PLACEMENT AGREEMENT

 

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                                                                     Exhibit 1.1

 

                                   $10,000,000

 

                                   MMCapS(SM)

 

                        HORIZON BANCORP CAPITAL TRUST II

 

                                PLACEMENT AGREEMENT

 

                                                              New York, New York

                                                                October 21, 2004

 

SANDLER O'NEILL & PARTNERS, L.P.

919 Third Avenue

6th Floor

New York, New York 10022

 

Ladies and Gentlemen:

 

      Horizon Bancorp Capital Trust II (the "Trust"), a statutory trust

organized under the Delaware Statutory Trust Act, 12 Del. C. Section 3801 et

seq. (the "Delaware Act"), and Horizon Bancorp, an Indiana corporation (the

"Company" and together with the Trust, the "Offerors"), confirm their agreement

(the "Agreement") with Sandler O'Neill & Partners, L.P., as agent of the

Offerors (the "Placement Agent"), with respect to the issue and sale by the

Trust and the placement by the Placement Agent of 10,000 MMCapS(SM) (liquidation

amount of $1,000 per security) of the Trust (the "Capital Securities"). The

Capital Securities will be guaranteed by the Company to the extent provided in

the Guarantee Agreement, to be dated as of the Closing Date (as defined in

Section 2(a) hereof) (the "Guarantee Agreement"), between the Company, as

guarantor, and Wilmington Trust Company, as guarantee trustee (the "Guarantee

Trustee"), with respect to distributions and payments upon liquidation,

redemption and otherwise.

 

      The entire proceeds from the sale of the Capital Securities will be

combined with the entire proceeds from the sale by the Trust to the Company of

its common securities (the "Common Securities"), and will be used by the Trust

to purchase $10,310,000 aggregate principal amount of Floating Rate Junior

Subordinated Debt Securities due 2034 (the "Subordinated Debt Securities")

issued by the Company. The Capital Securities and the Common Securities will be

issued pursuant to the Amended and Restated Declaration of Trust, to be dated as

of the Closing Date (the "Declaration"), among the Company, as sponsor, the

Administrators named therein (the "Administrators"), Wilmington Trust Company,

as institutional trustee (the "Institutional Trustee"), Wilmington Trust

Company, as Delaware trustee (the "Delaware Trustee"), and the holders, from

time to time, of undivided beneficial interests in the assets of the Trust. The

Subordinated Debt Securities will be issued pursuant to the Indenture, to be

dated as of the Closing Date (the "Indenture"), between the Company and

Wilmington Trust Company, as indenture trustee (the "Indenture Trustee"). The

Indenture, the Guarantee Agreement, the Declaration, this Agreement and the

Subscription Agreement (as defined in Section 2(a) hereof) are hereinafter

referred to collectively as the "Operative Documents."

 

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      SECTION 1. Representations and Warranties.

 

      (a) The Trust and the Company, jointly and severally, represent and

warrant to the Placement Agent and NBC Capital Markets Group, Inc. (or its

designee) (the "Purchaser") as of the date hereof and as of the Closing Date,

and agree with the Placement Agent and the Purchaser, as follows:

 

            (i) Similar Offerings. Within a period of six months before or after

the date hereof, the Offerors have not, directly or indirectly, solicited any

offer to buy or offered to sell, and will not, directly or indirectly, solicit

any offer to buy or offer to sell, in the United States or to any United States

citizen or resident, any security which is or would be integrated with the sale

of the Capital Securities (including any securities of the same or a similar

class as the Capital Securities) in a manner that would require the Capital

Securities to be registered under the Securities Act of 1933, as amended (the

"1933 Act").

 

            (ii) Incorporated Documents. The documents of the Company filed with

the Securities and Exchange Commission (the "Commission") in accordance with the

Securities Exchange Act of 1934, as amended (the "1934 Act"), from and including

the commencement of the fiscal year covered by the Company's most recent Annual

Report on Form 10-K, at the time they were or hereafter are filed by the Company

with the Commission (collectively, the "1934 Act Reports"), complied and will

comply in all material respects with the requirements of the 1934 Act and the

rules and regulations of the Commission thereunder (the "1934 Act Regulations"),

and, at the date of this Agreement, on the Closing Date and on the

Representation and Delivery Date (as defined in Section 2(a) hereof), do not and

will not include 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 the light of the circumstances under which they were made, not

misleading; and other than such instruments, agreements, contracts and other

documents as are filed as exhibits to the Company's Annual Report on Form 10-K,

Quarterly Reports on Form 10-Q or Current Reports on Form 8-K, there are no

instruments, agreements, contracts or documents of a character described in Item

601 of Regulation S-K promulgated by the Commission to which the Company or any

of its subsidiaries is a party.

 

            (iii) Independent Accountants. The accountants of the Company who

certified the financial statements included in the 1934 Act Reports (the

"Independent Accountants") are independent public accountants of the Company and

its subsidiaries within the meaning of the 1933 Act and the rules and

regulations of the Commission thereunder (the "1933 Act Regulations").

 

            (iv) Financial Statements and Information. The consolidated

historical financial statements of the Company, together with the related

schedules and notes, included in the 1934 Act Reports present fairly, in all

material respects, the respective consolidated financial positions of the

Company and its consolidated subsidiaries at the respective dates indicated, and

the consolidated statements of income, changes in stockholders' equity and cash

flows of the Company and its consolidated subsidiaries for the respective

periods specified; said financial statements have been prepared in conformity

with generally accepted accounting principles in the United States applied on a

consistent basis throughout the periods involved, except as disclosed in the

notes to such financial statements; the supporting schedules, if any, included

in

 

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the 1934 Act Reports present fairly, in all material respects, the information

required to be stated therein; and any pro forma financial statements and the

related notes thereto included in the 1934 Act Reports present fairly, in all

material respects, the information shown therein, have been prepared in

accordance with the Commission's rules and guidelines with respect to pro forma

financial statements and have been properly compiled on the bases described

therein, and the assumptions used in the preparation thereof are reasonable and

the adjustments used therein are appropriate to give effect to the transactions

and circumstances referred to therein.

 

            (v) No Material Adverse Change. Since the respective dates as of

which information is given in the 1934 Act Reports, there has not been (A) any

material adverse change in the condition, financial, regulatory or otherwise, or

in the earnings, business affairs or business prospects of the Trust or of the

Company and its subsidiaries considered as one enterprise, whether or not

arising in the ordinary course of business (a "Material Adverse Effect") or (B)

any dividend or distribution of any kind declared, paid or made by the Company

on any class of its capital stock other than regular quarterly dividends on the

Company's common stock declared and paid consistent with past practice.

 

            (vi) Internal Accounting Controls. Each of the Company and its

subsidiaries maintain a system of internal accounting controls sufficient to

provide reasonable assurance that (i) transactions are executed in accordance

with the management's general or specific authorizations, (ii) transactions are

recorded as necessary to permit preparation of financial statements in

conformity with generally accepted accounting principles and to maintain asset

accountability, (iii) access to assets is permitted only in accordance with the

management's general or specific authorization and (iv) the recorded

accountability for assets is compared with the existing assets at reasonable

intervals and appropriate action is taken with respect to any differences.

 

            (vii) Disclosure Controls. The Company has established and maintains

disclosure controls and procedures (as such term is defined in Rule 13a-15(e)

and 15d-15(e) under the 1934 Act); such disclosure controls and procedures (i)

are designed to ensure that material information relating to the Company,

including its consolidated subsidiaries, is made known to the Company's Chief

Executive Officer and its Chief Financial Officer by others within those

entities, particularly during the periods in which the 1934 Act Reports are

being prepared, (ii) have been evaluated for effectiveness as of the end of the

annual or quarterly period reported to the Commission and (iii) are effective to

perform the functions for which they were established; the Company's auditors

and the Audit Committee of the Board of Directors have been advised of: (A) any

significant deficiencies in the design or operation of internal controls which

could adversely affect the Company's ability to record, process, summarize, and

report financial data and (B) any fraud, whether or not material, that involves

management or other employees who have a role in the Company's internal

controls; any material weaknesses in internal controls have been identified for

the Company's auditors; and since the date of the most recent evaluation of such

disclosure controls and procedures, there have been no significant changes in

internal controls or in other factors that could significantly affect internal

controls, including any corrective actions with regard to significant

deficiencies and material weaknesses.

 

            (viii) Regulatory Matters. Except as set forth in Schedule

1(a)(viii), neither the Company nor any of its subsidiaries is subject or is

party to, or has received any

 

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notice or advice that any of them may become subject or party to any

investigation with respect to, any corrective, suspension or 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 a recipient of any supervisory letter from, or has adopted any

board resolutions at the request of, any Regulatory Agency (as defined below)

that currently relates to or restricts in any material respect the conduct of

their business or that in any manner relates to their capital adequacy, credit

policies, management or business (each, a "Regulatory Agreement"), nor has the

Company or any of its subsidiaries been advised by any Regulatory Agency that it

is considering issuing or requesting any such Regulatory Agreement; there is no

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 which, in the reasonable judgment of the Company, is

expected to result in a Material Adverse Effect. As used herein, the term

"Regulatory Agency" means any federal or state agency charged with the

supervision or regulation of depositary institutions or holding companies of

depositary institutions, or engaged in the insurance of depositary 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.

 

            (ix) 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 referred to in Section

1(a)(iv) above and (ii) normal fluctuations 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 such financial statements.

 

            (x) Good Standing of the Company. The Company has been duly

organized and is validly existing as a corporation in good standing under the

laws of the State of Indiana and has full power and authority under such laws to

own, lease and operate its properties and to conduct its business, to enter into

and perform its obligations under each of the Operative Documents to which it is

a party, and to issue the Subordinated Debt Securities; and the Company is duly

registered as a bank holding company under the Bank Holding Company Act of 1956,

as amended.

 

            (xi) Good Standing of the Subsidiaries. Each "significant

subsidiary" (as defined in Rule 1-02 of Regulation S-X) of the Company (a

"Significant Subsidiary") has been duly organized and is validly existing as an

entity in good standing under the laws of the jurisdiction in which it is

chartered and has full power and authority under such laws to own, lease and

operate its properties and to conduct its current and contemplated business; and

the deposit accounts of Horizon Bank, National Association are insured up to the

applicable limits by the Bank Insurance Fund of the Federal Deposit Insurance

Corporation (the "FDIC") to the fullest extent permitted by law and the rules

and regulations of the FDIC, and no proceeding for

 

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the revocation or termination of such insurance is pending or, to the knowledge

of the Company, threatened. For the avoidance of doubt, Horizon Trust &

Investment Management, National Association is operated solely as a trust

company and only exercises trust power. In that regard, Horizon Trust &

Investment Management, National Association holds no deposit accounts that

require FDIC insurance.

 

            (xii) Foreign Qualifications. Each of the Company and its

subsidiaries is duly qualified as a foreign entity to transact business and each

is in good standing in each jurisdiction in which such qualification is

required, whether by reason of the ownership or leasing of property or the

conduct of business, except where the failure to be so qualified would not

singularly, or in the aggregate, in the reasonable judgment of the Company, be

expected to result in a Material Adverse Effect.

 

            (xiii) Capital Stock Duly Authorized and Validly Issued. All of the

issued and outstanding capital stock of the Company has been duly authorized and

validly issued and is fully paid and nonassessable; all of the issued and

outstanding capital stock of each Significant Subsidiary of the Company has been

duly authorized and validly issued, is fully paid and nonassessable and is owned

by the Company, directly or through subsidiaries, free and clear of any security

interest, mortgage, pledge, lien, encumbrance, claim or equitable right; and

none of the issued and outstanding capital stock of the Company or its

Significant Subsidiaries was issued in violation of any preemptive or similar

rights arising by operation of law, under the charter, by-laws or code of

regulations of the Company or any of its Significant Subsidiaries or under any

agreement to which the Company or any of its Significant Subsidiaries is a

party.

 

            (xiv) Good Standing of the Trust. The Trust has been duly created

and is validly existing in good standing as a statutory trust under the Delaware

Act with the power and authority to own property and to conduct its business as

provided in the Declaration, to enter into and perform its obligations under the

Operative Documents to which it is a party, and to issue the Capital Securities

and the Common Securities; the Trust is not a party to or otherwise bound by any

agreement other than the Operative Documents to which it is a party; and the

Trust is, and will be, under current law, classified for United States federal

income tax purposes as a grantor trust and not as an association taxable as a

corporation.

 

            (xv) Authorization of Common Securities. The Common Securities have

been duly authorized, issued, executed and delivered in accordance with the

Declaration and are validly issued and fully paid and nonassessable undivided

common beneficial ownership interests in the assets of the Trust; the issuance

of the Common Securities is not subject to preemptive or other similar rights;

and all of the issued and outstanding Common Securities of the Trust are owned

directly by the Company, free and clear of any security interest, mortgage,

pledge, lien, encumbrance, claim or equitable right.

 

            (xvi) Authorization of Capital Securities. The Capital Securities

have been duly authorized, issued, executed, authenticated and delivered in

accordance with the Declaration and are validly issued and fully paid and

nonassessable undivided preferred beneficial ownership interests in the assets

of the Trust; the issuance of the Capital Securities will not be subject to

preemptive or other similar rights; and the Capital Securities are in the form

contemplated by, and entitled to the benefits of, the Declaration.

 

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            (xvii) Authorization of this Agreement. This Agreement has been duly

authorized, executed and delivered by each of the Offerors.

 

            (xviii) Authorization of Subscription Agreement. The Subscription

Agreement has been duly authorized, executed and delivered by each of the

Offerors, and assuming due authorization, execution and delivery of the

Subscription Agreement by the Purchaser, the Subscription Agreement constitutes

a valid, legal and binding agreement of each of the Offerors, enforceable

against each of the Offerors in accordance with its terms, except to the extent

that enforceability may be limited by (a) bankruptcy, insolvency,

reorganization, moratorium, fraudulent conveyance or other similar laws now or

hereafter in effect relating to creditors' rights generally and (b) general

principles of equity (regardless of whether enforceability is considered in a

proceeding at law or in equity) (collectively, the "Enforceability Exceptions").

 

            (xix) Authorization of Declaration. The Declaration has been duly

authorized, executed and delivered by the Company and the Administrators, and

assuming due authorization, execution and delivery of the Declaration by the

Institutional Trustee and the Delaware Trustee, the Declaration constitutes a

valid, legal and binding agreement of the Company, enforceable against the

Company in accordance with its terms, except to the extent that enforceability

may be limited by the Enforceability Exceptions.

 

            (xx) Authorization of Guarantee Agreement. The Guarantee Agreement

has been duly authorized, executed and delivered by the Company, and assuming

due authorization, execution and delivery of the Guarantee Agreement by the

Guarantee Trustee, the Guarantee Agreement constitutes a valid, legal and

binding agreement of the Company, enforceable against the Company in accordance

with its terms, except to the extent that enforceability may be limited by the

Enforceability Exceptions.

 

            (xxi) Authorization of Indenture. The Indenture has been duly

authorized, executed and delivered by the Company, and assuming due

authorization, execution and delivery of the Indenture by the Indenture Trustee,

the Indenture constitutes a valid, legal and binding agreement of the Company,

enforceable against the Company in accordance with its terms, except to the

extent that enforceability may be limited by the Enforceability Exceptions.

 

            (xxii) Authorization of Subordinated Debt Securities. The

Subordinated Debt Securities have been duly authorized, executed, authenticated

and delivered by the Company in accordance with the Indenture and constitute

valid, legal and binding obligations of the Company, enforceable against the

Company in accordance with their terms, except to the extent that enforceability

may be limited by the Enforceability Exceptions; the Subordinated Debt

Securities are in the form contemplated by, and entitled to the benefits of, the

Indenture; the Subordinated Debt Securities constitute indebtedness of the

Company for United States federal income tax purposes and the Company has no

present intention to exercise its option to defer payments of interest on the

Subordinated Debt Securities as provided in the Indenture.

 

            (xxiii) Authorization of Administrators. Each of the Administrators

of the Trust is an officer or employee of the Company and has been duly

authorized by the Company to execute and deliver the Declaration.

 

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            (xxiv) Not an Investment Company. Neither the Trust nor the Company

is, and immediately following consummation of the transactions contemplated

hereby and the application of the net proceeds therefrom neither the Trust nor

the Company 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 "1940 Act"), without regard to

Section 3(c) of the 1940 Act.

 

            (xxv) Absence of Defaults and Conflicts. The Trust is not in

violation of the trust certificate of the Trust filed with the State of Delaware

(the "Trust Certificate") or the Declaration, and neither the Company nor any of

its subsidiaries is in violation of its charter, by-laws or code of regulations;

none of the Trust, the Company or any subsidiary of the Company is in default in

the performance or observance of any obligation, agreement, covenant or

condition contained in any contract, indenture, mortgage, deed of trust, loan or

credit agreement, note, lease or other agreement or instrument to which it is a

party or by which it or any of them may be bound or to which any of its

properties or assets is subject (collectively, "Agreements and Instruments"),

except for such defaults under Agreements and Instruments that, in the

reasonable judgment of the Company, are not expected to result in a Material

Adverse Effect; and the execution, delivery and performance of the Operative

Documents by the Trust or the Company, as the case may be, the issuance, sale

and delivery of the Capital Securities and the Subordinated Debt Securities, the

consummation of the transactions contemplated by the Operative Documents, and

compliance by the Trust and the Company with the terms of the Operative

Documents to which they are a party have been duly authorized by all necessary

corporate action on the part of the Company and by all necessary action on the

part of the Trust and do not and will not, whether with or without the giving of

notice or passage of time or both, violate, conflict with or constitute a breach

of, or default or Repayment Event (as defined below) under, or result in the

creation or imposition of any, security interest, mortgage, pledge, lien,

charge, encumbrance, claim or equitable right upon any properties or assets of

the Trust or the Company or any of its subsidiaries pursuant to any of the

Agreements and Instruments, nor will such action result in any violation of the

provisions of the charter, by-laws or code of regulations of the Company or any

of its subsidiaries or the Declaration or the Trust Certificate, or violation by

the Company or any of its subsidiaries of any applicable law, statute, rule,

regulation, judgment, order, writ or decree of any government, government

authority, agency (including, without limitation, each applicable Regulatory

Agency) or instrumentality or court, domestic or foreign, having jurisdiction

over the Trust or the Company or any of its subsidiaries or their respective

properties or assets (collectively, "Governmental Entities"). As used herein, a

"Repayment Event" means any event or condition which gives the holder of any

note, debenture or other evidence of indebtedness (or any person acting on such

holder's behalf) the right to require the repurchase, redemption or repayment of

all or a portion of such indebtedness by the Trust or the Company or any of its

subsidiaries prior to its scheduled maturity.

 

            (xxvi) Absence of Labor Dispute. No labor dispute with the employees

of the Company or any of its subsidiaries exists or, to the knowledge of the

executive officers of the Company, is imminent, which, in the reasonable

judgment of the Company, in either case, is expected to result in a Material

Adverse Effect.

 

            (xxvii) Absence of Proceedings. There is no action, suit,

proceeding, inquiry or investigation before or brought by any Governmental

Entity, now pending, or, to the

 

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knowledge of the Trust or the Company, threatened, against or affecting the

Trust or the Company or any of its subsidiaries, which, in the reasonable

judgment of the Trust or the Company is expected to result in a Material Adverse

Effect or materially and adversely affect the consummation of the transactions

contemplated by the Operative Documents or the performance by the Trust or the

Company of its obligations hereunder or thereunder; and the aggregate of all

pending legal or governmental proceedings to which the Trust or the Company or

any of its subsidiaries is a party or of which any of their respective

properties or assets is the subject, including ordinary routine litigation

incidental to the business, are not, in the reasonable judgment of the Company

or the Trust, expected to result in a Material Adverse Effect.

 

            (xxviii) Absence of Further Requirements. No filing with, or

authorization, approval, consent, license, order, registration, qualification or

decree of, any Governmental Entity, other than those that have been made or

obtained, is necessary or required for the authorization, execution, delivery or

performance by the Trust or the Company of their respective obligations under

the Operative Documents, the Subordinated Debt Securities or the Capital

Securities, as applicable, or the consummation by the Trust or the Company of

the transactions contemplated by the Operative Documents.

 

            (xxix) Possession of Licenses and Permits. Each of the Trust, the

Company and the subsidiaries of the Company possesses such permits, orders,

certificates, licenses, approvals, consents and other authorizations

(collectively, "Governmental Licenses") issued by the appropriate Governmental

Entities necessary to conduct the business now operated by it that is material

to the Trust or the Company and its subsidiaries considered as one enterprise;

each of the Trust, the Company and the subsidiaries of the Company is in

compliance with the terms and conditions of all of its Governmental Licenses,

except where the failure so to comply, in the reasonable judgment of the

Company, is not expected to, singularly or in the aggregate, have a Material

Adverse Effect; all of the Governmental Licenses are valid and in full force and

effect, except when the invalidity of such Governmental Licenses or the failure

of such Governmental Licenses to be in full force and effect, in the reasonable

judgment of the Company, is not expected to have a Material Adverse Effect; and

none of the Trust, the Company or any subsidiary of the Company has received

notice of any proceeding, and to the knowledge of the Trust, the Company or any

subsidiary of the Company, there has been no threatened proceeding, relating to

the revocation, termination, suspension or modification of any such Governmental

Licenses which, singularly or in the aggregate, in the reasonable judgment of

the Company or the Trust, is expected to result in a Material Adverse Effect.

 

            (xxx) Title to Property. Each of the Trust, the Company and the

subsidiaries of the Company has good and marketable title to all of its

respective real and personal properties, in each case free and clear of all

liens, encumbrances and defects, except such as, in the reasonable judgment of

the Trust or the Company, singularly or in the aggregate, are not expected to

result in a Material Adverse Effect; and all of the leases and subleases under

which the Trust, the Company or any subsidiary of the Company holds properties

are in full force and effect, except when the failure of such leases and

subleases to be in full force and effect, in the reasonable judgment of the

Company, singularly or in the aggregate, is not expected to have a Material

Adverse Effect, and none of the Trust, the Company or any subsidiary of the

Company has any notice of any claim of any sort that has been asserted by anyone

adverse to the rights of the Trust, the Company or any subsidiary of the Company

under any of the leases or

 

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subleases under which the Trust, the Company or any subsidiary of the Company

holds properties, or affecting or questioning the rights of such entity to the

continued possession of the leased or subleased premises under any such lease or

sublease, except when such claim, in the reasonable judgment of the Company,

singularly or in the aggregate, is not expected to have a Material Adverse

Effect.

 

             (xxxi) Stabilization. The Company has not taken and will not take,

directly or indirectly, any action designed to, or that might be reasonably

expected to, cause or result in stabilization or manipulation of the price of

the Capital Securities.

 

             (xxxii) No General Solicitation. Neither the Trust or the Company

nor any of their Affiliates (as defined in Rule 501(b) under the 1933 Act) or

any person acting on its or any of their behalf (other than the Placement Agent,

as to whom the Offerors make no representation) has engaged or will engage, in

connection with the offer and sale of the Capital Securities, in any form of

general solicitation or general advertising within the meaning of Rule 502(c)

under the 1933 Act.

 

            (xxxiii) No Directed Selling Efforts. Neither the Trust or the

Company nor any of their Affiliates or any person acting on its or any of their

behalf (other than the Placement Agent, as to whom the Offerors make no

representation) has engaged or will engage in any directed selling efforts

within the meaning of Regulation S under the 1933 Act ("Regulation S") with

respect to the offer and sale of the Capital Securities.

 

            (xxxiv) No Registration. Subject to compliance by the Placement

Agent with the relevant provisions of Section 6 hereof, it is not necessary in

connection with the offer, sale and delivery of the Capital Securities by the

Trust and the subsequent sale of the Capital Securities by the Purchaser to the

Transferee (as defined in Section 2(a) hereof) in the manner contemplated by

this Agreement to register the Capital Securities, the guarantee as described in

the Guarantee Agreement or the Subordinated Debt Securities under the 1933 Act

or to qualify the Declaration, the Guarantee Agreement or the Indenture under

the Trust Indenture Act of 1939, as amended.

 

      (b) Any certificate signed by any Trustee of the Trust or any duly

authorized officer of the Company or any of its subsidiaries and delivered to

the Placement Agent or to counsel for the Placement Agent shall be deemed a

representation and warranty by the Trust or the Company, as the case may be, to

the Placement Agent as to the matters covered thereby.

 

      SECTION 2. Purchase and Sale; Closing.

 

      (a) The Offerors propose to issue and sell the Capital Securities on

October 21, 2004 (or such other date mutually agreed to by the Offerors and the

Placement Agent) (the "Closing Date") to the Purchaser pursuant to the terms of

the Capital Securities Subscription Agreement, entered into on the date hereof

(the "Subscription Agreement"), between the Offerors and the Purchaser. It is

understood and agreed that the Purchaser may transfer the Capital Securities to

any purchaser(s) selected by it (the "Transferee") in accordance with the

provisions contained in the Declaration. The date on which the Purchaser has

transferred all of the Capital Securities purchased on the Closing Date is

referred to herein as the "Representation

 

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and Delivery Date". In addition, the Offerors agree that the Purchaser and the

Transferee shall be entitled to the benefit of, and to rely on, the provisions

of this Agreement to the extent such provisions address or relate to the

Purchaser or the Capital Securities to be purchased by the Purchaser.

 

      (b) The Offerors hereby grant to the Placement Agent the exclusive right

to arrange the placement of the Capital Securities with the Purchaser on their

behalf. The Placement Agent accepts such right and agrees to use its best

efforts, on and prior to the Closing Date, to effect such placement.

 

      (c) Deliveries of certificates for the Capital Securities shall be made by

the Trust to or on behalf of the Purchaser at the offices of Sidley Austin Brown

& Wood LLP in The City of New York, and payment of the purchase price for the

Capital Securities shall be made by the Purchaser to the Trust by wire transfer

of immediately available funds to a bank designated by the Company

contemporaneous with closing on the Closing Date.

 

       Certificates for the Capital Securities in the aggregate liquidation

amount thereof shall be registered in the name of the Purchaser.

 

      (d) It is agreed that no placement fee shall be paid by the Company or the

Trust in connection with the transactions contemplated by this Agreement.

 

      (e) In performing its duties under this Agreement, the Placement Agent

shall be entitled to rely upon any notice, signature or writing which the

Placement Agent shall in good faith believe to be genuine and to be signed or

presented by a proper party or parties. The Placement Agent may rely upon any

opinions or certificates or other documents delivered by the Offerors or their

counsel or designees either to it or the Purchaser. In addition, in connection

with the performance of its duties under this Agreement, the Placement Agent

shall not be liable for any error of judgment or any action taken or omitted to

be taken unless it was grossly negligent or engaged in willful misconduct in

connection with such performance or non-performance. No provision of this

Agreement shall require the Placement Agent to expend or risk its own funds or

otherwise incur any financial liability on behalf of the Purchaser in connection

with the performance of any of its duties hereunder. The Placement Agent shall

be under no obligation to exercise any of the rights or powers vested in it by

this Agreement.

 

      SECTION 3. Notice of Material Events. The Offerors covenant with the

Placement Agent and