MFB Corp./Placement Agreement
MFB Corp./Placement Agreement
MFB CORP.
5,000 Capital Securities
Fixed/Floating Rate Capital Securities
(Liquidation Amount $1,000.00 per Capital Security)
PLACEMENT AGREEMENT
--------------------
July 29, 2005
FTN Financial Capital Markets
845 Crossover Lane, Suite 150
Memphis, Tennessee 38117
Keefe, Bruyette & Woods, Inc.
787 7th Avenue
4th Floor
New York, New York 10019
Ladies and Gentlemen:
MFB Corp., an Indiana corporation (the "Company"), and its
financing
subsidiary, MFBC Statutory Trust I, a
Delaware statutory trust (the "Trust," and
hereinafter together with the Company, the
"Offerors"), hereby confirm their
agreement (this "Agreement") with you as
placement agents (the "Placement
Agents"), as follows:
Section 1.
Issuance and Sale of Securities.
1.1. Introduction. The Offerors propose to
issue and sell at the Closing (as
defined in Section 2.3.1 hereof) 5,000 of
the Trust's Fixed/Floating Rate
Capital Securities, with a liquidation
amount of $1,000.00 per capital security
(the "Capital Securities"), to First
Tennessee Bank National Association (the
"Purchaser") pursuant to the terms of a
Subscription Agreement entered into, or
to be entered into on or prior to the
Closing Date (as defined in Section 2.3.1
hereof), between the Offerors and the
Purchaser (the "Subscription Agreement"),
the form of which is attached hereto as
Exhibit A and incorporated herein by
this reference.
1.2. Operative Agreements. The Capital
Securities shall be fully and
unconditionally guaranteed on a
subordinated basis by the Company with respect
to distributions and amounts payable upon
liquidation, redemption or repayment
(the "Guarantee") pursuant and subject to
the Guarantee Agreement (the
"Guarantee Agreement"), to be dated as of
the Closing Date and executed and
delivered by the Company and Wilmington
Trust Company ("WTC"), as trustee (the
"Guarantee Trustee"), for the benefit from
time to time of the holders of the
Capital Securities. The entire proceeds
from the sale by the Trust to the
holders of the Capital Securities shall be
combined with the entire proceeds
from the sale by the Trust to the Company
of its common securities (the "Common
Securities"), and shall be used by the
Trust to purchase $5,155,000.00 in
principal amount of the Fixed/Floating Rate
Junior Subordinated Deferrable
Interest Debentures (the "Debentures") of
the Company. The Capital Securities
and the Common Securities for the Trust
shall be issued pursuant to an Amended
and Restated Declaration of Trust among
WTC, as Delaware trustee (the "Delaware
Trustee"), WTC, as institutional trustee
(the "Institutional Trustee"), the
Administrators named therein, and the
Company, to be dated as of the Closing
Date and in substantially the form
heretofore delivered to the Placement Agents
(the "Trust Agreement"). The Debentures
shall be issued pursuant to an Indenture
(the "Indenture"), to be dated as of the
Closing Date, between the Company and
WTC, as indenture trustee (the "Indenture
Trustee"). The documents identified in
this Section 1.2 and in Section 1.1 are
referred to herein as the "Operative
Documents."
1.3. Rights of Purchaser. The Capital
Securities shall be offered and sold by
the Trust directly to the Purchaser without
registration of any of the Capital
Securities, the Debentures or the Guarantee
under the Securities Act of 1933, as
amended (the "Securities Act"), or any
other applicable securities laws in
reliance upon exemptions from the
registration requirements of the Securities
Act and other applicable securities laws.
The Offerors agree that this Agreement
shall be incorporated by reference into the
Subscription Agreement and the
Purchaser shall be entitled to each of the
benefits of the Placement Agents and
the Purchaser under this Agreement and
shall be entitled to enforce obligations
of the Offerors under this Agreement as
fully as if the Purchaser were a party
to this Agreement. The Offerors and the
Placement Agents have entered into this
Agreement to set forth their understanding
as to their relationship and their
respective rights, duties and
obligations.
1.4. Legends. Upon original issuance
thereof, and until such time as the same is
no longer required under the applicable
requirements of the Securities Act, the
Capital Securities and Debentures
certificates shall each contain a legend as
required pursuant to any of the Operative
Documents.
Section 2.
Purchase of Capital Securities.
2.1. Exclusive Rights; Purchase Price. From
the date hereof until the Closing
Date (which date may be extended by mutual
agreement of the Offerors and the
Placement Agents), the Offerors hereby
grant to the Placement Agents the
exclusive right to arrange for the sale of
the Capital Securities to the
Purchaser at a purchase price of $1,000.00
per Capital Security.
2.2. Subscription Agreement. The Offerors
hereby agree to evidence their
acceptance of the subscription by
countersigning a copy of the Subscription
Agreement and returning the same to the
Placement Agents.
2.3. Closing and Delivery of Payment.
2.3.1. Closing; Closing Date. The sale and
purchase of the Capital Securities by
the Offerors to the Purchaser shall take
place at a closing (the "Closing") at
the offices of Lewis, Rice & Fingersh,
L.C., at 10:00 a.m. (St. Louis time) on
July 28, 2005, or such other business day
as may be agreed upon by the Offerors
and the Placement Agents (the "Closing
Date"). Payment by the Purchaser shall be
payable in the manner set forth in
the Subscription Agreement and shall be made
prior to or on the Closing
Date.
2.3.2. Delivery. The certificate for the
Capital Securities shall be in
definitive form, registered in the name of
the Purchaser, or the Purchaser's
designee, and in the aggregate amount of
the Capital Securities purchased by the
Purchaser.
2.3.3. Transfer Agent. The Offerors shall
deposit the certificate representing
the Capital Securities with the
Institutional Trustee or other appropriate party
prior to the Closing Date.
2.4. Costs and Expenses. Whether or not
this Agreement is terminated or the sale
of the Capital Securities is consummated,
the Company hereby covenants and
agrees that it shall pay or cause to be
paid (directly or by reimbursement) all
reasonable costs and expenses incident to
the performance of the obligations of
the Offerors under this Agreement,
including all fees, expenses and
disbursements of counsel and accountants
for the Offerors; all reasonable
expenses incurred by the Offerors incident
to the preparation, execution and
delivery of the Trust Agreement, the
Indenture, and the Guarantee; and all other
reasonable costs and expenses incident to
the performance of the obligations of
the Company hereunder and under the Trust
Agreement.
2.5. Failure to Close. If any of the
conditions to the Closing specified in this
Agreement shall not have been fulfilled to
the satisfaction of the Placement
Agents or if the Closing shall not have
occurred on or before 10:00 a.m. (St.
Louis time) on July 29, 2005, then each
party hereto, notwithstanding anything
to the contrary in this Agreement, shall be
relieved of all further obligations
under this Agreement without thereby
waiving any rights it may have by reason of
such nonfulfillment or failure; provided,
however, that the obligations of the
parties under Sections 2.4, 7.5 and 9 shall
not be so relieved and shall
continue in full force and effect.
Section 3. Closing Conditions. The
obligations of the Purchaser and the
Placement Agents on the Closing Date shall
be subject to the accuracy, at and as
of the Closing Date, of the representations
and warranties of the Offerors
contained in this Agreement, to the
accuracy, at and as of the Closing Date, of
the statements of the Offerors made in any
certificates pursuant to this
Agreement, to the performance by the
Offerors of their respective obligations
under this Agreement, to compliance, at and
as of the Closing Date, by the
Offerors with their respective agreements
herein contained, and to the following
further conditions:
3.1. Opinions of Counsel. On the Closing
Date, the Placement Agents shall have
received the following favorable opinions,
each dated as of the Closing Date:
(a) from Barnes & Thornburg LLP,
counsel for the Offerors and addressed to the
Purchaser, the Placement Agents and WTC in
substantially the form set forth on
Exhibit B-1 attached hereto and
incorporated herein by this reference, (b) from
Richards, Layton & Finger, P.A.,
special Delaware counsel to the Offerors and
addressed to the Purchaser, the Placement
Agents and the Offerors, in
substantially the form set forth on Exhibit
B-2 attached hereto and incorporated
herein by this reference and (c) from
Lewis, Rice & Fingersh, L.C., special tax
counsel to the Offerors, and addressed to
the Placement Agents and the Offerors,
addressing the items set forth on Exhibit
B-3 attached hereto and incorporated
herein by this reference, subject to the
receipt by Lewis, Rice & Fingersh, L.C.
of a representation letter from the Company
in the form set forth in Exhibit B-3
completed in a manner reasonably
satisfactory to Lewis, Rice & Fingersh, L.C.
(collectively, the "Offerors' Counsel
Opinions"). In rendering the Offerors'
Counsel Opinions, counsel to the Offerors
may rely as to factual matters upon
certificates or other documents furnished
by officers, directors and trustees of
the Offerors (copies of which shall be
delivered to the Placement Agents and the
Purchaser) and by government officials, and
upon such other documents as counsel
to the Offerors may, in their reasonable
opinion, deem appropriate as a basis
for the Offerors' Counsel Opinions. Counsel
to the Offerors may specify the
jurisdictions in which they are admitted to
practice and that they are not
admitted to practice in any other
jurisdiction and are not experts in the law of
any other jurisdiction. If the Offerors'
counsel is not admitted to practice in
the State of New York, the opinion of
Offerors' counsel may assume, for purposes
of the opinion, that the laws of the State
of New York are substantively
identical, in all respects material to the
opinion, to the internal laws of the
state in which such counsel is admitted to
practice. Such Offerors' Counsel
Opinions shall not state that they are to
be governed or qualified by, or that
they are otherwise subject to, any
treatise, written policy or other document
relating to legal opinions, including,
without limitation, the Legal Opinion
Accord of the ABA Section of Business Law
(1991).
3.2. Officer's Certificate. At the Closing
Date, the Purchaser and the Placement
Agents shall have received certificates
from an authorized officer of the
Company, dated as of the Closing Date,
stating that (i) the representations and
warranties of the Offerors set forth in
Section 5 hereof are true and correct as
of the Closing Date and that the Offerors
have complied with all agreements and
satisfied all conditions on their part to
be performed or satisfied at or prior
to the Closing Date, (ii) since the date of
this Agreement the Offerors have not
incurred any liability or obligation,
direct or contingent, or entered into any
material transactions, other than in the
ordinary course of business, which is
material to the Offerors, and (iii)
covering such other matters as the Placement
Agents may reasonably request.
3.3. Administrator's Certificate. At the
Closing Date, the Purchaser and the
Placement Agents shall have received a
certificate of one or more Administrators
of the Trust, dated as of the Closing Date,
stating that the representations and
warranties of the Trust set forth in
Section 5 are true and correct as of the
Closing Date and that the Trust has
complied with all agreements and satisfied
all conditions on its part to be performed
or satisfied at or prior to the
Closing Date.
3.4. Purchase Permitted by Applicable Laws;
Legal Investment. The purchase of
and payment for the Capital Securities as
described in this Agreement and
pursuant to the Subscription Agreement
shall (a) not be prohibited by any
applicable law or governmental regulation,
(b) not subject the Purchaser or the
Placement Agents to any penalty or, in the
reasonable judgment of the Purchaser
and the Placement Agents, other onerous
conditions under or pursuant to any
applicable law or governmental regulation,
and (c) be permitted by the laws and
regulations of the jurisdictions to which
the Purchaser and the Placement Agents
are subject.
3.5. Consents and Permits. The Company and
the Trust shall have received all
consents, permits and other authorizations,
and made all such filings and
declarations, as may be required from any
person or entity pursuant to any law,
statute, regulation or rule (federal,
state, local and foreign), or pursuant to
any agreement, order or decree to which the
Company or the Trust is a party or
to which either is subject, in connection
with the transactions contemplated by
this Agreement.
3.6. Information. Prior to or on the
Closing Date, the Offerors shall have
furnished to the Placement Agents such
further information, certificates,
opinions and documents addressed to the
Purchaser and the Placement Agents,
which the Placement Agents may reasonably
request, including, without
limitation, a complete set of the Operative
Documents or any other documents or
certificates required by this Section 3;
and all proceedings taken by the
Offerors in connection with the issuance,
offer and sale of the Capital
Securities as herein contemplated shall be
reasonably satisfactory in form and
substance to the Placement Agents.
If any condition specified in this Section 3 shall not have
been
fulfilled when and as required in this
Agreement, or if any of the opinions or
certificates mentioned above or elsewhere
in this Agreement shall not be
reasonably satisfactory in form and
substance to the Placement Agents, this
Agreement may be terminated by the
Placement Agents by notice to the Offerors at
any time at or prior to the Closing Date.
Notice of such termination shall be
given to the Offerors in writing or by
telephone or facsimile confirmed in
writing.
Section 4. Conditions to the Offerors'
Obligations. The obligations of the
Offerors to sell the Capital Securities to
the Purchaser and consummate the
transactions contemplated by this Agreement
shall be subject to the accuracy, at
and as of the Closing Date, of the
representations and warranties of the
Placement Agents contained in this
Agreement and to the following further
conditions:
4.1. Executed Agreement. The Offerors shall
have received from the Placement
Agents an executed copy of this
Agreement.
4.2. Fulfillment of Other Obligations. The
Placement Agents shall have fulfilled
all of their other obligations and duties
required to be fulfilled under this
Agreement prior to or at the Closing.
Section 5. Representations and Warranties
of the Offerors. Except as set forth
on the Disclosure Schedule (as defined in
Section 11.1) attached hereto, if any,
the Offerors jointly and severally
represent and warrant to the Placement Agents
and the Purchaser as of the date hereof and
as of the Closing Date as follows:
5.1. Securities Law Matters.
(a) Neither the Company nor the Trust, nor
any of their "Affiliates" (as defined
in Rule 501(b) of Regulation D under the
Securities Act ("Regulation D")), nor
any person acting on any of their behalf
has, directly or indirectly, made
offers or sales of any security, or
solicited offers to buy any security, under
circumstances that would require the
registration under the Securities Act of
any of the Capital Securities, the
Guarantee or the Debentures (collectively,
the "Securities") or any other securities
to be issued, or which may be issued,
by the Purchaser.
(b) Neither the Company nor the Trust, nor
any of their Affiliates, nor any
person acting on its or their behalf has
(i) other than the Placement Agents,
offered for sale or solicited offers to
purchase the Securities, or (ii) engaged
in any form of offering, general
solicitation or general advertising (within the
meaning of Regulation D) in connection with
any offer or sale of any of the
Securities.
(c) The Securities satisfy the eligibility
requirements of Rule 144A(d)(3) under
the Securities Act.
(d) Neither the Company nor the Trust is
or, after giving effect to the offering
and sale of the Capital Securities and the
consummation of the transactions
described in this Agreement, will be an
"investment company" or an entity
"controlled" by an "investment company," in
each case within the meaning of
Section 3(a) of the Investment Company Act
of 1940, as amended (the "Investment
Company Act"), without regard to Section
3(c) of the Investment Company Act.
(e) Neither the Company nor the Trust has
paid or agreed to pay to any person or
entity (other than the Placement Agents)
any compensation for soliciting another
to purchase any of the Securities.
5.2. Organization, Standing and
Qualification of the Trust. The Trust has been
duly created and is validly existing in
good standing as a statutory trust under
the Delaware Statutory Trust Act (the
"Statutory Trust Act") with the power and
authority to own property and to conduct
the business it transacts and proposes
to transact and to enter into and perform
its obligations under the Operative
Documents. The Trust is duly qualified to
transact business as a foreign entity
and is in good standing in each
jurisdiction in which such qualification is
necessary, except where the failure to so
qualify or be in good standing would
not have a material adverse effect on the
Trust. The Trust is not a party to or
otherwise bound by any agreement other than
the Operative Documents. The Trust
is and will, under current law, be
classified for federal income tax purposes as
a grantor trust and not as an association
taxable as a corporation.
5.3. Trust Agreement. The Trust Agreement
has been duly authorized by the
Company and, on the Closing Date, will have
been duly executed and delivered by
the Company and the Administrators of the
Trust, and, assuming due
authorization, execution and delivery by
the Delaware Trustee and the
Institutional Trustee, will be a valid and
binding obligation of the Company and
such Administrators, enforceable against
them in accordance with its terms,
subject to (a) applicable bankruptcy,
insolvency, moratorium, receivership,
reorganization, liquidation and other laws
relating to or affecting creditors'
rights generally, and (b) general
principles of equity (regardless of whether
considered and applied in a proceeding in
equity or at law) ("Bankruptcy and
Equity"). Each of the Administrators of the
Trust is an employee or a director
of the Company or of a financial
institution subsidiary of the Company and has
been duly authorized by the Company to
execute and deliver the Trust Agreement.
5.4. Guarantee Agreement and the Indenture.
Each of the Guarantee and the
Indenture has been duly authorized by the
Company and, on the Closing Date will
have been duly executed and delivered by
the Company, and, assuming due
authorization, execution and delivery by
the Guarantee Trustee, in the case of
the Guarantee, and by the Indenture
Trustee, in the case of the Indenture, will
be a valid and binding obligation of the
Company enforceable against it in
accordance with its terms, subject to
Bankruptcy and Equity.
5.5. Capital Securities and Common
Securities. The Capital Securities and the
Common Securities have been duly authorized
by the Trust Agreement and, when
issued and delivered against payment
therefor on the Closing Date to the
Purchaser, in the case of the Capital
Securities, and to the Company, in the
case of the Common Securities, will be
validly issued and represent undivided
beneficial interests in the assets of the
Trust. None of the Capital Securities
or the Common Securities is subject to
preemptive or other similar rights. On
the Closing Date, all of the issued and
outstanding Common Securities will be
directly owned by the Company free and
clear of any pledge, security interest,
claim, lien or other encumbrance.
5.6. Debentures. The Debentures have been
duly authorized by the Company and, at
the Closing Date, will have been duly
executed and delivered to the Indenture
Trustee for authentication in accordance
with the Indenture, and, when
authenticated in the manner provided for in
the Indenture and delivered against
payment therefor by the Trust, will
constitute valid and binding obligations of
the Company entitled to the benefits of the
Indenture enforceable against the
Company in accordance with their terms,
subject to Bankruptcy and Equity, except
as any indemnification or contribution
provisions may be limited by public
policy or under applicable securities
laws.
5.7. Power and Authority. This Agreement
has been duly authorized, executed and
delivered by the Company and the Trust and
constitutes the valid and binding
obligation of the Company and the Trust,
enforceable against the Company and the
Trust in accordance with its terms, subject
to Bankruptcy and Equity.
5.8. No Defaults. The Trust is not in
violation of the Trust Agreement or, to
the knowledge of the Administrators, any
provision of the Statutory Trust Act.
The execution, delivery and performance by
the Company or the Trust of this
Agreement or the Operative Documents to
which it is a party, and the
consummation of the transactions
contemplated herein or therein and the use of
the proceeds therefrom, will not conflict
with or constitute a breach of, or a
default under, or result in the creation or
imposition of any lien, charge or
other encumbrance upon any property or
assets of the Trust, the Company or any
of the Company's Subsidiaries (as defined
in Section 5.11 hereof) pursuant to
any contract, indenture, mortgage, loan
agreement, note, lease or other
instrument to which the Trust, the Company
or any of its Subsidiaries is a party
or by which it or any of them may be bound,
or to which any of the property or
assets of any of them is subject, except
for a conflict, breach, default, lien,
charge or encumbrance which could not,
singly or in the aggregate, reasonably be
expected to have a Material Adverse Effect
nor will such action result in any
violation of the Trust Agreement or the
Statutory Trust Act or require the
consent, approval, authorization or order
of any court or governmental agency or
body. As used herein, the term "Material
Adverse Effect" means any one or more
effects that individually or in the
aggregate are material and adverse to the
Offerors' ability to consummate the
transactions contemplated herein or in the
Operative Documents or any one or more
effects that individually or in the
aggregate are material and adverse to the
condition (financial or otherwise),
earnings, affairs, business, prospects or
results of operations of the Company
and its Subsidiaries taken as whole,
whether or not occurring in the ordinary
course of business.
5.9. Organization, Standing and
Qualification of the Company. The Company has
been duly incorporated and is validly
existing as a corporation in good standing
under the laws of Indiana, with all
requisite corporate power and authority to
own its properties and conduct the business
it transacts and proposes to
transact, and is duly qualified to transact
business and is in good standing as
a foreign corporation in each jurisdiction
where the nature of its activities
requires such qualification, except where
the failure of the Company to be so
qualified would not, singly or in the
aggregate, have a Material Adverse Effect.
5.10. Subsidiaries of the Company. Each of
the Company's significant
subsidiaries (as defined in Section 1-02(w)
of Regulation S-X to the Securities
Act (the "Significant Subsidiaries")) is
listed in Exhibit C attached hereto and
incorporated herein by this reference. Each
Significant Subsidiary has been duly
organized and is validly existing and in
good standing under the laws of the
jurisdiction in which it is chartered or
organized, with all requisite power and
authority to own its properties and conduct
the business it transacts and
proposes to transact, and is duly qualified
to transact business and is in good
standing as a foreign entity in each
jurisdiction where the nature of its
activities requires such qualification,
except where the failure of any such
Significant Subsidiary to be so qualified
would not, singly or in the aggregate,
have a Material Adverse Effect. All of the
issued and outstanding shares of
capital stock of the Significant
Subsidiaries (a) have been duly authorized and
are validly issued, (b) are fully paid and
nonassessable, and (c) are wholly
owned, directly or indirectly, by the
Company free and clear of any security
interest, mortgage, pledge, lien,
encumbrance, restriction upon voting or
transfer, preemptive rights, claim, equity
or other defect.
5.11. Permits. The Company and each of its
subsidiaries (as defined in Section
1-02(x) of Regulation S-X to the Securities
Act) (the "Subsidiaries") have all
requisite power and authority, and all
necessary authorizations, approvals,
orders, licenses, certificates and permits
of and from regulatory or
governmental officials, bodies and
tribunals, to own or lease their respective
properties and to conduct their respective
businesses as now being conducted,
except such authorizations, approvals,
orders, licenses, certificates and
permits which, if not obtained and
maintained, would not, singly or in the
aggregate, have a Material Adverse Effect,
and neither the Company nor any of
its Subsidiaries has received any notice of
proceedings relating to the
revocation or modification of any such
authorizations, approvals, orders,
licenses, certificates or permits which,
singly or in the aggregate, if the
failure to be so licensed or approved is
the subject of an unfavorable decision,
ruling or finding, would, singly or in the
aggregate, have a Material Adverse
Effect; and the Company and its
Subsidiaries are in compliance with all
applicable laws, rules, regulations and
orders and consents, the violation of
which would, singly or in the aggregate,
have a Material Adverse Effect.
5.12. Conflicts, Authorizations and
Approvals. Neither the Company nor any of
its Subsidiaries is in violation of its
respective articles or certificate of
incorporation, charter or by-laws or
similar organizational documents or in
default in the performance or observance of
any obligation, agreement, covenant
or condition contained in any contract,
indenture, mortgage, loan agreement,
note, lease or other agreement or
instrument to which either the Company or any
of its Subsidiaries is a party, or by which
it or any of them may be bound or to
which any of the property or assets of the
Company or any of its Subsidiaries is
subject, the effect of which violation or
default in performance or observance
would have, singly or in the aggregate, a
Material Adverse Effect.
5.13. Holding Company Registration and
Deposit Insurance. The Company is duly
registered (i) as a bank holding company or
financial holding company under the
Bank Holding Company Act of 1956, as
amended, and the regulations of the Board
of Governors of the Federal Reserve System
(the "Federal Reserve") or (ii) as a
savings and loan holding company under the
Home Owners' Loan Act of 1933, as
amended, and the regulations of the Office
of Thrift Supervision (the "OTS"),
and the deposit accounts of the Company's
Subsidiary depository institutions are
insured by the Federal Deposit Insurance
Corporation ("FDIC") to the fullest
extent permitted by law and the rules and
regulations of the FDIC, and no
proceedings for the termination of such
insurance are pending or threatened.
5.14. Financial Statements.
(a) The consolidated balance sheets of the
Company and all of its Subsidiaries
as of September 30, 2004 and September 30,
2003 and related consolidated income
statements and statements of changes in
shareholders' equity for the three years
ended September 30, 2004 together with the
notes thereto, and the consolidated
balance sheets of the Company and all of
its Subsidiaries as of March 31, 2005
and the related consolidated income
statements and statements of changes in
shareholders' equity for the six months
then ended, copies of each of which have
been provided to the Placement Agents
(together, the "Financial Statements"),
have been prepared in accordance with
generally accepted accounting principles
applied on a consistent basis (except as
may be disclosed therein) and fairly
present in all material respects the
financial position and the results of
operations and changes in shareholders'
equity of the Company and all of its
Subsidiaries as of the dates and for the
periods indicated (subject, in the case
of interim financial statements, to normal
recurring year-end adjustments, none
of which shall be material). The books and
records of the Company and all of its
Subsidiaries have been, and are being,
maintained in all material respects in
accordance with generally accepted
accounting principles and any other
applicable legal and accounting
requirements and reflect only actual
transactions.
(b) The information in the Company's most
recently filed (i) FR Y-9C filed with
the Federal Reserve if the Company is a
bank holding company, (ii) FR Y-9SP
filed with the Federal Reserve if the
Company is a small bank holding company or
(iii) H-(b)11 filed with the OTS if the
Company is a savings and loan holding
company (the "Regulatory Report"),
previously provided to the Placement Agents
fairly presents in all material respects
the financial position of the Company
and, where applicable, all of its
Subsidiaries as of the end of the period
represented by such Regulatory Report.
(c) Since the respective dates of the
Financial Statements and the Regulatory
Report, there has been no material adverse
change or development with respect to
the financial condition or earnings of the
Company and all of its Subsidiaries,
taken as a whole, other than matters which
have been reported in publicly
available filings made by the Company under
the Securities Exchange Act of 1934.
(d) The accountants of the Company who
certified the Financial Statements are
independent public accountants of the
Company and its Subsidiaries within the
meaning of the Securities Act and the rules
and regulations thereunder.
5.15. Exchange Act Reporting. The reports
filed with the Securities and Exchange
Commission (the "Commission") by the
Company under the Securities Exchange Act
of 1934, as amended (the "1934 Act") and
the regulations thereunder at the time
they were filed with the Commission
complied as to form in all material respects
with the requirements of the 1934 Act and
such reports did not contain an untrue
statement of a material fact or omit to
state a material fact required to be
stated therein or necessary to make the
statements therein, in light of the
circumstances in which they were made, not
misleading.
5.16. Regulatory Enforcement Matters.
Neither the Company nor any of its
Subsidiaries is subject or is party to, or
has received any notice or advice
that any of them may become subject or
party to, any investigation with respect
to, any cease-and-desist order, agreement,
consent agreement, memorandum of
understanding or other regulatory
enforcement action, proceeding or order with
or by, or is a party to any commitment
letter or similar undertaking to, or is
subject to any directive by, or has been
since January 1, 2002, a recipient of
any supervisory letter from, or since
January 1, 2002, has adopted any board
resolutions at the request of, any
Regulatory Agency (as defined below) that
currently restricts in any material respect
the conduct of their business or
that in any material manner relates to
their capital adequacy, their credit
policies, their ability or authority to pay
dividends or make distributions to
their shareholders or make payments of
principal or interest on their debt
obligations, their management or their
business (each, a "Regulatory
Agreement"), nor has the Company or any of
its Subsidiaries been advised since
January 1, 2002, by any Regulatory Agency
that it is considering issuing or
requesting any such Regulatory Agreement.
There is no material unresolved
violation, criticism or exception by any
Regulatory Agency with respect to any
report or statement relating to any
examinations of the Company or any of its
Subsidiaries. As used herein, the term
"Regulatory Agency" means any federal or
state agency charged with the supervision
or regulation of depository
institutions, bank, financial or savings
and loan holding companies, or engaged
in the insurance of depository institution
deposits, or any court,
administrative agency or commission or
other governmental agency, authority or
instrumentality having supervisory or
regulatory authority with respect to the
Company or any of its Subsidiaries. Neither
the Company nor any of the
Subsidiaries is currently unable to pay
dividends or make distributions to its
shareholders with respect to any class of
its equity securities, or prohibited
from paying principal or interest on its
debt obligations, due to a restriction
or limitation, whether by statute, contract
or otherwise, and, in the reasonable
judgment of the Company's management,
neither the Company nor any of the
Subsidiaries will be unable in the
foreseeable future to pay dividends or make
distributions with respect to any class of
equity securities, or be prohibited
from paying principal or interest on its
debt obligations, due to a restriction
or limitation, whether by statute, contract
or otherwise.
5.17. No Material Change. Since September
30, 2004, there has been no material
adverse change or development with respect
to the condition (financial or
otherwise), earnings, affairs, business,
prospects or results of operations of
the Company or its Subsidiaries on a
consolidated basis, whether or not arising
in the ordinary course of business other
than matters which havew been reported
in publicly available filings made by the
Company under the Securities Exchange
Act 1934.
5.18. No Undisclosed Liabilities. Neither
the Company nor any of its
Subsidiaries has any material liability,
whether known or unknown, whether
asserted or unasserted, whether absolute or
contingent, whether accrued or
unaccrued, whether liquidated or
unliquidated, and whether due or to become due,
including any liability for taxes (and
there is no past or present fact,
situation, circumstance, condition or other
basis for any present or future
action, suit, proceeding, hearing, charge,
complaint, claim or demand against
the Company or its Subsidiaries giving rise
to any such liability), except (i)
for liabilities set forth in the Financial
Statements and (ii) normal
fluctuation in the amount of the
liabilities referred to in clause (i) above
occurring in the ordinary course of
business of the Company and all of its
Subsidiaries since the date of the most
recent balance sheet included in the
Financial Statements.
5.19. Litigation. No charge, investigation,
action, suit or proceeding is
pending or, to the knowledge of the
Offerors, threatened against or affecting
the Company or its Subsidiaries or any of
their respective properties before or
by any courts or any regulatory,
administrative or governmental official,
commission, board, agency or other
authority or body, or any arbitrator, wherein
an unfavorable decision, ruling or finding
could have, singly or in the
aggregate, a Material Adverse Effect.
5.20. Deferral of Interest Payments on
Debentures. The Company has no present
intention to exercise its option to defer
payments of interest on the Debentures
as provided in the Indenture. The Company
believes that the likelihood that it
would exercise its right to defer payments
of interest on the Debentures as
provided in the Indenture at any time
during which the Debentures are
outstanding is remote because of the
restrictions that would be imposed on the
Company's ability to declare or pay
dividends or distributions on, or to redeem,
purchase, acquire or make a liquidation
payment with respect to, any of the
Company's capital stock and on the
Company's ability to make any payments of
principal, interest or premium on, or
repay, repurchase or redeem, any of its
debt securities that rank pari passu in all
respects with, or junior in interest
to, the Debentures.
Section 6. Representations and Warranties
of the Placement Agents. Each
Placement Agent represents and warrants to
the Offerors as to itself (but not as
to the other Placement Agent) as
follows:
6.1. Organization, Standing and
Qualification.
(a) FTN Financial Capital Markets is a
division of First Tennessee Bank National
Association, a national banking association
duly organized, validly existing and
in good standing under the laws of the
United States, with full power and
authority to own, lease and operate its
properties and conduct its business as
currently being conducted. FTN Financial
Capital Markets is duly qualified to
transact business as a foreign corporation
and is in good standing in each other
jurisdiction in which it owns or leases
property or conducts its business so as
to require such qualification and in which
the failure to so qualify would,
individually or in the aggregate, have a
material adverse effect on the
condition (financial or otherwise),
earnings, business, prospects or results of
operations of FTN Financial Capital
Markets.
(b) Keefe, Bruyette & Woods, Inc. is a
corporation duly organized, validly
existing and in good standing under the
laws of the State of New York, with full
power and authority to own, lease and
operate its properties and conduct its
business as currently being conducted.
Keefe, Bruyette & Woods, Inc. is duly
qualified to transact business as a foreign
corporation and is in good standing
in each other jurisdiction in which it owns
or leases property or conducts its
business so as to require such
qualification and in which the failure to so
qualify would, individually or in the
aggregate, have a material adverse effect
on the condition (financial or otherwise),
earnings, business, prospects or
results of operations of Keefe, Bruyette
& Woods, Inc.
6.2. Power and Authority. The Placement
Agent has all requisite power and
authority to enter into this Agreement, and
this Agreement has been duly and
validly authorized, executed and delivered
by the Placement Agent and
constitutes the legal, valid and binding
agreement of the Placement Agent,
enforceable against the Placement Agent in
accordance with its terms, subject to
Bankruptcy and Equity and except as any
indemnification or contribution
provisions thereof may be limited under
applicable securities laws.
6.3. General Solicitation. In the case of
the offer and sale of the Capital
Securities and Common Securities, no form
of general solicitation or general
advertising was used by the Placement Agent
or its representatives including,
but not limited to, advertisements,
articles, notices or other communications
published in any newspaper, magazine or
similar medium or broadcast over
television or radio or any seminar or
meeting whose attendees have been invited
by any general solicitation or general
advertising.
6.4. Purchaser. The Placement Agent has
made such reasonable inquiry as is
necessary to determine that the Purchaser
is acquiring the Capital Securities
for its own account, except as contemplated
in Section 7.8 hereto, and that the
Purchaser does not intend to distribute the
Capital Securities in contravention
of the Securities Act or any other
applicable securities laws.
6.5. Qualified Purchasers. The Placement
Agent has not offered or sold and will
not arrange for the offer or sale of the
Capital Securities and Common
Securities except (i) to those the
Placement Agent reasonably believes are
"accredited investors" (as defined in Rule
501 of Regulation D), or (ii) in any
other manner that does not require
registration of the Capital Securities or
Common Securities under the Securities Act.
In connection with each such sale,
the Placement Agent has taken or will take
reasonable steps to ensure that the
Purchaser is aware that (a) such sale is
being made in reliance on an exemption
under the Securities Act and (b) future
transfers of the Capital Securities will
not be made except in compliance with
applicable securities laws.
6.6. Offering Circulars. Neither the
Placement Agent nor its representatives
will include any non-public information
about the Company, the Trust or any of
their Affiliates in any registration
statement, prospectus, offering circular or
private placement memorandum used in
connection with any purchase of Capital
Securities without the prior written
consent of the Trust and the Company.
Section 7. Covenants of the Offerors. The
Offerors covenant and agree with the
Placement Agents and the Purchaser as
follows:
7.1. Compliance with Representations and
Warranties. During the period from the
date of this Agreement to the Closing Date,
the Offerors shall use their best
efforts and take all action necessary or
appropriate to cause their
representations and warranties contained in
Section 5 hereof to be true as of
the Closing Date, after giving effect to
the transactions contemplated by this
Agreement, as if made on and as of the
Closing Date.
7.2. Sale and Registration of Securities.
The Offerors and their Affiliates
shall not nor shall any of them permit any
person acting on their behalf (other
than the Placement Agents), to directly or
indirectly (i) sell, offer for sale
or solicit offers to buy or otherwise
negotiate in respect of any security (as
defined in the Securities Act) that would
or could be integrated with the sale
of the Capital Securities in a manner that
would require the registration under
the Securities Act of the Securities or
(ii) make offers or sales of any such
Security, or solicit offers to buy any such
Security, under circumstances that
would require the registration of any of
such Securities under the Securities
Act.
7.3. Use of Proceeds. The Trust shall use
the proceeds from the sale of the
Capital Securities and the Common
Securities to purchase the Debentures from the
Company.
7.4. Investment Company. The Offerors shall
not engage, or permit any Subsidiary
to engage, in any activity which would
cause it or any Subsidiary to be an
"investment company" under the provisions
of the Investment Company Act.
7.5. Reimbursement of Expenses. If the sale
of the Capital Securities provided
for herein is not consummated (i) because
any condition set forth in Section 3
hereof is not satisfied, or (ii) because of
any refusal, inability or failure on
the part of the Company or the Trust to
perform any agreement herein or comply
with any provision hereof other than by
reason of a breach by the Placement
Agents, the Company shall reimburse the
Placement Agents upon demand for all of
their pro rata share of out-of-pocket
expenses (including reasonable fees and
disbursements of counsel) in an amount not
to exceed $50,000.00 that shall have
been incurred by them in connection with
the proposed purchase and sale of the
Capital Securities. Notwithstanding the
foregoing, the Company shall have no
obligation to reimburse the Placement
Agents for their out-of-pocket expenses if
the sale of the Capital Securities fails to
occur because the Placement Agents
fail to fulfill a condition set forth in
Section 4.
7.6. Solicitation and Advertising. In
connection with any offer or sale of any
of the Securities, the Offerors shall not,
nor shall either of them permit any
of their Affiliates or any person acting on
their behalf, other than the
Placement Agents, to engage in any form of
general solicitation or general
advertising (as defined in Regulation
D).
7.7. Compliance with Rule 144A(d)(4) under
the Securities Act. So long as any of
the Securities are outstanding and are
"restricted securities" within the
meaning of Rule 144(a)(3) under the
Securities Act, the Offerors will, during
any period in which they are not subject to
and in compliance with Section 13 or
15(d) of the Securities Exchange Act of
1934, as amended (the "Exchange Act"),
or the Offerors are not exempt from such
reporting requirements pursuant to and
in compliance with Rule 12g3-2(b) under the
Exchange Act, provide to each holder
of such restricted securities and to each
prospective purchaser (as designated
by such holder) of such restricted
securities, upon the request of such holder
or prospective purchaser in connection with
any proposed transfer, any
information required to be provided by Rule
144A(d)(4) under the Securities Act,
if applicable. This covenant is intended to
be for the benefit of the holders,
and the prospective purchasers designated
by such holders, from time to time of
such restricted securities. The information
provided by the Offerors pursuant to
this Section 7.7 will not, at the date
thereof, contain any untrue statement of
a material fact or omit to state any
material fact necessary to make the
statements therein, in light of the
circumstances under which they were made,
not misleading.
7.8. Transfer Notice. The Offerors
acknowledge that the Purchaser may transfer
the Capital Securities, in whole or in
part, at any time and from time to time
following the Closing Date by delivering
the notice (the "Transfer Notice")
attached as Exhibit B to the Master
Custodian Agreement, dated May 27, 2004 and
attached as Exhibit A to the Subscription
Agreement. In order to facilitate such
transfer, the Company shall execute in
blank five additional Capital Securities
certificates, to be delivered at Closing,
such certificates to be completed with
the name of the transferee(s) to which the
Capital Securities, in whole or in
part, will be transferred upon the receipt
of a Transfer Notice and
authenticated by the Institutional Trustee
at the time of each such transfer.
7.9. Quarterly Reports. Within 50 days of
the end of each calendar year quarter
and within 100 days of the end of each
calendar year during which the Debentures
are issued and outstanding and Purchaser
holds any of the Capital Securities,
the Offerors shall submit to Purchaser a
completed quarterly report in the form
attached hereto as Exhibit D as well as a
copy of the applicable Regulatory
Report for the Company. If the Purchaser
transfers the Capital Securities as
contemplated under Section 7.8, in addition
to the reporting obligations of the
Offerors to Purchaser provided for in this
Section 7.9, the Offerors shall
submit to the trustee designated in the
Transfer Notice such periodic reports as
may be required by such trustee in the form
and at such times as such trustee
may require. The Offerors acknowledge and
agree that such designated trustee and
its successors and assigns are third party
beneficiaries of this Section 7.9.
Section 8. Covenants of the Placement
Agents. The Placement Agents covenant and
agree with the Offerors that, during the
period from the date of this Agreement
to the Closing Date, the Placement Agents
shall use their best efforts and take
all action necessary or appropriate to
cause their representations and
warranties contained in Section 6 to be
true as of Closing Date, after giving
effect to the transactions contemplated by
this Agreement, as if made on and as
of the Closing Date. The Placement Agents
further covenant and agree not to
engage in hedging transactions with respect
to the Capital Securities unless
such transactions are conducted in
compliance with the Securities Act.
Section 9.
Indemnification.
9.1. Indemnification Obligation. The
Offerors shall jointly and severally
indemnify and hold harmless the Placement
Agents and the Purchaser and each of
their respective agents, employees,
officers and directors and each person that
controls either of the Placement Agents or
the Purchaser within the meaning of
Section 15 of the Securities Act or Section
20 of the Exchange Act, and agents,
employees, officers and directors or any
such controlling person of either of
the Placement Agents or the Purchaser (each
such person or entity, an
"Indemnified Party") from and against any
and all losses, claims, damages,
judgments, liabilities or expenses, joint
or several, to which such Indemnified
Party may become subject under the
Securities Act, the Exchange Act or other
federal or state statutory law or
regulation, or at common law or otherwise
(including in settlement of any litigation,
if such settlement is effected with
the written consent of the Offerors),
insofar as such losses, claims, damages,
judgments, liabilities or expenses (or
actions in respect thereof) arise out of,
or are based upon, or relate to, in whole
or in part, (a) any untrue statement
or alleged untrue statement of a material
fact contained in any information
(whether written or oral) or documents
executed in favor of, furnished or made
available to the Placement Agents or the
Purchaser by the Offerors, or (b) any
omission or alleged omission to state in
any information (whether written or
oral) or documents executed in favor of,
furnished or made available to the
Placement Agents or the Purchaser by the
Offerors a material fact required to be
stated therein or necessary to make the
statements therein not misleading, and
shall reimburse each Indemnified Party for
any legal and other expenses as such
expenses are reasonably incurred by such
Indemnified Party in connection with
investigating, defending, settling,
compromising or paying any such loss, claim,
damage, judgments, liability, expense or
action described in this Section 9.1.
In addition to their other obligations
under this Section 9, the Offerors hereby
agree that, as an interim measure during
the pendency of any claim, action,
investigation, inquiry or other proceeding
arising out of, or based upon, or
related to the matters described above in
this Section 9.1, they shall reimburse
each Indemnified Party on a quarterly basis
for all reasonable legal or other
expenses incurred in connection with
investigating or defending any such claim,
action, investigation, inquiry or other
proceeding, notwithstanding the absence
of a judicial determination as to the
propriety and enforceability of the
possibility that such payments might later
be held to have been improper by a
court of competent jurisdiction. To the
extent that any such interim
reimbursement payment is so held to have
been improper, each Indemnified Party
shall promptly return such amounts to the
Offerors together with interest,
determined on the basis of the prime rate
(or other commercial lending rate for
borrowers of the highest credit standing)
announced from time to time by First
Tennessee Bank National Association (the
"Prime Rate"). Any such interim
reimbursement payments which are not made
to an Indemnified Party within 30 days
of a request for reimbursement shall bear
interest at the Prime Rate from the
date of such request.
9.2. Conduct of Indemnification
Proceedings. Promptly after receipt by an
Indemnified Party under this Section 9 of
notice of the commencement of any
action, such Indemnified Party shall, if a
claim in respect thereof is to be
made against the Offerors under this
Section 9, notify the Offerors in writing
of the commencement thereof; but, subject
to Section 9.4, the omission to so
notify the Offerors shall not relieve them
from any liability pursuant to
Section 9.1 which the Offerors may have to
any Indemnified Party unless and to
the extent that the Offerors did not
otherwise learn of such action and such
failure by the Indemnified Party results in
the forfeiture by the Offerors of
substantial rights and defenses. In case
any such action is brought against any
Indemnified Party and such Indemnified
Party seeks or intends to seek indemnity
from the Offerors, the Offerors shall be
entitled to participate in, and, to the
extent that they may wish, to assume the
defense thereof with counsel reasonably
satisfactory to such Indemnified Party;
provided, however, if the defendants in
any such action include both the
Indemnified Party and the Offerors and the
Indemnified Party shall have reasonably
concluded that there may be a conflict
between the positions of the Offerors and
the Indemnified Party in conducting
the defense of any such action or 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 Offerors, the
Indemnified Party shall have the right to
select separate counsel to assume such
legal defenses and to otherwise
participate in the defense of such action
on behalf of such Indemnified Party.
Upon receipt of notice from the Offerors to
such Indemnified Party of their
election to so assume the defense of such
action and approval by the Indemnified
Party of counsel, the Offerors shall not be
liable to such Indemnified Party
under this Section 9 for any legal or other
expenses subsequently incurred by
such Indemnified Party in connection with
the defense thereof unless (i) the
Indemnified Party shall have employed such
counsel in connection with the
assumption of legal defenses in accordance
with the proviso in the preceding
sentence (it being understood, however,
that the Offerors shall not be liable
for the expenses of more than one separate
counsel representing the Indemnified
Parties who are parties to such action), or
(ii) the Offerors 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, in each of which cases the fees
and expenses of counsel of such
Indemnified Party shall be at the expense
of the Offerors.
9.3. Contribution. If the indemnification
provided for in this Section 9 is
required by its terms, but is for any
reason held to be unavailable to or
otherwise insufficient to hold harmless an
Indemnified Party under Section 9.1
in respect of any losses, claims, damages,
liabilities or expenses referred to
herein or therein, then the Offerors shall
contribute to the amount paid or
payable by such Indemnified Party as a
result of any losses, claims, damages,
judgments, liabilities or expenses referred
to herein (i) in such proportion as
is appropriate to reflect the relative
benefits received by the Offerors, on the
one hand, and the Indemnified Party, on the
other hand, from the offering of
such Capital Securities, or (ii) if the
allocation provided by clause (i) above
is not permitted by applicable law, in such
proportion as is appropriate to
reflect not only the relative benefits
referred to in clause (i) above but also
the relative fault of the Offerors, on the
one hand, and the Placement Agents,
on the other hand, in connection with the
statements or omissions or
inaccuracies in the representations and
warranties herein or other breaches
which resulted in such losses, claims,
damages, judgments, liabilities or
expenses, as well as any other relevant
equitable considerations. The respective
relative benefits received by the Offerors,
on the one hand, and the Placement
Agents, on the other hand, shall be deemed
to be in the same proportion, in the
case of the Offerors, as the total price
paid to the Offerors for the Capital
Securities sold by the Offerors to the
Purchaser (net of the compensation paid
to the Placement Agents hereunder, but
before deducting expenses), and in the
case of the Placement Agents, as the
compensation received by them, bears to the
total of such amounts paid to the Offerors
and received by the Placement Agents
as compensation. The relative fault of the
Offerors and the Placement Agents
shall be determined by reference to, among
other things, whether the untrue
statement or alleged untrue statement of a
material fact or the omission or
alleged omission of a material fact or the
inaccurate or the alleged inaccurate
representation and/or warranty relates to
information supplied by the Offerors
or the Placement Agents and the parties'
relative intent, knowledge, access to
information and opportunity to correct or
prevent such statement or omission.
The provisions set forth in Section 9.2
with respect to notice of commencement
of any action shall apply if a claim for
contribution is made under this Section
9.3; provided, however, that no additional
notice shall be required with respect
to any action for which notice has been
given under Section 9.2 for purposes of
indemnification. The Offerors and the
Placement Agents agree that it would not
be just and equitable if contribution
pursuant to this Section 9.3 were
determined by pro rata allocation or by any
other method of allocation that does
not take account of the equitable
considerations referred to in this Section
9.3. The amount paid or payable by an
Indemnified Party as a result of the
losses, claims, damages, judgments,
liabilities or expenses referred to in this
Section 9.3 shall be deemed to include,
subject to the limitations set forth
above, any legal or other expenses
reasonably incurred by such Indemnified Party
in connection with investigating or
defending any such action or claim. In no
event shall the liability of the Placement
Agents hereunder be greater in amount
than the dollar amount of the compensation
(net of payment of all expenses)
received by the Placement Agents upon the
sale of the Capital Securities giving
rise to such obligation. No person found
guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the
Securities Act) shall be entitled to
contribution from any person who was not
found guilty of such fraudulent
misrepresentation.
9.4. Additional Remedies. The indemnity and
contribution agreements contained in
this Section 9 are in addition to any
liability that the Offerors may otherwise
have to any Indemnified Party.
9.5. Additional Indemnification. The
Company shall indemnify and hold harmless
the Trust against all loss, liability,
claim, damage and expense whatsoever, as
due from the Trust under Sections 9.1
through 9.4 hereof.
Section 10.
Rights and Responsibilities of Placement Agents.
10.1. Reliance. In performing their duties
under this Agreement, the Placement
Agents shall be entitled to rely upon any
notice, signature or writing which
they shall in good faith believe to be
genuine and to be signed or presented by
a proper party or parties. The Placement
Agents may rely upon any opinions or
certificates or other documents delivered
by the Offerors or their counsel or
designees to either the Placement Agents or
the Purchaser.
10.2. Rights of Placement Agents. In
connection with the performance of their
duties under this Agreement, the Placement
Agents shall not be liable for any
error of judgment or any action taken or
omitted to be taken unless the
Placement Agents were grossly negligent or
engaged in willful misconduct in
connection with such performance or
non-performance. No provision of this
Agreement shall require the Placement
Agents to expend or risk their own funds
or otherwise incur any financial liability
on behalf of the Purchaser in
connection with the performance of any of
their duties hereunder. The Placement
Agents shall be under no obligation to
exercise any of the rights or powers
vested in them by this Agreement.
Section 11.
Miscellaneous.
11.1. Disclosure Schedule. The term
"Disclosure Schedule," as used herein, means
the schedule, if any, attached to this
Agreement that sets forth items the
disclosure of which is necessary or
appropriate as an exception to one or more
representations or warranties contained in
Section 5 hereof; provided, that any
item set forth in the Disclosure Schedule
as an exception to a representation or
warranty shall be deemed an admission by
the Offerors that such item represents
an exception, fact, event or circumstance
that is reasonably likely to result in
a Material Adverse Effect. The Disclosure
Schedule shall be arranged in
paragraphs corresponding to the section
numbers contained in Section 5. Nothing
in the Disclosure Schedule shall be deemed
adequate to disclose an exception to
a representation or warranty made herein
unless the Disclosure Schedule
identifies the exception with reasonable
particularity and describes the
relevant facts in reasonable detail.
Without limiting the generality of the
immediately preceding sentence, the mere
listing (or inclusion of a copy) of a
document or other item in the Disclosure
Schedule shall not be deemed adequate
to disclose an exception to a
representation or warranty made herein unless the
representation or warranty has to do with
the existence of the document or other
item itself. Information provided by the
Company in respon
