PLACEMENT AGREEMENT
AMONG
GREENVILLE FIRST BANCSHARES, INC.,
GREENVILLE STATUTORY TRUST II
AND
J.P. MORGAN SECURITIES INC.
_________________
Dated as of December 22, 2005
_________________
Greenville First Bancshares, Inc.
$7,000,000 Preferred Securities
Floating Rate Preferred Securities
(Liquidation Amount $1,000 per Preferred Security)
PLACEMENT AGREEMENT
_________________
December 22, 2005
J.P. Morgan Securities Inc.
270 Park Avenue
New York, New York 10017
Ladies and Gentlemen:
Greenville
First Bancshares, Inc., a South Carolina corporation (the
“Company”), and its financing subsidiary, Greenville
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 agent (the
“Placement Agent”), 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) SEVEN MILLION AND
00/100 ($7,000,000) DOLLARS of the Trust’s Floating Rate
Preferred Securities, with a liquidation amount of $1,000 per
preferred security, bearing a variable rate of interest per annum,
reset quarterly, equal to LIBOR (as defined in the Indenture (as
defined below)) plus 1.44% (the “Preferred
Securities”), directly or indirectly, to TWE, Ltd., an
exempted company incorporated under the laws of the Cayman Islands
(the “Purchaser”), pursuant to the terms of the
Preferred Securities 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 Preferred 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, as guarantee trustee (the “Guarantee
Trustee”), for the benefit from time to time of the holders
of the Preferred Securities. The entire proceeds from the sale by
the Trust to the holders of the Preferred 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
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purchase SEVEN MILLION TWO
HUNDRED SEVENTEEN THOUSAND AND 00/100 ($7,217,000) DOLLARS in
principal amount of the Floating Rate Junior Subordinated Notes
(the “Junior Subordinated Notes”) of the Company. The
Preferred Securities and the Common Securities of the Trust shall
be issued pursuant to an Amended and Restated Trust Agreement among
Wilmington Trust Company, as property trustee (the “Property
Trustee”), and as Delaware trustee (the “Delaware
Trustee”) the Administrative Trustees named therein and the
Company, to be dated as of the Closing Date and in substantially
the form heretofore delivered to the Placement Agent (the
“Trust Agreement”). The Junior Subordinated Notes shall
be issued pursuant to an Indenture (the “Indenture”),
to be dated as of the Closing Date, between the Company and
Wilmington Trust Company, 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.” The Preferred Securities,
the Common Securities and the Junior Subordinated Notes are
collectively referred to as the “Securities.” All other
capitalized terms used but not defined in this Agreement shall have
the meanings ascribed to them in the Indenture.
1.3
Rights of Purchaser . The Preferred Securities shall be
offered and sold by the Trust, directly or indirectly, to the
Purchaser without registration of any of the Preferred Securities,
the Junior Subordinated Notes 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 Agent 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 Agent 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 Preferred Securities and
Junior Subordinated Notes certificates shall each contain a legend
as required pursuant to any of the Operative Documents.
Section
2. Purchase of Preferred 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 Agent), the Offerors
hereby grant to the Placement Agent the exclusive right to arrange
for the sale to the Purchaser of the Preferred Securities at a
purchase price equal to $1,000 per Preferred Security. The
aggregate purchase price shall be SEVEN MILLION AND 00/100
($7,000,000) DOLLARS (the “Purchase Price”), which
Purchase Price is equal to 100% of the stated liquidation amount of
the Preferred Securities.
2.2
Subscription . 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
Agent.
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2.3
Closing and Delivery of Payment.
2.3.1
Closing; Closing Date . The closing (the
“Closing”) for the sale and purchase of the Preferred
Securities by the Offerors to the Purchaser shall occur at the
offices of Thacher Proffitt & Wood LLP, Two World Financial
Center, New York, New York 10281, or such other place as the
parties hereto shall agree at 11:00 a.m. (New York time) on
December 22, 2005, or such other later date (not later than January
20, 2006) as the parties may designate (such date and time of
delivery and payment for the Preferred Securities being herein
called the “Closing Date”). The Preferred Securities
shall be transferred and delivered to the Purchaser or its designee
against the payment of the Purchase Price to the Offerors in
immediately available funds on the Closing Date to a U.S. account
designated in writing by the Company at least two (2) business days
prior to the Closing Date.
2.3.2
Delivery . Delivery of the Preferred Securities shall be
made at such location, and in such names and denominations, as the
Purchaser shall designate at least two (2) business days in advance
of the Closing Date. The Company and the Trust agree to have the
Preferred Securities available for inspection and checking by the
Purchaser in New York, New York not later than 1:00 P.M., New York
time, on the business day prior to the Closing Date.
2.4
Placement Agents’ Fees and Expenses.
2.4.1
Placement Agents’ Compensation . The Trust shall use
the proceeds from the sale of the Preferred Securities, together
with the proceeds from the sale of the Common Securities, to
purchase the Junior Subordinated Notes. The Company shall pay no
fees or commissions (the “Commission”) to the Placement
Agent. The Placement Agent shall be responsible for the following
expenses: (i) rating agency costs and expenses and (ii) any fee
payable to the Company’s introducing agent; provided, that
such introducing agent has an agreement with the Placement Agent,
but excluding the fees and expenses set forth in Section
2.4.2 hereof.
2.4.2
Costs and Expenses . The Company hereby covenants and agrees
that it shall pay or cause to be paid (directly or by
reimbursement) all costs and expenses incident to the performance
of the obligations of the Offerors under this Agreement, whether or
not the transactions contemplated herein are consummated or this
Agreement is terminated, including (i) all costs and expenses
incident to the authorization, issuance, sale and delivery of the
Preferred Securities and any taxes payable in connection therewith;
(ii) the fees and expenses of qualifying the Preferred Securities
under the securities laws of the several jurisdictions as provided
in Section 6.4 ; (iii) the fees and expenses of the counsel,
the accountants and any other experts or advisors retained by the
Company or the Trust, which counsel fees and expenses incurred in
connection with the closing of the transactions contemplated
hereby, in an amount up to $10,000, shall be reimbursed by the
Purchaser on the Closing Date; and; (iv) the fees and all
reasonable expenses of the Guarantee Trustee, the Property Trustee,
the Delaware Trustee, the Indenture Trustee and any other trustee
or paying agent appointed under the Operative Documents, except for
any acceptance fee and annual administrative fees of any such
trustee and the fees and disbursements of counsel to such trustees
incurred in connection with the closing of the transactions
contemplated hereby, which shall be paid by the
Purchaser.
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2.4.3
Reimbursement of Expenses . If the sale of the Preferred
Securities provided for in this Agreement is not consummated
because any condition set forth in Section 3 to be satisfied
by either the Company or the Trust is not satisfied, because this
Agreement is terminated pursuant to Section 10 or because of
any failure, refusal or inability on the part of the Company or the
Trust to perform all obligations and satisfy all conditions on its
part to be performed or satisfied hereunder other than by a reason
of a default by the Placement Agent, the Company will reimburse the
Placement Agent upon demand for all reasonable out-of-pocket
expenses (including the fees and expenses of each of the Placement
Agent’s or Purchaser’s counsel) that shall have been
incurred by the Placement Agent or Purchaser in connection with the
proposed purchase and sale of the Preferred Securities. The Company
shall not in any event be liable to the Placement Agent or
Purchaser for the loss of anticipated profits from the transactions
contemplated by this 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 Agent or if the Closing shall not
have occurred on or before 11:00 a.m. (New York time) on January
20, 2006, 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 , and 8 shall not be so relieved and shall continue
in full force and effect.
Section
3. Closing Conditions . The
obligations of the parties under this Agreement on the Closing Date
are subject to the following conditions:
3.1
Accuracy of Representations and Warranties . The
representations and warranties contained in this Agreement, and the
statements of the Offerors made in any certificates pursuant to
this Agreement, shall be accurate as of the date of delivery of the
Preferred Securities:
3.2
Opinions of Counsel . On the Closing Date, the Placement
Agent shall have received the following favorable opinions or
certificate, as the case may be, each dated as of the Closing Date:
(a) from Thacher Proffitt & Wood LLP, special counsel for the
Placement Agent and Purchaser and addressed to the Placement Agent
and Purchaser in substantially the form set forth on Exhibit
B-1 attached hereto and incorporated herein by this reference,
(b) either (i) an opinion from Nelson Mullins Riley &
Scarborough LLP, counsel for the Offerors, or (ii) an
Officers’ Certificate, from the General Counsel or Chief
Legal Officer of the Company, or (iii) if the Company does not have
a General Counsel or Chief Legal Officer, an Officers’
Certificate from the Chief Executive Officer, President or
Executive Vice President of the Company, and the Chief Financial
Officer, Treasurer or Assistant Treasurer of the Company, in each
case addressed to the Purchaser and the Placement Agent in
substantially the form set forth on Exhibit B-2 attached
hereto and incorporated herein by this reference, (c) from Thacher
Proffitt & Wood LLP, special tax counsel for the Placement
Agent and Purchaser and addressed to the Placement Agent and
Purchaser in substantially the form set forth on Exhibit B-3
attached hereto and incorporated herein by this reference, (d) from
Morris, James, Hitchens & Williams LLP, special Delaware
counsel to the Trust and addressed to the Purchaser, the Placement
Agent and the Offerors, in substantially the form set forth on
Exhibit B-4 attached hereto and incorporated herein by this
reference, and (e) from Morris, James, Hitchens & Williams LLP,
special counsel
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to the Indenture Trustee, the
Property Trustee, the Delaware Trustee and the Guarantee Trustee
and addressed to the Purchaser, the Placement Agent and the
Offerors, in substantially the form set forth on Exhibit B-5
attached hereto and incorporated herein by this reference. Each
opinion addressed to the Purchaser shall state that the first
entity, if any, to which the Purchaser transfers any of the
Preferred Securities and, if such transferee is a warehouse lender,
the next subsequent transferee that is not a warehouse lender
(each, a “Subsequent Purchaser”), shall be entitled to
rely on such opinion.
3.3
Officer’s Certificate . The Company shall have
furnished to the Placement Agent and the Purchaser a certificate of
the Company, signed by the Chief Executive Officer, President or an
Executive Vice President and by the Chief Financial Officer,
Treasurer or Assistant Treasurer of the Company, and the Trust
shall have furnished to the Placement Agent and the Purchaser a
certificate of the Trust, signed by an Administrative Trustee of
the Trust, in each case dated the Closing Date, and, in the case of
the Company, as to 3.3.1 and 3.3.2 below and, in the
case of the Trust, as to 3.3.1 below:
3.3.1
the representations and warranties in this Agreement are true and
correct on and as of the Closing Date with the same effect as if
made on the Closing Date, and the Company and the Trust have
complied with all the agreements and satisfied all the conditions
on either of their part to be performed or satisfied at or prior to
the Closing Date; and
3.3.2
since the date of the Interim Financial Statements (as defined
below), there has been no material adverse change in the condition
(financial or other), earnings, business, prospects or assets of
the Company and its subsidiaries, whether or not arising from
transactions occurring in the ordinary course of
business.
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3.4
No Subsequent Change . Subsequent to the execution of this
Agreement, there shall not have been any change, or any development
involving a prospective change, in or affecting the condition
(financial or other), earnings, business, prospects or assets of
the Company and its subsidiaries, whether or not occurring in the
ordinary course of business, the effect of which is, in the
Placement Agent’s or Purchaser’s judgment, so material
and adverse as to make it impractical or inadvisable to proceed
with the purchase of the Preferred Securities.
3.5
Purchase Permitted by Applicable Laws; Legal Investment .
The purchase of and payment for the Preferred 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 Agent to any penalty or, in the reasonable judgment of
the Purchaser and the Placement Agent, 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 Agent are
subject.
3.6
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.
3.7
Information . Prior to or on the Closing Date, the Offerors
shall have furnished to the Placement Agent, the Purchaser and
their respective counsel such further information, certificates,
opinions and documents as the Placement Agent, Purchaser or their
respective counsel may reasonably request.
If
any of the conditions specified in this Section 3 shall not
have been fulfilled when and as required in this Agreement, or if
any of the opinions, certificates and documents mentioned above or
elsewhere in this Agreement shall not be reasonably satisfactory in
form and substance to the Placement Agent, the Purchaser or their
respective counsel, this Agreement and all the Placement
Agent’s obligations hereunder may be canceled at, or any time
prior to, the Closing Date by the Placement Agent. Notice of such
cancellation shall be given to the Offerors in writing or by
telephone or facsimile confirmed in writing.
Each
certificate signed by any trustee of the Trust or any officer of
the Company and delivered to the Placement Agent, Purchaser or
their respective counsel in connection with the Operative Documents
and the transactions contemplated hereby and thereby shall be
deemed to be a representation and warranty of the Trust and/or the
Company, as the case may be, and not by such trustee or officer in
any individual capacity.
Section 4.
Representations and Warranties of the
Offerors . The Offerors jointly and severally represent and
warrant to the Placement Agent and the Purchaser as of the date
hereof and as of the Closing Date as follows:
4.1
Securities Laws Matters:
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(i)
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 (except for the Placement
Agent, as to which neither the Company nor the Trust make any
representation) 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 Securities.
(ii)
Neither the Company nor the Trust, nor any of their Affiliates, nor
any person acting on its or their behalf (except for the Placement
Agent, as to which neither the Company nor the Trust make any
representation) has (i) offered for sale or solicited offers to
purchase the Securities, (ii) engaged in any form of general
solicitation or general advertising (within the meaning of
Regulation D) in connection with any offer or sale of any of the
Securities, or (iii) engaged in any “directed selling
efforts” within the meaning of Regulation S under the
Securities Act (“Regulation S”) with respect to the
Securities.
(iii)
The Securities (i) are not and have not been listed on a national
securities exchange registered under section 6 of the Securities
Exchange Act of 1934, as amended (the “Exchange Act”),
or quoted on a U.S. automated interdealer quotation system and (ii)
are not of an open-end investment company, unit investment trust or
face-amount certificate company that are, or are required to be,
registered under section 8 of the Investment Company Act of 1940,
as amended (the “Investment Company Act”), and the
Securities otherwise satisfy the eligibility requirements of Rule
144A(d)(3) promulgated pursuant to the Securities Act (“Rule
144A(d)(3)”).
(iv)
Neither the Company nor the Trust is, and, immediately following
consummation of the transactions contemplated hereby and the
application of the net proceeds therefrom, neither the Company nor
the Trust 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.
(v)
Neither the Company nor the Trust has paid or agreed to pay to any
person or entity, directly or indirectly, any fees or other
compensation for soliciting another to purchase any of the
Securities, except for the Commission and/or any fee payable to the
Company’s introducing agent; provided, that such introducing
agent has an agreement with the Placement Agent.
4.2
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, 12 Del. C.
§3801, et seq . (the “Statutory Trust Act”)
with all requisite 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 to which it is a party. 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 condition (financial or
otherwise), earnings, business, prospects or assets of the Trust,
whether or not occurring in the ordinary course of business. The
Trust is not a party to, or otherwise bound by, any agreement other
than the Operative Documents. The Trust is, and under current law
will continue to be, classified for
8
federal income tax purposes as a
grantor trust and not as an association or publicly traded
partnership taxable as a corporation.
4.3
Trust Agreement . The Trust Agreement has been duly
authorized by the Company and, on the Closing Date specified in
Section 2.3.1 , will have been duly executed and delivered
by the Company and the Administrative Trustees of the Trust, and,
assuming due authorization, execution and delivery by the Property
Trustee and the Delaware Trustee, will be a legal, valid and
binding obligation of the Company and the Administrative Trustees,
enforceable against them in accordance with its terms, subject to
applicable bankruptcy, insolvency and similar laws affecting
creditors’ rights generally and to general principles of
equity. Each of the Administrative Trustees of the Trust is an
employee of the Company or one of its subsidiary banks and has been
duly authorized by the Company to execute and deliver the Trust
Agreement. To the knowledge of the Administrative Trustees, the
Trust is not in violation of any provision of the Statutory Trust
Act.
4.4
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 legal, valid and binding obligation of the
Company enforceable against it in accordance with its terms,
subject to applicable bankruptcy, insolvency and similar laws
affecting creditors’ rights generally and to general
principles of equity.
4.5
Preferred Securities and Common Securities . The Preferred
Securities and the Common Securities have been duly authorized by
the Trust and, when issued and delivered against payment therefor
on the Closing Date to the Purchaser in accordance with this
Agreement and the Subscription Agreement, in the case of the
Preferred Securities, and to the Company in accordance with the
Common Securities Subscription Agreement between the Company and
the Trust, dated as of the Closing Date, in the case of the Common
Securities, will be validly issued, fully paid and nonassessable
and will represent undivided beneficial interests in the assets of
the Trust entitled to the benefits of the Trust Agreement,
enforceable against the Trust in accordance with their terms,
subject to applicable bankruptcy, insolvency and similar laws
affecting creditors’ rights generally and to general
principles of equity. The issuance of the Securities is not 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 (each, a
“Lien”).
4.6
Junior Subordinated Notes . The Junior Subordinated Notes
have been duly authorized by the Company and, on 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 to the Trust against payment therefor in accordance with
the Junior Subordinated Note Subscription Agreement between the
Company and the Trust, dated as of the Closing Date, will
constitute legal, 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 applicable
bankruptcy, insolvency and similar laws affecting creditors’
rights generally and to general principles of equity.
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4.7
Placement Agreement . This Agreement has been duly
authorized, executed and delivered by the Company and the Trust and
constitutes the legal, valid and binding obligation of the Company
and the Trust, enforceable against the Company and the Trust in
accordance with its terms, subject to applicable bankruptcy,
insolvency and similar laws affecting creditors’ rights
generally and to general principles of equity.
4.8
Defaults . Neither the issue and sale of the Common
Securities, the Preferred Securities or the Junior Subordinated
Notes, nor the purchase of the Junior Subordinated Notes by the
Trust, the execution and delivery of and compliance with the
Operative Documents by the Company or the Trust, the consummation
of the transactions contemplated herein or therein, or the use of
the proceeds therefrom, (i) will conflict with or constitute a
breach of, or a default under, the Trust Agreement or the charter
or bylaws of the Company or any subsidiary of the Company or any
applicable law, statute, rule, regulation, judgment, order, writ or
decree of any government, governmental authority, 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”), (ii) will conflict with or constitute a violation
or breach of, or a default or Repayment Event (as defined below)
under, or result in the creation or imposition of any Lien upon any
property or assets of the Trust, the Company or any of the
Company’s subsidiaries pursuant to any contract, indenture,
mortgage, loan agreement, note, lease or other agreement or
instrument to which (A) the Trust, the Company or any of its
subsidiaries is a party or by which it or any of them may be bound,
or (B) any of the property or assets of any of them is subject, or
any judgment, order or decree of any court, Governmental Entity or
arbitrator, except, in the case of this clause (ii), for such
conflicts, breaches, violations, defaults, Repayment Events (as
defined below) or Liens which (X) would not, singly or in the
aggregate, adversely affect the consummation of the transactions
contemplated by the Operative Documents and (Y) would not, singly
or in the aggregate, have a material adverse effect on the
condition (financial or otherwise), earnings, business,
liabilities, prospects and assets (taken as a whole) or business
prospects of the Company and its subsidiaries taken as a whole,
whether or not occurring in the ordinary course of business (a
“Material Adverse Effect”) or (iii) require the
consent, approval, authorization or order of any court or
Governmental Entity. 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.
4.9
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 South Carolina, with
all requisite corporate power and authority to own, lease and
operate 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.
4.10
Subsidiaries of the Company . The Company has no
subsidiaries that are material to its business, financial condition
or earnings other than those subsidiaries listed in Schedule
1 attached hereto (the “Significant Subsidiaries”).
Each Significant Subsidiary has been duly organized and is validly
existing and in good standing under the laws of the jurisdiction in
which
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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. Each
Significant Subsidiary 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.
4.11
Government Licenses . Each of the Trust, the Company and
each of its subsidiaries hold all necessary approvals,
authorizations, orders, licenses, certificates and permits
(collectively, “Government Licenses”) of and from
Governmental Entities necessary to conduct its respective business
as now being conducted, and neither the Trust, the Company nor any
of the Company’s subsidiaries has received any notice of
proceedings relating to the revocation or modification of any such
Government License, except where the failure to be so licensed or
approved or the receipt of an unfavorable decision, ruling or
finding, would not, singly or in the aggregate, have a Material
Adverse Effect; all of the Government Licenses are valid and in
full force and effect, except where the invalidity or the failure
of such Government Licenses to be in full force and effect, would
not, 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, judgments, orders, decrees and
consents, except where the failure to be in compliance would not,
singly or in the aggregate, have a Material Adverse
Effect.
4.12
Stock . All of the issued and outstanding shares of capital
stock of the Company and each of its subsidiaries are validly
issued, fully paid and nonassesssable; all of the issued and
outstanding capital stock of each subsidiary of the Company is
owned by the Company, directly or through subsidiaries, free and
clear of any Lien, claim or equitable right other than as set forth
in Schedule 4.12 attached hereto; and none of the issued and
outstanding capital stock of the Company or any subsidiary was
issued in violation of any preemptive or similar rights arising by
operation of law, under the charter or by-laws of such entity or
under any agreement to which the Company or any of its subsidiaries
is a party.
4.13
Property . Each of the Trust, the Company and each
subsidiary 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 and defects, except for those that would not,
singly or in the aggregate, have 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 where the failure of such leases and subleases
to be in full force and effect would not, singly or in the
aggregate, 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 such leases or subleases, 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 for
such claims that would not, singly or in the aggregate, have a
Material Adverse Effect.
4.14
Conflicts, Authorizations and Approvals . Neither the
Company nor any of its subsidiaries is (i) in violation of its
respective charter, bylaws or similar organizational documents or
(ii) in default in the performance or observance of any obligation,
agreement, covenant or condition contained in any contract,
indenture, mortgage, loan agreement, note, lease
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or other agreement or instrument
to which either the Company or any such subsidiary 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, in the case
of clause (ii), where such default would not, singly or in the
aggregate, have a Material Adverse Effect. 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 performance by the Trust or the Company of their respective
obligations under the Operative Documents, as applicable, or the
consummation by the Trust and the Company of the transactions
contemplated by the Operative Documents.
4.15
Holding Company Registration and Deposit Insurance . The
Company is duly registered as a bank holding company under the Bank
Holding Company Act of 1956, as amended (the “ Bank
Holding Company Act ”), and the regulations of the Board
of Governors of the Federal Reserve System (the “ Federal
Reserve ”), 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 proceeding for the termination of such
insurance are pending or, to the knowledge of the Company or the
Trust after due inquiry, threatened.
4.16
Financial Statements .
(a)
The audited consolidated financial statements (including the notes
thereto) and schedules of the Company and its consolidated
subsidiaries at and for the three fiscal years ended December 31,
2004 (the “Financial Statements”) and the interim
unaudited consolidated financial statements of the Company and its
consolidated subsidiaries at and for the quarter and nine months
ended September 30, 2005 (the “Interim Financial
Statements”) provided to the Placement Agent are the most
recently available audited and unaudited consolidated financial
statements of the Company and its consolidated subsidiaries,
respectively, and fairly present in all material respects, in
accordance with U.S. generally accepted accounting principles
(“GAAP”), the financial position of the Company and its
consolidated subsidiaries, and the results of operations and
changes in financial condition as of the dates and for the periods
therein specified, subject, in the case of Interim Financial
Statements, to year-end adjustments (which are expected to consist
solely of normal recurring adjustments). Such consolidated
financial statements and schedules have been prepared in accordance
with GAAP consistently applied throughout the periods involved
(except as otherwise noted therein).
(b)
The Company’s report on FRY-9C, dated September 30, 2005 (the
“FRY-9C”), provided to the Placement Agent is the most
recently available such report, and the information therein fairly
presents in all material respects the financial position of the
Company and its subsidiaries. None of the Company or any of its
subsidiaries has been requested by a Governmental Entity to
republish, restate or refile any regulatory or financial
report.
(c)
Since the respective dates of the Financial Statements, Interim
Financial Statements and the FRY-9C, there has not been (A) any
material adverse change or development with respect to the
condition (financial or otherwise), earnings, business, assets or
business prospects of the Company and its subsidiaries, taken as a
whole, whether or not occurring in the ordinary course of business
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.
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(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 of the Securities and Exchange Commission
(“SEC”) thereunder.
4.17
Regulatory Enforcement Matters . None of the Trust, the
Company nor any of its subsidiaries, nor any of their respective
officers, directors, employees or representatives, is subject or is
party to, or has received any notice from any Regulatory Agency (as
defined below) that any of them will become subject or party to any
investigation with respect to, any cease-and-desist order,
agreement, civil monetary penalty, 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 or suggestion of, any Regulatory Agency
that, in any such case, 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
management or their business (each, a “Regulatory
Action”), nor has the Trust, the Company or any of its
subsidiaries been advised by any Regulatory Agency that it is
considering issuing or requesting any such Regulatory Action; and
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 Trust, the Company or any of its
subsidiaries, except where such unresolved violation, criticism or
exception would not, singly or in the aggregate, have a Material
Adverse Effect. If the Company is a bank holding company that is
subject to the Bank Holding Company Act, it is a
“well-run” bank holding company that satisfies the
criteria of the Federal Reserve’s regulations at 12 C.F.R.
§225.14(c). Each of the Company’s subsidiaries that is a
depository institution, the accounts of which are insured by the
FDIC (i) is “well-capitalized” within the meaning of 12
U.S.C. §1831o and applicable implementing regulations
thereunder; and (ii) is not, and has not been notified by any
Regulatory Agency that it is, in “troubled condition”
within the meaning of 12 U.S.C. §1831i and applicable
implementing regulations thereunder. 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 Trust, the Company or any
of its subsidiaries.
4.18
No Undisclosed Liabilities . None of the Trust, 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 that could
give rise to any such liability), except for (i) liabilities
set forth in the Financial Statements or the Interim Financial
Statements and (ii) normal fluctuations in the amount of the
liabilities referred to in clause (i) above occurring in the
ordinary course of
13
business of the Trust, the
Company and all of its subsidiaries since the date of the most
recent balance sheet included in such Financial
Statements.
4.19
Litigation . There is no action, suit or proceeding before
or by any Governmental Entity, arbitrator or court, domestic or
foreign, now pending or, to the knowledge of the Company or the
Trust after due inquiry, threatened against or affecting the Trust
or the Company or any of the Company’s subsidiaries, except
for such actions, suits or proceedings that, if adversely
determined, would not, singly or in the aggregate, adversely affect
the consummation of the transactions contemplated by the Operative
Documents or have a Material Adverse Effect; 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 subject, including
ordinary routine litigation incidental to the business, are not
expected to result in a Material Adverse Effect.
4.20
No Labor Disputes . No labor dispute with the employees of
the Trust, the Company or any of its subsidiaries exists or, to the
knowledge of the executive officers of the Trust or the Company, is
imminent, except those which would not, singly or in the aggregate,
have a Material Adverse Effect.
4.21
Filings with the SEC . The documents of the Company filed
with the SEC in accordance with the Exchange 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 SEC
(collectively, the “1934 Act Reports”), complied and
will comply in all material respects with the requirements of the
Exchange Act and the rules and regulations of the SEC thereunder
(the “1934 Act Regulations”), and, at the date of this
Agreement and on the Closing Date, 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 SEC
to which the Company or any of its subsidiaries is a party. The
Company is in compliance with all currently applicable requirements
of the Exchange Act that were added by the Sarbanes-Oxley Act of
2002.
4.22
Deferral of Interest Payments on Junior Subordinated Notes .
The Company has no present intention to exercise its option to
defer payments of interest on the Junior Subordinated Notes as
provided in the Indenture. The Company believes that the likelihood
that it would exercise its rights to defer payments of interest on
the Junior Subordinated Notes as provided in the Indenture at any
time during which the Junior
