Exhibit 1.1
COLUMBIA BANCORP
4,000 Capital
Securities
Floating Rate Capital
Securities
(Liquidation Amount $1,000.00 per
Capital Security)
PLACEMENT
AGREEMENT
December 29, 2004
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:
Columbia Bancorp, a Maryland
corporation (the “Company”), and its financing
subsidiary, Columbia Bancorp 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)
4,000 of the Trust’s 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
$4,124,000.00 in principal amount of the 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 December 30, 2004, 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 December
31, 2004 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.
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.
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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 December 31, 2004, 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 Piper Rudnick
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 document relating to legal opinions, including,
without limitation, the Legal Opinion Accord of the ABA Section of
Business Law (1991).
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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.
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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’
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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 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
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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 Maryland, 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
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(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, 2003 and December
31, 2002 and related consolidated income statements and statements
of changes in shareholders’ equity for the three years ended
December 31, 2003 together with the notes thereto, and the
consolidated balance sheets of the Company and all of its
Subsidiaries as of September 30, 2004 and the related consolidated
income statements and statements of changes in shareholders’
equity for the nine 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.
(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
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since January 1, 2001, a recipient of any
supervisory letter from, or since January 1, 2001, 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, 2001, 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 December 31,
2003, 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.
5.18. 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,
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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, 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 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 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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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
11
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.
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Section
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9.
Indemnification .
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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
12
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
13
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.
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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 docume
