hand, that is required by the Act or by the rules and regulations under the
Act to be described in the Registration Statement and the Prospectus that is
not so described;
(u) The Company owns or possesses, or can acquire on reasonable terms and
within a reasonable time, adequate licenses, copyrights, trademarks, service
marks and trade names (collectively, "intellectual property") necessary to
carry on its business as presently operated by it, except where the failure to
own or possess or have the ability to acquire any such intellectual property
would not, individually or in the aggregate, have a material adverse effect on
the business, management, financial position, shareholders' equity or results
of operations of the Company, and the Company has not received any notice or
is otherwise aware of any infringement of or conflict with asserted rights of
others, including infringement by or conflict with the asserted rights of the
Company's distributors and licensees, with respect to any intellectual
property or of any facts which would
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render any intellectual property invalid or inadequate to protect the
interest of the Company therein and which infringement or conflict could
have a material adverse effect on the business, management, financial
position, shareholders' equity or results of operations of the Company;
(v) Any contract, agreement, instrument, lease or license to which the
Company, any Subsidiary or Pikeville is a party and which is required to be
described in the Registration Statement or Prospectus has been described
therein; any contract, agreement, instrument, lease or license required to be
filed as an exhibit to the Registration Statement has been filed with the
Commission as an exhibit to, or has been incorporated as an exhibit by
reference into, the Registration Statement;
(w) Neither Company, nor any director, officer, agent, employee or other
person acting on behalf of the Company has (i) used, or authorized the use of,
any corporate or other funds for unlawful payments, contributions, gifts or
entertainment, (ii) made unlawful expenditures relating to political activity
to government officials or others, or (iii) established or maintained any
unlawful or unrecorded funds in violation of Section 30A of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), except where doing so
would not in the aggregate have a material adverse effect on the business,
management, financial position, shareholders' equity or results of operations
of the Company; neither Company, nor any director, officer, agent, employee or
other person acting on behalf of the Company has accepted or received any
unlawful contributions, payments, gifts or expenditures;
(x) Neither the Company, any Subsidiary nor Pikeville has sustained since
the date of the latest audited financial statements included in the
Prospectus any material loss or interference with its business from fire,
explosion, flood or other calamity, whether or not covered by insurance, or
from any labor dispute or court or governmental action, order or decree,
otherwise than as set forth or contemplated in the Prospectus; and, since the
respective dates as of which information is given in the Registration
Statement and the Prospectus, there has not been any change in the
outstanding capital stock or a material change in the long-term debt of the
Company, or any material adverse change, or any development involving a
prospective material adverse change, in or affecting the business,
management, financial position, shareholders' equity or results of operations
of the Company, the Subsidiaries or Pikeville, otherwise than as set forth
or contemplated in the Prospectus;
(y) The Company has not taken and will not take, directly or indirectly,
any action that is designed to or that has constituted or that might
reasonably be expected to cause or result in stabilization or manipulation
of the price of any security of the Company to facilitate the sale or resale
of the Securities; and
(z) The Company does not and has no intention of conducting its operations
in a manner that will subject it to registration as an investment company
under the Investment Company Act of 1940, as amended, and this transaction
will not cause the Company to become an investment company subject to
registration under such Act.
2. Purchase and Sale.
Subject to the terms and conditions herein set forth, (a) the Company agrees
to sell to you, and you agree to purchase from the Company, at a purchase price
per share of $[_____], the Firm Securities and (b) in the event and to the
extent that you shall exercise the election to purchase Optional Securities as
provided below, the Company agrees to sell to you, and you agree to purchase
from the Company, at the purchase price set forth in clause (a) of this Section
2, that portion of the number of Optional Securities as to which such election
shall have been exercised (to be adjusted by you so as to eliminate fractional
securities).
The Company hereby grants to you the right to purchase at your election up to
90,000 Optional Securities, at the purchase price per share set forth in the
paragraph above, for the sole purpose of covering over-allotments in the sale of
the Firm Securities. Any such election to purchase Optional Securities may be
exercised by written notice from you to the Company, given within a period of 30
days after the date of this Agreement, setting forth the aggregate amount of
Optional Securities to be purchased and the date on which such Optional
Securities are to be delivered, as determined by you but in no event earlier
than the First Delivery Date (as defined in Section 4 hereof)
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or, unless you otherwise agree in writing, no earlier than two or later than
ten business days after the date of such notice.
3. Offering by the Underwriter.
Upon the authorization by you of the release of the Firm Securities, you
propose to offer the Firm Securities for sale upon the terms and conditions set
forth in the Prospectus.
4. Delivery and Payment.
One or more certificates in definitive form for the Securities to be purchased
by you hereunder, and in such denominations and registered in such names as you
may request upon at least two business days' prior notice to the Company, shall
be delivered by or on behalf of the Company to Wheat, First Securities, Inc.,
for your account, against payment by you or on your behalf of the purchase price
therefor. Payment of the purchase price for the Securities shall be made by
certified or official bank check in next day funds (which shall mean immediately
available funds on the next business day) or, at the option of the Company, by
wire transfer of immediately available funds, all at the offices of Wheat, First
Securities, Inc., Riverfront Plaza, ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇.
If payment is made in immediately available funds, the Company shall reimburse
you for your cost of delivering immediately available funds, such cost to be
computed at a daily rate equal to your cost of overnight borrowings for each day
from the Delivery Date to the immediately following business day. The time and
date of such delivery and payment shall be, with respect to the Firm Securities,
10:00 a.m., Richmond, Virginia time, on [_____________ ], 1996 or at such other
time and date as you and the Company may agree upon in writing, and, with
respect to the Optional Securities, 10:00 a.m., Richmond, Virginia time, on the
date specified by you in the written notice given by you of your election to
purchase such Optional Securities, or at such other time and date as you and the
Company may agree upon in writing. Such time and date for delivery of the Firm
Securities is herein called the "First Delivery Date," such time and date for
delivery of the Optional Securities, if not the First Delivery Date, is herein
called the "Second Delivery Date," and each such time and date for delivery is
herein called a "Delivery Date." Such certificates will be made available for
checking and packaging at least 24 hours prior to each Delivery Date at the
offices of Wheat, First Securities, Inc. at the address set forth above or such
other location designated by you to the Company.
5. Agreements of the Company.
The Company agrees with the Underwriter:
(a) To file with the Commission, not later than the Commission's close of
business on the second business day following the execution and delivery of
this Agreement or, if applicable, such earlier time as may be required by the
Act then (i) if the Registration Statement, as it may have been amended, has
been declared by the Commission to be effective under the Act, either (A) if
the Company relies on Rule 434 under the Act, a Term Sheet relating to the
Securities that shall identify the Preliminary Prospectus that it supplements
containing such information as is required or permitted by Rules 434, 430A and
424(b) under the Act or (B) if the Company does not rely on Rule 434 under the
Act, a Prospectus in the form most recently included in an amendment to the
Registration Statement (or, if no such amendment shall have been filed, in the
Registration Statement), with such changes or insertions as are required by
Rule 430A under the Act or permitted by Rule 424(b) under the Act, and in the
case of either clause (i)(A) or (i)(B) of this sentence, as have been provided
to and approved by the Representatives prior to the execution of this
Agreement, or (ii) if the Registration Statement, as it may have been amended,
has not been declared by the Commission to be effective under the Act, an
amendment to the Registration Statement, including a form of Prospectus, a
copy of which amendment has been furnished to and approved by the
Representatives prior to the execution of this Agreement; to make no amendment
or supplement to the Registration Statement or Prospectus prior to any
Delivery Date which shall be reasonably disapproved by you promptly after
reasonable notice thereof; to advise you, promptly after it receives notice
thereof, of the time when any amendment to the Registration Statement has been
filed or becomes effective or any supplement to the Prospectus or any amended
Prospectus has been filed and to furnish you with copies thereof; to advise
you, promptly after it receives notice thereof, of the issuance by the
Commission of any stop order or of any order preventing or suspending the use
of any Preliminary Prospectus or the Prospectus, of the suspension of the
qualification of the Securities for offering or sale in any jurisdiction,
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of the initiation or threatening of any proceeding for any such purpose, of
any request by the Commission for the amending or supplementing of the
Registration Statement or Prospectus or for additional information and, in the
event of the issuance of any stop order or of any order preventing or
suspending the use of any Preliminary Prospectus or the Prospectus or
suspending any such qualification, to use promptly its best efforts to obtain
its withdrawal;
(b) Promptly from time to time to take such actions as you may reasonably
request to qualify the Securities for offering and sale under the securities
laws of such jurisdictions as you may request and to comply with such laws so
as to permit the continuance of sales and dealings therein in such
jurisdictions for as long as may be necessary to complete the distribution of
the Securities but in no case for more than one year from the date hereof,
provided that in connection therewith the Company shall not be required to
qualify as a foreign corporation or to file a general consent to service of
process in any jurisdiction;
(c) Prior to 10:00 a.m., Richmond, Virginia time, on the business day next
succeeding the date of this Agreement, and from time to time to furnish you
with copies of the Prospectus in Richmond, Virginia in such quantities as you
may reasonably request at any time prior to the expiration of nine months
after the time of issue of the Prospectus in connection with the offering and
sale of the Securities, and, if the delivery of a prospectus is required
during this period and if at such time any event shall have occurred as a
result of which the Prospectus as then amended or supplemented would include
an untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made when such Prospectus is delivered,
not misleading, or, if for any other reason it shall be necessary during such
period to amend or supplement the Prospectus to comply with the Act, to notify
you and upon your request to file such document and to prepare and furnish
without charge to you and to any dealer in securities as many copies as you
may from time to time reasonably request of an amended Prospectus or a
supplement to the Prospectus which will correct such statement or omission or
effect such compliance;
(d) As soon as practicable after the effective date of the Registration
Statement, to make generally available to its shareholders and to deliver to
you, an earnings statement of the Company, conforming with the requirements of
Section 11(a) of the Act and Rule 158 under the Act, covering a period of at
least 12 months beginning after the effective date of the Registration
Statement;
(e) For a period of 180 days from the date of the Prospectus, not to
directly or indirectly offer, sell or otherwise dispose of any shares of
Common Stock or Preferred Stock or any securities convertible into or
exercisable or exchangeable for, or any rights to purchase or acquire shares
of Common Stock or Preferred Stock, or any other securities of the Company
(other than the Securities or pursuant to employee stock option plans or
pursuant to options, warrants or rights outstanding immediately following the
First Delivery Date or pursuant to bona fide gifts to persons who agree in
writing with the donor to be bound by this restriction), without your prior
written consent;
(f) During a period of five years from the effective date of the
Registration Statement, to furnish to you copies of all reports or other
communications (financial or other) furnished to shareholders, and deliver to
you (i) as soon as they are available, copies of any reports and financial
statements furnished to or filed with the Commission or any national
securities exchange on which any class of securities of the Company is listed;
and (ii) such additional information concerning the business and financial
condition of the Company as you may from time to time reasonably request;
(g) To apply the net proceeds from the sale of the Securities for the
purposes set forth in the Prospectus; and
(h) To cause the Securities to be duly included for quotation on The Nasdaq
Stock Market's SmallCap Market ("Nasdaq") prior to the First Delivery Date;
and to ensure that the Securities remain included for quotation on Nasdaq or a
national securities exchange following the First Delivery Date for a period
which is the earlier of 36 months or until such time as the Company no longer
has a class of equity securities registered under the Exchange Act.
8
6. Payment of Expenses
The Company covenants and agrees with the Underwriter that: (i) the Company
will pay or cause to be paid the fees, disbursements and expenses of the
Company's counsel and accountants in connection with the registration of the
Securities under the Act and all other expenses in connection with the
preparation, printing and filing of the Registration Statement, any Preliminary
Prospectus and the Prospectus and amendments and supplements thereto and the
mailing and delivering of copies thereof to the Underwriter and dealers; (ii)
the Company will pay or cause to be paid the cost of reproducing this Agreement,
the Blue Sky Survey and Memorandum and any other documents in connection with
the offering, purchase, sale and delivery of the Securities; (iii) the Company
will pay or cause to be paid all expenses in connection with the qualification
of the Securities for offering and sale under state securities laws as provided
in Section 5(b) hereof, including the fees and disbursements of counsel for the
Underwriters in connection with such qualification and in connection with the
Blue Sky Survey and Memorandum; (iv) the Company will pay or cause to be paid
the filing fees incident to securing any required review by the National
Association of Securities Dealers, Inc. of the terms of the sale of the
Securities; (v) the Company will pay or cause to be paid the cost of preparing
stock certificates; (vi) the Company will pay or cause to be paid the costs or
expenses of any transfer agent or registrar; and (vii) the Company will pay or
cause to be paid all other costs and expenses incident to the performance of its
obligations hereunder which are not otherwise specifically provided for in this
Section. It is understood, however, that except as provided in Section 8 and
Section 11 hereof, you will pay all your own costs and expenses, including the
fees of your counsel, stock transfer taxes on resale of any of the Securities by
them and any advertising expenses connected with any offers you may make.
7. Conditions to Obligations of Underwriter.
The obligations of the Underwriter hereunder, as to the Securities to be
delivered at each Delivery Date, shall be subject, in your discretion, to the
condition that all representations and warranties and other statements of the
Company herein are, at and as of such Delivery Date, true and correct, the
condition that the Company shall have performed all of its obligations hereunder
theretofore to be performed, and the following additional conditions:
(a) If the Registration Statement or any amendment thereto filed prior to
the First Delivery Date has not been declared effective as of the time of
execution hereof, the Registration Statement or such amendment shall have been
declared effective not later than 11 A.M., Richmond time, on the date on which
the amendment to the Registration Statement containing information regarding
the initial public offering price of the Securities has been filed with the
Commission, or such later time and date as shall have been consented to by the
Representatives; if required, the Prospectus or any Term Sheet that
constitutes a part thereof and any amendment or supplement thereto shall have
been filed with the Commission in the manner and within the time period
required by Rules 434 and 424(b) under the Act; no stop order suspending the
effectiveness of the Registration Statement or any amendment thereto shall
have been issued, and no proceedings for that purpose shall have been
instituted or threatened or, to the knowledge of the Company or the
Underwriter, shall be contemplated by the Commission; and the Company shall
have complied with any request of the Commission for additional information
(to be included in the Registration Statement or the Prospectus or otherwise);
(b) ▇▇▇▇▇▇ & Bird, counsel for the Underwriter, shall have furnished to you
such opinion or opinions, dated such Delivery Date, with respect to the
incorporation of the Company, the validity of the Securities being issued at
such Delivery Date, the Registration Statement, the Prospectus, and other
related matters as you may reasonably request, and such counsel shall have
received such papers and information as they may reasonably request to enable
them to pass upon such matters (provided, that as to all matters governed by
West Virginia law, ▇▇▇▇▇▇ & Bird shall be entitled to rely upon the opinion of
▇▇▇▇▇▇▇ & ▇▇▇▇▇);
(c) ▇▇▇▇▇▇▇ & ▇▇▇▇▇, counsel for the Company, shall have furnished to you
their written opinion, dated such Delivery Date, in form reasonably
satisfactory to you, to the effect that:
(i) Each of the Company, the Subsidiaries and Pikeville have been duly
incorporated and are validly existing as corporations in good standing
under the laws of their respective jurisdictions of incorporation, with
corporate power and authority to own or lease their respective properties
and conduct their respective businesses as described in the Prospectus;
9
(ii) Each of the Company, the Subsidiaries and Pikeville have been duly
qualified as foreign corporations for the transaction of business and are
in good standing under the laws of every other jurisdiction in which they
own or lease properties, or, to such counsel's knowledge, conduct any
business, so as to require such qualification, except where the failure to
so qualify will not result in a material adverse effect on the business,
management, financial position, shareholders' equity or results of
operations of the Company;
(iii) The Company has an authorized capitalization as set forth in the
Prospectus, and all of the issued shares of capital stock of the Company
have been duly and validly authorized and issued, are fully paid and
nonassessable and conform to the description of the capital stock contained
in the Prospectus; there are no preemptive or other similar rights to
subscribe for or to purchase any securities of the Company; to such
counsel's knowledge, except as described in the Prospectus, there are no
warrants or options to purchase any securities of the Company which are
currently outstanding or will be as of the Delivery Date; to such counsel's
knowledge, neither the filing of the Registration Statement nor the
offering or sale of the Securities as contemplated by this Agreement gives
rise to any rights for or relating to the registration of any securities of
the Company with respect to such filing, offering or sale, other than
rights which have been waived; and the form of the certificates evidencing
the Securities complies with all formal requirements of Delaware law;
(iv) All of the issued shares of capital stock of the Subsidiaries and
of Pikeville have been duly and validly authorized and issued and are fully
paid and nonassessable; and except as otherwise set forth in the
Prospectus, all outstanding shares of capital stock of the Subsidiaries are
owned by the Company either directly or through wholly-owned subsidiaries
free and clear of any security interests, claims, liens or encumbrances
and, upon consummation of the Stock Purchase in accordance with the
provisions of the Purchase Agreement, all outstanding shares of capital
stock of Pikeville will be owned by the Company free and clear of any
security interests, claims, liens or encumbrances;
(v) The Securities have been duly and validly authorized and when
issued and delivered against payment therefor on the Delivery Date, will
be duly and validly issued and fully paid and nonassessable, and will
conform to the description of the Securities contained in the Prospectus
as amended or supplemented;
(vi) To such counsel's knowledge, neither the Company, any Subsidiary
nor Pikeville has sustained since the date of the latest audited financial
statements included in the Prospectus any material loss or interference
with its business from fire, explosion, flood or other calamity, whether or
not covered by insurance, or from any labor dispute or court or
governmental action, order or decree, otherwise than as set forth or
contemplated in the Prospectus; and, since the respective dates as of which
information is given in the Registration Statement and the Prospectus,
there has not been any change in the outstanding capital stock or a
material change in the long-term debt of the Company or any material
adverse change, or any development involving a prospective adverse change,
in or affecting the business, management, financial position, shareholders'
equity or results of operations of the Company, the Subsidiaries or
Pikeville, otherwise than as set forth or contemplated in the Prospectus;
(vii) To such counsel's knowledge, there is no legal or governmental
proceeding pending to which the Company, any Subsidiary or Pikeville is a
party or of which any property of the Company, any Subsidiary or Pikeville
is the subject, other than as set forth or contemplated in the Prospectus,
that, if determined adversely, would individually or in the aggregate have
a material adverse effect on the business, management, financial position,
shareholders' equity or results of operations of the Company, and, to such
counsel's knowledge, no such proceedings are threatened or contemplated by
governmental authorities or threatened by others;
(viii) The issue and sale of the Securities being issued at such
Delivery Date by the Company and the performance of this Agreement by the
Company and the consummation by the Company of the other transactions
herein contemplated will not conflict with or result in a breach or
violation of any terms or provisions of, or constitute a default under,
any indenture, mortgage, deed of trust, loan agreement or other agreement
or instrument to which the Company, any Subsidiary or Pikeville is a party
or by which
10
the Company, any Subsidiary or Pikeville is bound or to which any of the
property or assets of the Company, any Subsidiary or Pikeville is subject,
nor will such action result in any violation of the provisions of the
Certificate of Incorporation or Bylaws of the Company or the charter,
articles of incorporation, articles of association or bylaws of any of the
Subsidiaries or Pikeville or of any statute or any order, rule or
regulation known to such counsel of any court or governmental agency or
body having jurisdiction over the Company, any Subsidiary or Pikeville or
any of their respective properties;
(ix) No consent, approval, authorization, order, registration or
qualification of or with any such court or governmental agency or body is
required for the issue and sale of the Securities being issued at the
Delivery Date by the Company or the consummation by the Company of the
other transactions contemplated by this Agreement, except such as have been
set forth or contemplated in the Prospectus, such as have been obtained
under the Act and such as may be required under state securities or Blue
Sky laws in connection with the purchase and distribution of the Securities
by the Underwriters;
(x) The Registration Statement and the Prospectus or the Term Sheet
and any further amendments and supplements thereto made by the Company,
including a registration statement filed pursuant to Rule 462(b) of the
Act, prior to such Delivery Date (other than the financial statements and
related schedules and data, 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 regulations thereunder; such counsel has no
reason to believe that, as of the effective date of the Registration
Statement and as of such Delivery Date, either the Registration Statement,
the Prospectus or the Term Sheet (other than the financial statements and
related schedules and data) (or, as of its date, any further amendment or
supplement thereto, including a registration statement filed pursuant to
Rule 462(b) of the Act, made by the Company prior to such Delivery Date)
contained an untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were
made, not misleading; and such counsel does not know of any contracts or
other documents of a character required to be filed as an exhibit to the
Registration Statement or required to be described in the Registration
Statement, the Prospectus or the Term Sheet which are not filed or
described as required;
(xi) The descriptions in the Registration Statement and Prospectus and
any further amendments or supplements thereto, including a registration
statement filed pursuant to Rule 462(b) of the Act, of statutes, and to
such counsel's knowledge, legal and governmental proceedings and contracts
and other documents are accurate and fairly present the information
required to be shown; and
(xii) This Agreement has been duly authorized, executed and delivered
by the Company.
Such opinion may be furnished subject to such stated assumptions, limitations
and qualifications as shall be acceptable to ▇▇▇▇▇▇ & Bird, counsel for the
Underwriter.
(d) At 10:00 a.m., Richmond, Virginia time, on the date of this Agreement
and the effective date of the most recently filed post-effective amendment to
the Registration Statement and also at each Delivery Date, Ernst & Young LLP
shall have furnished to you a letter or letters, dated the respective date of
delivery thereof, in form and substance reasonably satisfactory to you,
containing statements and information of the type included in accountants'
"comfort letters" to underwriters with respect to the financial statements and
other financial information relating to the Company and relating to Pikeville
contained in the Registration Statement and the Prospectus, in accordance with
the Statement on Auditing Standards No. 72, Letters for Underwriters and Other
Third Parties;
(e) Neither the Company nor Pikeville shall not have sustained, since the
date of the latest audited financial statements included in the Prospectus,
any loss or interference with its business from fire, explosion, flood or
other calamity, whether or not covered by insurance, or from any labor dispute
or court or governmental action, order or decree, otherwise than as set forth
or
11
contemplated in the Prospectus, and, since the respective dates as of which
information is given in the Prospectus, there shall not have been any change
in the outstanding capital stock or a material change in the long-term debt of
the Company or any change, or any development involving a prospective change,
in or affecting the business, management, financial position, shareholders'
equity or results of operations of the Company or Pikeville otherwise than as
set forth or contemplated in the Prospectus, the effect of which, in any such
case described in clause (i) or (ii) is in your reasonable judgment so
material and adverse as to make it impracticable or inadvisable to proceed
with the public offering or the delivery of the Securities being delivered at
such Delivery Date on the terms and in the manner contemplated by the
Prospectus;
(f) On or after the date hereof there shall not have occurred any of the
following: (i) a suspension or material limitation in trading in securities
generally on the New York Stock Exchange; (ii) a general moratorium on
commercial banking activities in New York declared by either federal or New
York authorities; (iii) the outbreak or escalation of hostilities involving
the United States or the declaration by the United States of a national
emergency or war, if any such event specified in this clause (iii) would have
such a materially adverse effect, in your reasonable judgment, as to make it
impracticable or inadvisable to proceed with the public offering or the
delivery of the Securities being delivered at such Delivery Date on the terms
and in the manner contemplated in the Prospectus; or (iv) such a material
adverse change in general economic, political, financial or international
conditions affecting financial markets in the United States having a material
adverse impact on trading prices of securities in general, as, in your
reasonable judgment, makes it inadvisable to proceed with the payment for and
delivery of the Securities;
(g) The Company shall have furnished to you copies of agreements between
the Company and the directors and executive officers of the Company, in form
and content reasonably satisfactory to you, pursuant to which such persons
agree not to directly or indirectly offer, sell, or otherwise dispose of, any
shares of Common Stock or Preferred Stock or any securities convertible into,
or exercisable or exchangeable for, or any rights to purchase or acquire,
shares of Common Stock or Preferred Stock, on or before the 180th day after
the date of this Agreement without your prior written consent; and
(h) The Company shall have furnished or caused to be furnished to you at
such Delivery Date certificates of officers of the Company reasonably
satisfactory to you as to the accuracy of the respective representations and
warranties of the Company herein at and as of such Delivery Date, as to the
performance by the Company of all of its obligations hereunder to be performed
at or prior to such Delivery Date, as to the matters set forth in subsection
(a) and (e) of this Section and as to such other matters as you may reasonably
request.
8. Indemnification and Contribution.
(a) The Company will indemnify and hold harmless the Underwriter against
any losses, claims, damages or liabilities, joint or several, to which the
Underwriter 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:
(i) any untrue statement or alleged untrue statement made by the
Company in Section 1(a) of this Agreement; or
(ii) an untrue statement or alleged untrue statement of a material fact
contained in any Preliminary Prospectus, the Registration Statement or the
Prospectus; or
(iii) any amendment or supplement thereto, including a registration
statement filed pursuant to Rule 462(b) of the Act or arise out of or are
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 will promptly reimburse the Underwriter for any legal or other expenses
reasonably incurred by the Underwriter in connection with investigating,
preparing to defend or defending, or appearing as a third-party witness in
connection with, any such action or claim; provided, that the Company shall not
be liable in any such case to the extent that any such loss, claim, damage or
liability arises out of or is based upon an untrue statement or alleged untrue
statement or omission or alleged omission made in any Preliminary Prospectus,
the Registration Statement or Prospectus or any such amendment or supplement in
reliance upon and in conformity with written information furnished to the
Company by you expressly for use therein; provided, further, that the foregoing
indemnity agreement with respect to any Preliminary Prospectus shall not inure
to the benefit of the Underwriter from whom the person asserting any such
losses, claims, damages or liabilities purchased Securities, or any person
controlling such Underwriter, if a copy of the Prospectus (as then amended or
supplemented if the Company shall
12
have furnished any amendments or supplements thereto) was not sent or given by
or on behalf of the Underwriter to such person, if required by law so to have
been delivered, at or prior to the written confirmation of the sale of the
Securities to such person, and if the Prospectus (as so amended or
supplemented) would have cured the defect giving rise to such losses, claims,
damages or liabilities.
(b) The Underwriter will indemnify and hold harmless the Company, each of
its directors, and each of its officers who signed the Registration Statement
against any losses, claims, damages or liabilities to which the Company 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 an untrue statement or alleged untrue statement of a material fact
contained in any Preliminary Prospectus, the Registration Statement or the
Prospectus, or any amendment or supplement thereto, including a registration
statement filed pursuant to Rule 462(b) of the Act, or arise out of or are 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,
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 any
Preliminary Prospectus, the Registration Statement or the Prospectus or any such
amendment or supplement in reliance upon and in conformity with written
information furnished to the Company by you expressly for use therein; and will
reimburse the Company for any legal or other expenses reasonably incurred by the
Company in connection with investigating, preparing to defend or defending, or
appearing as a third-party witness in connection with, any such action or claim.
The Company acknowledges that the statements set forth under the heading
"Underwriting" in the Preliminary Prospectus and the Prospectus constitute the
only information furnished in writing by or on behalf of the Underwriter for
inclusion in the Preliminary Prospectus or the Prospectus, and you confirm that
such statements are correct.
(c) Promptly after receipt by an indemnified party under subsection (a) or
(b) above of notice of the commencement of any action, such indemnified party
shall, if a claim in respect thereof is to be made against the indemnifying
party under such subsection, notify the indemnifying party in writing of the
commencement thereof; but the omission so to notify the indemnifying party
shall not relieve it from any liability which it may have to any indemnified
party otherwise than under such subsection. In case any such action shall be
brought against any indemnified party and it shall notify the indemnifying
party of the commencement thereof, the indemnifying party shall be entitled to
participate therein and, to the extent that it shall wish, jointly with any
other indemnifying party similarly notified, to assume the defense thereof,
with counsel satisfactory to such indemnified party; provided, that if the
defendants in any such action include both the indemnified party and the
indemnifying party and the indemnified party shall have been advised by counsel
that there may be legal defenses available to it and/or other indemnified
parties which are different from or additional to those available to the
indemnifying party, the indemnified party or parties shall have the right to
select separate counsel to defend such action on behalf of such indemnified
party or parties. It is understood that the indemnifying party shall, in
connection with any such action or separate but substantially similar or
related actions in the same jurisdiction arising out of the same general
allegations or circumstances, be liable for the reasonable fees and expenses of
only one separate firm of attorneys together with appropriate local counsel at
any time for all indemnified parties unless such firm of attorneys shall have
reasonably concluded that there may be legal defenses available to one
indemnified party which are different from or additional to those available to
another indemnified party. Upon receipt of notice from the indemnifying party
to such indemnified party of its election so to appoint counsel to defend such
action and approval by the indemnified party of such counsel, the indemnifying
party will not be liable for any settlement entered into without its consent
and will not be liable to such indemnified party under this Section 8 for any
legal or other expenses subsequently incurred by such indemnified party in
connection with the defense thereof unless (i) the indemnified party shall have
employed separate counsel in accordance with the proviso to the next preceding
sentence, (ii) the indemnifying party shall not have employed counsel
reasonably satisfactory to the indemnified party to represent the indemnified
party within a reasonable time after notice of commencement of the action, or
(iii) the indemnifying party has authorized the employment of counsel for the
indemnified party at the expense of the indemnifying party; and except that,
if clause (i) or (iii) is applicable, such liability shall be only in respect
of the counsel referred to in such clause (i) or (iii). Notwithstanding the
immediately preceding sentence and the first sentence of this paragraph, if at
any time an indemnified party shall have requested an indemnifying party to
reimburse the indemnified party for fees and expenses of counsel, the
indemnifying party agrees that it shall be liable for any settlement of any
proceeding effected without its written consent if (i) such settlement is
entered into more than 30 days after receipt by such indemnifying party of the
aforesaid request and (ii) such indemnifying
13
party shall not have reimbursed the indemnified party in accordance with such
request prior to the date of such settlement.
(d) If the indemnification provided for in this Section 8 is unavailable or
insufficient to hold harmless an indemnified party under subsection (a) or (b)
above in respect of any losses, claims, damages or liabilities (or actions or
proceedings in respect thereof) referred to therein, then each indemnifying
party shall contribute to the amount paid or payable by such indemnified party
as a result of such losses, claims, damages or liabilities (or actions or
proceedings in respect thereof) in such proportion as is appropriate to reflect
the relative benefits received by the Company, on the one hand, and the
Underwriter, on the other, from the offering of the Securities. If, however,
the allocation provided by the immediately preceding sentence is not permitted
by applicable law or if the indemnified party failed to give the notice required
under subsection (c) above, then each indemnifying party shall contribute to
such amount paid or payable by such indemnified party in such proportion as is
appropriate to reflect not only such relative benefits but also the relative
fault of the Company, on the one hand, and the Underwriter, on the other, in
connection with the statements or omissions which resulted in such losses,
claims, damages or liabilities (or actions or proceedings in respect thereof),
as well as any other relevant equitable considerations. The relative benefits
received by the Company, on the one hand, and the Underwriter, on the other,
shall be deemed to be in the same proportion as the total net proceeds from the
offering (after deducting the total underwriting discount, but before deducting
expenses) received by the Company bear to the total underwriting discounts and
commissions received by the Underwriter, in each case as set forth in the table
on the cover page of the Prospectus. The relative fault shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company, on the one hand, or the
Underwriter, on the other, and the parties' relative intent, knowledge, access
to information and opportunity to correct or prevent such statement or omission.
The Company and the Underwriter agree that it would not be just and equitable if
contributions pursuant to this subsection (d) were determined by pro rata
allocation or by any other method of allocation which does not take into account
the equitable considerations referred to above in this subsection (d). The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages or liabilities (or actions or proceedings in respect thereof)
referred to above in this subsection (d) shall be deemed to include any legal or
other expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this subsection (d), the Underwriter shall not 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 damages which such Underwriter has otherwise
been required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.
(e) The obligations of the Company under this Section 8 shall be in
addition to any liability which the Company may otherwise have and shall
extend, upon the same terms and conditions, to each person, if any, who
controls the Underwriter within the meaning of the Act; and the obligations of
the Underwriter under this Section 8 shall be in addition to any liability
which the Underwriter may otherwise have and shall extend, upon the same terms
and conditions, to each officer and director of the Company and to each person,
if any, who controls the Company within the meaning of the Act.
9. Default of Underwriters.
(a) If you shall default in your obligation to purchase the Securities
that it has agreed to purchase hereunder at a Delivery Date, you may in your
discretion arrange for another party or other parties to purchase such
Securities on the terms contained herein. If within 36 hours after such
default you do not arrange for the purchase of such Securities, then the
Company shall be entitled to a further period of 36 hours within which to
procure another party or other parties to purchase such Securities on such
terms. In the event that, within the respective prescribed periods, you notify
the Company that you have so arranged for the purchase of such Securities, or
the Company notifies you that they have so arranged for the purchase of such
Securities, you or the Company shall have the right to postpone such Delivery
Date for a period of not more than seven days, in order to effect whatever
changes may thereby be made necessary in the Registration Statement or the
Prospectus, or in any other documents or arrangements, and the Company agrees
to file promptly any amendments to the Registration Statement or the Prospectus
which in your opinion, exercised in consultation with ▇▇▇▇▇▇ & Bird, may
thereby be made necessary.
14
The term "Underwriter" as used in this Agreement shall include any person
substituted under this Section with like effect as if such person had
originally been a party to this Agreement with respect to such Securities.
(b) If, after giving effect to any arrangements for the purchase of the
Securities by you and the Company as provided in subsection (a) above, the
aggregate number of such Securities that remains unpurchased exceeds
one-eleventh of the aggregate number of all the Securities to be purchased at
such Delivery Date, then this Agreement (or, with respect to the Second Delivery
Date, the obligation of the Underwriter to purchase and of the Company to sell
the Optional Securities) shall thereupon terminate, without liability on the
part of the Company, except for the expenses to be borne by the Company and the
Underwriters as provided in Section 6 hereof and the indemnity and contribution
agreements in Section 8 hereof; but nothing herein shall relieve the Underwriter
from liability for its default.
10. Representations and Indemnities to Survive.
The respective indemnities, agreements, representations, warranties and other
statements of the Company and the Underwriter, as set forth in this Agreement or
made by or on behalf of them, respectively, pursuant to this Agreement, shall
remain in full force and effect, regardless of any termination or cancellation
of this Agreement or any investigation (or any statement as to the results
thereof) made by or on behalf of the Underwriter or any controlling person of
the Underwriter, or the Company, or any officer or director or controlling
person of the Company, and shall survive delivery of and payment for the
Securities.
11. Termination and Payment of Expenses.
If this Agreement shall be terminated pursuant to Section 9 or Section 7(f)
hereof, the Company shall not then be under any liability to the Underwriter
except as provided in Section 6 and Section 8 hereof; but if for any other
reason any Securities are not delivered by or on behalf of the Company as
provided herein, the Company will reimburse you for all out-of-pocket expenses,
including fees and disbursements of counsel, reasonably incurred by the
Underwriters in making preparations for the purchase, sale and delivery of the
Securities not so delivered, but the Company shall then be under no further
liability to the Underwriter except as provided in Section 6 and Section 8
hereof.
12. Notices.
All statements, requests, notices and agreements hereunder shall be in
writing or by telegram if promptly confirmed in writing, and if to the
Underwriter shall be sufficient in all respects if delivered or sent by
reliable courier, first-class mail, telex or facsimile transmission to Wheat,
First Securities, Inc., at Riverfront Plaza, ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Corporate Finance Department; if to the Company
shall be sufficient in all respects if delivered or sent by reliable courier,
first-class mail, telex, or facsimile transmission to the address of the
Company set forth in the Registration Statement, Attention: ▇▇▇ ▇. ▇▇▇▇▇, with
a copy (which shall not constitute notice) to ▇▇▇▇▇▇▇ & ▇▇▇▇▇. Any such
statements, requests, notices or agreements shall take effect upon receipt
thereof.
13. Successors.
This Agreement shall be binding upon, and inure solely to the benefit of, the
Underwriter and the Company and, to the extent provided in Sections 8 and 10
hereof, the officers and directors of the Company and each person who controls
the Company or the Underwriter, and their respective heirs, executors,
administrators, successors and assigns, and no other person shall acquire or
have any right under or by virtue of this Agreement. No purchaser of any of the
Securities from the Underwriter shall be deemed a successor or assign by reason
merely of such purchase.
14. Time of the Essence.
Time shall be of the essence in this Agreement.
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15. Business Day.
As used herein, the term "business day" shall mean any day when the
Commission's office in Washington, D.C. is open for business.
16. Applicable Law.
This Agreement shall be construed in accordance with the laws of the State of
New York without regard to its conflicts of laws provisions.
17. Captions.
The captions included in this Agreement are included solely for convenience
of reference and shall not be deemed to be a part of this Agreement.
18. Counterparts.
This Agreement may be executed by any one or more of the parties 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.
If the foregoing is in accordance with your understanding, please sign and
return to us four counterparts hereof, and upon the acceptance hereof by you,
this letter and such acceptance hereof shall constitute a binding agreement
between the Underwriter and the Company.
Very truly yours,
MATEWAN BANCSHARES, INC.
By: _____________________________________
▇▇▇ ▇. ▇▇▇▇▇
President and Chief Executive Officer
Accepted as of the date hereof
at Richmond, Virginia:
WHEAT, FIRST SECURITIES, INC.
By: __________________________
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