EXHIBIT 1.1
PURCHASE AGREEMENT
AMONG
FIRST LITCHFIELD FINANCIAL CORPORATION,
FIRST LITCHFIELD STATUTORY TRUST II
AND
TWE, LTD.,
AS PURCHASER
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Dated as of June 16, 2006
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PURCHASE AGREEMENT
($3,000,000 TRUST PREFERRED SECURITIES)
THIS PURCHASE
AGREEMENT,
dated as of June 16,
2006, is entered
into
among, First
Litchfield
Financial Corporation, a Delaware corporation (the
"Company"), First Litchfield Statutory Trust II, a Delaware
statutory trust (the
"Trust," and,
together with the
Company, the
"Sellers"),
and TWE, Ltd., an
exempted company
incorporated under the
laws of the Cayman Islands (including
any assignee thereof, the "Purchaser").
WITNESSETH:
WHEREAS, the
Sellers propose to issue and sell 3,000
Floating Rate
Preferred Securities
of the Trust, having a stated 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
1.65% (the "Preferred Securities");
WHEREAS, the entire
proceeds from the sale of the Preferred 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
$3,093,000 in principal amount of the unsecured junior
subordinated notes of the Company (the "Junior Subordinated
Notes");
WHEREAS, the
Preferred Securities and the Common Securities of the
Trust will be issued
pursuant to the Amended and Restated Trust Agreement (the
"Trust Agreement"),
dated as of the Closing Date (as defined below), among the
Company, as depositor,
Wilmington Trust
Company, as property
trustee (in such
capacity, the
"Property Trustee"),
and as Delaware
trustee (in such capacity,
the "Delaware
Trustee"), the
Administrative
Trustees named therein (in such
capacities, the "Administrative Trustees"), and the holders from
time to time of
undivided beneficial interests in the assets of the Trust;
WHEREAS, the Preferred
Securities
will 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 (in such capacity,
the "Guarantee
Trustee"), for the
benefit from time to
time of the holders of
the Preferred
Securities; and
WHEREAS, the Junior
Subordinated
Notes will be issued
pursuant to a
Junior Subordinated
Indenture, dated as of
the Closing Date (the "Indenture"),
between the Company, and Wilmington Trust Company, as indenture
trustee (in such
capacity, the "Indenture Trustee").
NOW, THEREFORE,
in consideration of
the mutual agreements and subject
to the terms and
conditions herein
set forth,
the parties hereto agree as
follows:
Section 1.
Definitions.
The Preferred Securities, the Common
-----------
Securities and the Junior Subordinated Notes are collectively
referred to herein
as the "Securities." This Purchase Agreement, the Indenture, the Trust
Agreement, the
Guarantee Agreement and the
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Securities are collectively referred to herein as the "Operative
Documents." All
other capitalized
terms used but not
defined in this Purchase Agreement shall
have the meanings ascribed thereto in the Indenture.
Section 2. Purchase and Sale of the Preferred Securities.
---------------------------------------------
2.1 The Sellers agree
to sell to the
Purchaser, and the
Purchaser
agrees to purchase from the Sellers, the Preferred Securities for an aggregate
amount (the "Purchase
Price") equal to $3,000,000. In connection with the
purchase of the
Preferred Securities,
the Company shall pay a 0.0% fee (the
"Fee") to its introducing agent (the "Introducing Agent") for
services rendered.
The Purchaser shall be
responsible for the following expenses: (i) any 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 Purchaser.
The Purchaser shall
not be responsible for
any expenses set forth in Section 7
hereof unless
otherwise provided therein. The Trust shall use the
Purchase
Price, together
with the proceeds from
the sale of the Common
Securities, to
purchase the Junior Subordinated Notes.
2.2 Delivery
or transfer of, and payment for, the Preferred
Securities shall be
made at 11:00 A.M. New York City time, on June 16, 2006, or
such later date (not
later than July 14,
2006) as the parties
may designate
(such date and time of delivery and payment for the Preferred
Securities
being
herein called the "Closing Date"). On 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 Sellers made by wire transfer in
immediately available
funds to a U.S.
account designated in writing by the
Company.
2.3 Delivery
of the Preferred Securities shall be made at such
location, and in such names and denominations, as the Purchaser shall
designate
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 2:00 P.M. New York City time, on
the business
day prior to the Closing Date. The closing for the purchase and sale of the
Preferred Securities
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.
2.4 The Preferred Securities shall be 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 Sellers and
the
Purchaser have entered into this Agreement to set forth their
understanding
as
to their relationship and their respective rights, duties and
obligations.
2.5 Upon original
issuance thereof,
the Preferred
Securities and
Junior Subordinated
Notes certificates
shall each contain a legend as required
pursuant to any of the Operative Documents.
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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 Sellers
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 Purchaser 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 Purchaser and addressed to the Purchaser in
substantially the form set forth on Exhibit A-1 attached hereto and
incorporated
herein by this reference, (b) either (i) an opinion from Cranmore,
FitzGerald &
Meaney, counsel for
the Sellers, or (ii) an opinion 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 in substantially the form set forth on
Exhibit A-2 attached hereto and incorporated herein by this
reference, (c)
from
Thacher Proffitt & Wood LLP, special tax counsel for the
Purchaser and addressed
to the Purchaser
in substantially the form set forth on Exhibit A-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 and the Sellers, in substantially the form set forth on Exhibit
A-4 attached hereto
and incorporated
herein by this
reference,
and (e) from
Morris, James,
Hitchens & Williams LLP, special counsel to the Indenture
Trustee, the Property
Trustee, the Delaware Trustee and the
Guarantee Trustee
and addressed to the Purchaser and the Sellers, in substantially the form set
forth on Exhibit A-5 attached hereto and incorporated herein by this reference.
Each certificate
or 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 entity, the next subsequent
transferee that is not a warehouse entity (each, a "Subsequent
Purchaser") shall
be entitled to rely on such opinion.
3.3 Officer's
Certificate. The
Company shall have furnished to 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 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,
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prospects or
assets of the
Company and its subsidiaries, taken as a whole,
whether or not arising from transactions occurring in the ordinary course of
business.
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
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
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purchase of and
payment for the
Preferred Securities as described in this
Agreement shall (a)
not be prohibited by
any applicable
law or governmental
regulation, (b) not
subject the Purchaser to any penalty or, in the reasonable
judgment of the
Purchaser, 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 is
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 Sellers shall
-----------
have furnished
to the Purchaser and its counsel such further information,
certificates, opinions
and documents as the Purchaser or its counsel may
reasonably request.
Each certificate
signed by any trustee
of the Trust or any officer of
the Company and delivered to the Purchaser or its 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 Sellers. The
-------------------------------------------------
Sellers jointly and
severally represent
and warrant to the Purchaser as of the
date hereof and as of the Closing Date as follows:
4.1 Securities
Laws 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 (except for the Introducing
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.
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(b) Neither the Company nor the Trust, nor any of their
Affiliates,
nor any person acting
on its or their behalf
(except for the Purchaser and the
Introducing 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.
(c) 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)").
(d) 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.
(e) 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 Fee and/or
any other fee payable to the Company's Introducing Agent; provided, that such
Introducing Agent has an agreement with the Purchaser.
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. ss.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 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 2.2, 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
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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 its
subsidiary
bank 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
---------------------------------------
Agreement 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, 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.
4.7 Purchase
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.
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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,
to the
extent a party thereto, 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 its
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
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Company has been duly
incorporated and is
validly existing as a corporation in
good standing under the laws of Delaware, 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 I 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 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
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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; Laws. 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 its 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 nonassessable;
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; 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 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
9
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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, 2005 (the "Financial
Statements") and the interim unaudited consolidated financial statements
of the
Company and its consolidated subsidiaries at and for the quarter
ended March 31,
2006, (the "Interim
Financial Statements") provided to the Purchaser 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 December 31, 2005 (the
"FRY-9C"), provided to the Purchaser 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.
(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
10
<PAGE>
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.
ss.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.
ss.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. ss.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
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
11
<PAGE>
of the Company or the Trust after due inquiry, threatened against or affecting
the Trust or the Company or any of its 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 did not, 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 and the
1934 Act Regulations 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 Subordinated Notes
are outstanding
is remote because of
the restrictions
that would be imposed
on the Company's
ability to declare or pay dividends or distributions on, or to
redeem, purchase,
acquire or make a
liquidation payment
with respect to, any of the
Company's
capital stock and on
the Company's
ability to make any
payments of principal,
interest or
premium on, or repay, repurchase or redeem, any of its debt
securities that rank
pari passu in all
respects with or
junior in interest to
the Junior Subordinated Notes.
4.23 Tax Returns. The Company and each of the Significant
------------
Subsidiaries have timely and duly filed all Tax Returns (defined
below) required
to be filed by them, and all such Tax Returns are true,
correct and complete
in
all material respects. The Company and each of the Significant
Subsidiaries have
timely and duly paid
in full all material
Taxes required to be
12
<PAGE>
paid by them (whether
or not such amounts
are shown as due on any Tax Return).
There are no federal,
state, or other Tax audits or deficiency assessments
proposed or
pending with respect to the Company or any of the Significant
Subsidiaries, and no
such audits or assessments are threatened. As used herein,
the terms "Tax" or
"Taxes" mean (i) all
federal, state, local, and foreign
taxes, and other
assessments of a
similar nature (whether imposed directly or
through withholding),
including any
interest, additions to tax, or penalties
applicable thereto, imposed by any Governmental Entity, and (ii)
all liabilities
in respect
of such amounts arising as a result of being a member of any
affiliated,
consolidated, combined, unitary or similar group, as a successor
to
another person or by contract. As used herein, the term "Tax
Returns" means all
federal, state,
local, and foreign Tax returns, declarations, statements,
reports, schedules,
forms, and information
returns and any
amendments thereto
filed or required to be filed with any Governmental Entity.
4.24 Taxes. The Trust
is not subject to United States federal income
-----
tax with respect to income received or accrued on the Junior
Subordinated Notes,
interest payable by the Company on the Junior Subordinated Notes is deductible
by the Company,
in whole or in part,
for United States federal income tax
purposes, and the
Trust is not, or will
not be within ninety
(90) days of the
date hereof, subject
to more than a de minimis amount of other taxes, duties or
other governmental
charges. There are no rulemaking or similar proceedings
before the United States Internal Revenue Service or comparable
federal, state,
local or foreign
government bodies
which involve or
affect the Company or any
subsidiary, which, if the subject of an action unfavorable to the
Company or any
subsidiary, could result in a Material Adverse Effect.
4.25 Books and Records. The books, records and accounts of
the Company
-----------------
and its subsidiarie
