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Exhibit 10.3
EXCHANGE NATIONAL BANCSHARES, INC.
23,000 CAPITAL SECURITIES
FIXED/FLOATING RATE CAPITAL SECURITIES
(LIQUIDATION AMOUNT $1,000.00 PER CAPITAL SECURITY)
PLACEMENT AGREEMENT
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March 9, 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:
Exchange
National Bancshares, Inc., a Missouri corporation (the
"Company"),
and its financing subsidiary, Exchange
National Statutory Trust II, 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) 23,000
of the Trust's Fixed/Floating Rate
Capital Securities, with a liquidation
amount of $1,000.00 per capital security
(the "Capital Securities"), to Preferred
Term Securities XVII, Ltd., a company
with limited liability established under
the laws of the Cayman Islands (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
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the Trust to the Company of its common
securities (the "Common Securities"), and
shall be used by the Trust to purchase
$23,712,000.00 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 March 17, 2005, or such
other business day as may be agreed upon
by the Offerors and the Placement Agents
(the "Closing Date"); provided,
however, that in no event shall the Closing
Date occur later than March 31, 2005
unless consented to by the Purchaser.
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.
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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 March 31, 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 Stinson Morrison Hecker 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, in substantially the form 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
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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. SALE OF
PURCHASER SECURITIES. The Purchaser shall have sold securities
issued by the Purchaser in an amount such
that the net proceeds of such sale
shall be (i) available on the Closing Date
and (ii) in an amount sufficient to
purchase the Capital Securities and all
other capital or similar securities
contemplated in agreements similar to this
Agreement and the Subscription
Agreement.
3.7.
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.
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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, (ii)
engaged or will engage, in any "directed
selling efforts" within the meaning of
Regulation S under the Securities Act
("Regulation S") with respect to the
Securities, or (iii) 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
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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.
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
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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 Missouri, 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,
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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 December 31, 2004 and
December 31, 2003 and related
consolidated income statements and
statements of changes in shareholders' equity
for the three years ended December 31, 2004
together with the notes thereto,
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. 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.
(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. 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
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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.
5.16. NO
MATERIAL CHANGE. Since December 31, 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.
5.17. 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.
5.18.
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.
5.19. 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:
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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, 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.
Neither the Placement Agent nor its
representatives have engaged or will engage
in any "directed selling efforts"
within the meaning of Regulation S with
respect to the Capital Securities.
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, that the Purchaser
does not intend to distribute the
Capital Securities in contravention of the
Securities Act or any other
applicable securities laws, and that the
Purchaser is not a "U.S. person" as
that term is defined under Rule 902 of the
Securities Act.
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 except (i) in
an offshore transaction complying with Rule
903 of Regulation S, or (ii) to
those the Placement Agent reasonably
believes are "accredited investors" (as
defined in Rule 501 of Regulation D), or
(iii) in any other manner that does not
require registration of the Capital
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.
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<PAGE>
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
condition set forth in Section 3.6 is not
satisfied or because either of the
Placement Agents fails to fulfill a
condition set forth in Section 4 or the
Purchaser fails to purchase the Capital
Securities.
7.6. DIRECTED
SELLING EFFORTS, 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, (i) engage in any "directed
selling efforts" within the meaning of
Regulation S, or (ii) 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
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<PAGE>
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. 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, the
Offerors shall submit to The Bank of
New York a completed quarterly report in
the form attached hereto as Exhibit D.
The Offerors acknowledge and agree that The
Bank of New York and its successors
and assigns are third party beneficiaries
of this Section 7.8.
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
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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 suc
