52,000,000 7% Trust Preferred
Securities
$25.00 liquidation amount per Trust
Preferred Security
guaranteed to the extent set forth in the Prospectus referred to
herein by
COUNTRYWIDE FINANCIAL
CORPORATION
Citigroup
Global Markets Inc.
J.P. Morgan Securities Inc.,
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
Morgan Stanley & Co. Incorporated
UBS Securities LLC
Wachovia Capital Markets, LLC
as Representatives of the several Underwriters
c/o Citigroup Global Markets Inc.
390
Greenwich Street
New
York, New York 10013
Countrywide
Capital V (the “Trust”), a statutory trust organized
under the Statutory Trust Act (the “Delaware Act”) of
the State of Delaware (Chapter 38, Title 12, of the Delaware
Business Code, 12 Del. C. Section 3801 et seq .),
proposes, upon the terms and conditions set forth herein, to issue
and sell 52,000,000 7% trust preferred securities with an aggregate
liquidation amount equal to $1,300,000,000 (the “Initial
Trust Preferred Securities”) to the several Underwriters
named in Schedule I hereto (the “Underwriters”),
for whom you (the “Representatives”) are acting as
representatives. In addition, the Trust has granted to the
Underwriters, acting severally and not jointly, an option to
purchase up to an additional 7,800,000 trust preferred securities
(the “Optional Trust Preferred Securities” and
collectively with the Initial Trust Preferred Securities, the
“Trust Preferred Securities”), as provided in
Section 2 hereof
The
Trust Preferred Securities and the Common Securities (as defined
herein) are to be issued pursuant to the terms of a declaration of
trust, to be amended and restated as of the Closing Date (as
defined in Section 4 hereof) (the “Declaration”),
among Countrywide Financial Corporation (“CFC”, and
together with the Trust, the “Offerors”), the trustees
named therein (the “Countrywide Capital Trustees”) and
the holders from time to time of undivided beneficial
interests in
the assets of the Trust. The Declaration is qualified as an
indenture under the Trust Indenture Act of 1939, as amended
(together with the rules and regulations thereunder, the
“1939 Act”). Pursuant to the Declaration, the number of
Countrywide Capital Trustees will initially be five. Three of the
Countrywide Capital Trustees (the “Regular Trustees”)
will be persons who are employees or officers of CFC. The fourth
Countrywide Capital Trustee will be a financial institution
unaffiliated with CFC that will serve as property trustee under the
Declaration and as indenture trustee with respect to the Trust
Preferred Securities for purposes of the 1939 Act (the
“Institutional Trustee”). The fifth Countrywide Capital
Trustee will be a financial institution or an affiliate thereof
which maintains a principal place of business in the State of
Delaware, meeting the requirements of the Delaware Act (the
“Delaware Trustee”). Initially, The Bank of New York, a
New York banking corporation, will act as the Institutional Trustee
and The Bank of New York (Delaware), a banking association with its
principal place of business in the State of Delaware, will act as
the Delaware Trustee until removed or replaced by the holder of the
Common Securities. The Trust Preferred Securities will be
guaranteed by CFC on a subordinated basis with respect to
distributions and payments upon liquidation, redemption or
otherwise pursuant to the Trust Preferred Securities Guarantee
Agreement, to be dated as of the Closing Date, (the “Trust
Preferred Securities Guarantee”) among CFC and The Bank of
New York, as Trustee (the “Trust Preferred Securities
Guarantee Trustee”). The assets of the Trust will consist of
$1,301,000,000 aggregate principal amount of 7% Junior Subordinated
Deferrable Interest Debentures due 2036 (the “Subordinated
Debentures”) of CFC which will be issued under an indenture,
dated as of the Closing Date, as supplemented by a first
supplemental indenture thereto, to be dated as of the Closing Date
(together, the “Indenture”), among CFC and The Bank of
New York, as Trustee (the “Indenture Trustee”). Under
certain circumstances, the Subordinated Debentures will be
distributable to the holders of undivided beneficial interests in
the assets of the Trust. The Trust Preferred Securities, the Trust
Preferred Securities Guarantee and the Subordinated Debentures are
referred to herein as the “Securities”.
The
Offerors wish to confirm as follows their agreement with you and
the other several Underwriters on whose behalf you are acting, in
connection with the several purchases of the Trust Preferred
Securities by the Underwriters.
1.
Registration Statement and Prospectus . The Offerors have
prepared and filed with the Securities and Exchange Commission (the
“Commission”) in accordance with the provisions of the
Securities Act of 1933, as amended (the “1933 Act”),
and the rules and regulations of the Commission thereunder (the
“1933 Act Regulations”), an automatic shelf
registration statement on Form S-3 (File No. 333-131707) under
the 1933 Act, which contains a prospectus (the “Base
Prospectus”) relating to, among other things, the Trust
Preferred Securities . Such registration statement (as
amended), at each time of effectiveness under the 1933 Act and the
1933 Act Regulations, including the information deemed to be a part
thereof at such time pursuant to Rule 430B of the 1933 Act
Regulations or pursuant to the Securities Exchange Act of 1934, as
amended (the “1934 Act”), and the rules and regulations
of the Commission thereunder (the “1934 Act
Regulations”), are collectively referred to herein as the
“Registration Statement”; provided, however, that the
term “Registration Statement” shall be deemed to
include information contained in the Prospectus Supplement (as
defined below) that is retroactively deemed to be a part of such
registration statement (as amended) as of the time specified in
Rule 430B of the 1933 Act Regulations. The Base Prospectus and
the final prospectus supplement relating to the offering of the
Trust Preferred Securities (the “Prospectus
2
Supplement”), in the form first filed with
the Commission under Rule 424 or made available to the
Underwriters by the Offerors for use in connection with the
offering of the Trust Preferred Securities, are collectively
referred to herein as the “Prospectus”. A
“preliminary prospectus” means any preliminary
prospectus supplement relating to the Trust Preferred Securities
and the offering thereof, together with the Base Prospectus. All
references to the Registration Statement, the Prospectus or any
preliminary prospectus shall also be deemed to include all
documents incorporated therein by reference pursuant to
Item 12 of Form S-3 under the 1933 Act. All references to
amendments or supplements to the Registration Statement, the
Prospectus or any preliminary prospectus shall be deemed to include
the filing of any document under the 1934 Act which is incorporated
by reference in the Registration Statement, the Prospectus or such
preliminary prospectus, as the case may be, after the most recent
effective date prior to the execution of this Agreement, in the
case of the Registration Statement, or the respective issue dates,
in the case of the Prospectus and any preliminary prospectus. For
purposes of this Agreement, all references to the Registration
Statement, the Prospectus or any preliminary prospectus or to any
amendment or supplement to any of the foregoing shall be deemed to
be the electronically transmitted copy thereof filed with the
Commission pursuant to its Electronic Data Gathering, Analysis and
Retrieval system (“EDGAR”).
All references to
financial statements and schedules and other information which is
“contained,” “included” or
“stated” (or other references of like import) in the
Registration Statement, the Prospectus or any preliminary
prospectus or any amendment or supplement thereto shall be deemed
to include all such financial statements and schedules and other
information which is incorporated therein by reference, as the case
may be.
2.
Agreements to Sell and Purchase . The Trust hereby agrees,
subject to all the terms and conditions set forth herein, to issue
and sell to each Underwriter and, upon the basis of the
representations, warranties and agreements of the Offerors herein
contained and subject to all the terms and conditions set forth
herein, each Underwriter agrees, severally and not jointly, to
purchase from the Trust, at a purchase price of $25.00 per Trust
Preferred Security, the number of Trust Preferred Securities set
forth opposite the name of such Underwriter in Schedule I
hereto (or such number of Trust Preferred Securities increased as
set forth in Section 10 hereof).
CFC
agrees that, in view of the fact that the proceeds of the sale of
the Trust Preferred Securities will be invested in the Subordinated
Debentures, it shall pay to the Underwriters as compensation
(“Underwriters’ Compensation”) for their
arranging the investment of the proceeds therein, on the Closing
Date, $0.7875 per Trust Preferred Security (for sales to certain
institutions, the Underwriters’ Compensation will be $0.50
per Trust Preferred Security).
In
addition, on the basis of the representations, warranties and
agreements herein contained, and upon the terms but subject to the
conditions herein set forth, the Trust hereby grants an option to
the several Underwriters to purchase, severally and not jointly, up
to an aggregate of 7,800,000 Optional Trust Preferred Securities
from the Trust at the purchase price per Trust Preferred Securities
to be paid by the Underwriters for the Initial Trust Preferred
Securities. The option granted hereunder may be exercised at any
time and from time to time upon notice by the Underwriters to the
Trust, which notice may be given at any time within 30
3
days from the
date of this Agreement. Such notice shall set forth (i) the
aggregate number of Optional Trust Preferred Securities as to which
the Underwriters are exercising the option, (ii) the names and
denominations in which the certificates for the Optional Trust
Preferred Securities are to be registered and (iii) the time,
date and place at which such certificates will be delivered (which
time and date may be simultaneous with, but not earlier than, the
Closing Date as defined in Section 4 hereto; and in such case
the term “Closing Date” shall refer to the time and
date of delivery of certificates for the Initial Trust Preferred
Securities and the Optional Trust Preferred Securities). Each time
and date of delivery, if subsequent to the Closing Date, is called
a “Subsequent Closing Date” and shall be determined by
the Underwriters and shall not be earlier than three nor later than
five full business days after delivery of such notice of exercise.
If any Optional Trust Preferred Securities are to be purchased,
each Underwriter agrees, severally and not jointly, to purchase the
number of Optional Trust Preferred Securities that bears the same
proportion to the total number of Optional Trust Preferred
Securities to be purchased as the number of Initial Trust Preferred
Securities set forth on Schedule A opposite the name of such
Underwriter bears to the total number of Initial Trust Preferred
Securities.
3.
Terms of Public Offering . The Offerors have been advised by
you that the Underwriters propose to make a public offering of
their respective portions of the Trust Preferred Securities as soon
as the Underwriters deem advisable after this Agreement has been
executed and delivered. The entire proceeds from the sale of the
Trust Preferred Securities will be combined with the entire
proceeds from the sale by the Trust to CFC of its common securities
(the “Common Securities”), and will be used by the
Trust to purchase Subordinated Debentures in a principal amount
equal to such proceeds.
4.
Delivery of the Trust Preferred Securities and Payment
Therefor . Delivery to the Underwriters of and payment for the
Trust Preferred Securities shall be made at the office of Sidley
Austin llp , 787
Seventh Avenue, New York, New York 10019, at 9:30 A.M., New York
City time, on November 8, 2006 (the “Closing
Date”). The place of closing for the Trust Preferred
Securities and the Closing Date may be varied by written agreement
between you and CFC.
The
Trust Preferred Securities shall be delivered to you for the
accounts of the several Underwriters registered in the name of Cede
& Co., as nominee for The Depository Trust Company, against
payment of the purchase price therefor in immediately available
funds. The Trust Preferred Securities to be delivered to the
Underwriters shall be made available to you in New York City for
inspection and packaging not later than 9:30 A.M., New York City
time, on the business day next preceding the Closing
Date.
5.
Agreements of the Offerors and the Underwriters . The
Offerors jointly and severally agree with the several Underwriters
as follows:
(i) Compliance
with Securities Regulations and Commission Requests. The
Offerors, subject to Section 5(ii) hereof, will comply with
the requirements of Rule 430B and will notify the Underwriters
immediately, and confirm the notice in writing if requested by the
Underwriters, upon the occurrence of any of the following events
after the date hereof and prior to completion of the distribution
of the Trust Preferred Securities, (i) when any post-effective
amendment to the Registration Statement shall
4
become
effective, or any amendment or supplement to the Prospectus or any
preliminary prospectus shall have been filed, (ii) of the
receipt of any comments from the Commission, (iii) of any
request by the Commission for any amendment to the Registration
Statement or any amendment or supplement to the Prospectus or for
additional information, and (iv) of the issuance by the
Commission of any stop order suspending the effectiveness of the
Registration Statement or of any order objecting to, preventing or
suspending the use of the Prospectus or any preliminary prospectus,
or of the suspension of the qualification of the Trust Preferred
Securities for offering or sale in any jurisdiction, or of the
initiation or threatening of any proceedings for any of such
purposes. The Offerors will promptly effect the filings necessary
pursuant to Rule 424(b) and will take such steps as they deem
necessary to ascertain promptly whether the form of prospectus
relating to the Trust Preferred Securities transmitted for filing
under Rule 424(b) was received for filing by the Commission and, in
the event that it was not, it will promptly file such prospectus.
The Offerors will use their best efforts to prevent the issuance of
any stop order, or any notice objecting to the use of the
Registration Statement, and, if any stop order or notice is issued,
to obtain the lifting thereof at the earliest possible
moment.
(ii) Filing of
Amendments. From the date hereof until the later of
(x) the completion of the distribution of the Trust Preferred
Securities and (y) the Closing Date, the Offerors will give
the Underwriters notice of its intention to file or prepare a new
registration statement containing the Prospectus or any amendment
to the Registration Statement, the General Disclosure Package (as
defined Section 6(a)(xvii)) or any amendment or supplement to
the Base Prospectus, any preliminary prospectus or the Prospectus,
whether pursuant to the 1933 Act, the 1934 Act or otherwise, will
furnish the Underwriters with copies of any such documents a
reasonable amount of time prior to such proposed filing or use, as
the case may be, and will not file or use any such document to
which the Underwriters or counsel for the Underwriters shall
reasonably object on a timely basis.
(iii) Delivery
of Registration Statements. The Offerors have furnished, will
deliver or have made available, to the Underwriters and counsel for
the Underwriters, without charge, copies of the Registration
Statement as originally filed and any new registration statement
containing the Prospectus and, in each case, any amendment thereto
(including exhibits filed therewith or incorporated by reference
therein and documents incorporated or deemed to be incorporated by
reference therein) and copies of all consents and certificates of
experts. The copies of the Registration Statement, any new
registration statement containing the Prospectus, the Disclosure
Package and, in each case, any amendment thereto furnished to the
Underwriters will be identical to the electronically transmitted
copies thereof filed with the Commission pursuant to EDGAR, except
to the extent permitted by Regulation S-T.
(iv) Delivery
of Prospectuses. The Offerors have delivered to the
Underwriters, without charge, as many copies of each preliminary
prospectus and any amendment or supplement thereto as the
Underwriters reasonably requested, and the Offerors hereby consent
to the use of such copies for purposes permitted by the 1933 Act.
The Offerors will furnish or make available to the Underwriters,
without charge, during
5
the period when
the Prospectus is required to be delivered (or but for the
exemption afforded by Rule 172 of the 1933 Act Regulations
would be required to be delivered) under the 1933 Act or the 1934
Act, such number of copies of the Prospectus (as amended or
supplemented) and any Issuer Free Writing Prospectuses as the
Underwriters may reasonably request. Each preliminary prospectus,
the Prospectus, any Issuer Free Writing Prospectus and any
amendments or supplements thereto furnished to the Underwriters
will be identical to the electronically transmitted copies thereof
filed with the Commission pursuant to EDGAR, except to the extent
permitted by Regulation S-T.
(v) Continued
Compliance with Securities Laws. The Offerors will comply with
the 1933 Act and the 1933 Act Regulations and the 1934 Act and the
1934 Act Regulations so as to permit the completion of the
distribution of the Trust Preferred Securities as contemplated in
this Agreement and in the Prospectus. If at any time when the
Prospectus is required to be delivered (or but for the exemption
afforded by Rule 172 of the 1933 Act Regulations would be
required to be delivered) under the 1933 Act in connection with
sales of the Trust Preferred Securities, any event shall occur or
condition shall exist as a result of which it is necessary, in the
reasonable opinion of counsel for the Underwriters to amend the
Registration Statement in order that the Registration Statement
will not contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to
make the statements therein not misleading or amend or supplement
the Prospectus or the General Disclosure Package in order that the
Prospectus or the General Disclosure Package will not include any
untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements therein not
misleading in the light of the circumstances existing at the time
it is delivered or conveyed to a purchaser, or if it shall be
necessary, in the reasonable opinion of such counsel, at any such
time to amend the Registration Statement or amend or supplement the
Prospectus or the General Disclosure Package in order to comply
with the requirements of the 1933 Act or the 1933 Act Regulations,
the Offerors will promptly prepare and file with the Commission,
subject to Section 5(ii) and Section 5(vii), such
amendment or supplement as may be necessary to correct such
statement or omission or to make the Registration Statement, the
Prospectus or the General Disclosure Package comply with such
requirements, and the Offerors will furnish or make available to
the Underwriters such number of copies of such amendment or
supplement as the Underwriters may reasonably request.
(vi) Final Term
Sheet . The Offerors will prepare a final term sheet, in the
form approved by the Underwriters and included in Schedule II
to this Agreement, for the Trust Preferred Securities and will file
such term sheet pursuant to Rule 433(d) of the 1933 Act Regulations
within the time required by such rule (the “Final Term
Sheet”). The Final Term Sheet is an Issuer Free Writing
Prospectus for purposes of this Agreement.
(vii) Permitted
Free Writing Prospectus . The Offerors represent that they have
not made, and agree that, unless they obtain the prior written
consent of the Underwriters, they will not make, any offer relating
to the Trust Preferred Securities that would constitute an Issuer
Free Writing Prospectus or that would otherwise constitute a
“free writing prospectus” (as defined in Rule 405
of the 1933 Act Regulations) required to be
6
filed by the
Offerors with the Commission or retained by CFC under Rule 433
of the 1933 Act Regulations; provided that the prior written
consent of the Underwriters shall be deemed to have been given in
respect of each Issuer Free Writing Prospectus, if any, that is
included in Schedule II to this Agreement. Any such free
writing prospectus consented to by the Underwriters is hereinafter
referred to as a “Permitted Free Writing Prospectus”.
The Offerors agree that (i) they have treated and will treat,
as the case may be, each Permitted Free Writing Prospectus as an
Issuer Free Writing Prospectus, and (ii) have complied and
will comply, as the case may be, with the requirements of
Rules 164 and 433 of the 1933 Act Regulations applicable to
any Permitted Free Writing Prospectus, including in respect in
timely filing with the Commission, legending and record keeping.
The Underwriters agree that, unless they obtain the prior written
consent of CFC, they will not make any offer relating to the Trust
Preferred Securities that would constitute a “free writing
prospectus” (as defined in Rule 405 of the 1933 Act
Regulations) required to be filed with the Commission under
Rule 433 of the 1933 Act Regulations; provided that the prior
written consent of CFC shall be deemed to have been given in
respect of any free writing prospectus that (a) is not an
“issuer free writing prospectus” (as defined in
Rule 433 of the 1933 Act Regulations), and (b) contains
only (i) information describing the preliminary terms of the
Trust Preferred Securities or their offering, (ii) information
permitted by Rule 134 of the 1933 Act Regulations or
(iii) information that describes the final terms of the Trust
Preferred Securities or their offering and that is included in the
Final Term Sheet contemplated in Section 5(vi).
(viii)
Registration Statement Renewal Deadline . If immediately
prior to the third anniversary (the “Renewal Deadline”)
of the initial effective date of the Registration Statement, any of
the Trust Preferred Securities remain unsold by the Underwriters,
the Offerors will prior to the Renewal Deadline file, if they have
not already done so, a new automatic shelf registration statement
that includes the Trust Preferred Securities, in a form reasonably
satisfactory to the Underwriters, or, if no longer eligible to file
such an automatic registration statement, a new shelf registration
statement that includes the Trust Preferred Securities and will use
their respective reasonable best efforts to cause such registration
statement to be declared effective within 180 days after the
Renewal Deadline. The Offerors will take all other action
reasonably necessary or appropriate to permit the public offering
and sale of the Trust Preferred Securities to continue as
contemplated in the expired registration statement relating to such
securities. References herein to the Registration Statement shall
include such new shelf registration statement.
(ix) Notice of
Inability to Use Automatic Shelf Registration Statement Form .
If at any time when Trust Preferred Securities remain unsold by the
Underwriters, the Offerors receive from the Commission a notice
pursuant to Rule 401(g)(2) or otherwise cease to be eligible
to use the automatic shelf registration statement form, the
Offerors will (i) promptly notify the Underwriters,
(ii) promptly file a new registration statement or
post-effective amendment on the proper form relating to the Trust
Preferred Securities, in a form reasonably satisfactory to the
Underwriters, (iii) use their respective reasonable best
efforts to cause such registration statement or post-effective
amendment to be declared effective as promptly as practicable and
(iv) promptly notify the Underwriters of such effectiveness.
The Offerors will take all other action reasonably necessary or
appropriate to permit the public offering and sale of the Trust
Preferred Securities to
7
continue as
contemplated in the registration statement that was the subject of
the Rule 401(g)(2) notice or for which the Offerors have otherwise
become ineligible. References herein to the Registration Statement
shall include such new registration statement or post-effective
amendment, as the case may be.
(x) Filing
Fees . CFC agrees to pay the required Commission filing fees
relating to the Trust Preferred Securities within the time required
by Rule 456(b)(1) of the 1933 Act Regulations without regard
to the proviso therein and otherwise in accordance with Rules
456(b) and 457(r) of the 1933 Act Regulations.
(xi) Blue Sky
Qualifications. The Offerors will use its reasonable efforts,
in cooperation with the Underwriters, to qualify the Trust
Preferred Securities for offering and sale under the applicable
securities laws of such states and other jurisdictions (domestic or
foreign) as the Underwriters may designate and will arrange for the
determination of the legality of the Trust Preferred Securities for
purchase by institutional investors; provided, however, that the
Offerors shall not be obligated to file any general consent to
service of process or to qualify as a foreign corporation or as a
dealer in securities in any jurisdiction in which it is not so
qualified or to subject itself to taxation in respect of doing
business in any jurisdiction in which it is not otherwise so
subject. In each jurisdiction in which the Trust Preferred
Securities have been so qualified, the Offerors will file such
statements and reports as may be required by the laws of such
jurisdiction to continue such qualification in effect so long as
may be required in connection with the offering of the Trust
Preferred Securities.
(xii) Lock
–up. CFC agrees, during the period beginning on the date
of this Agreement and continuing to and including the date that is
30 days after the Closing Date, not to offer, sell, contract
to offer, sell or otherwise dispose of any preferred securities,
any preferred stock or any other securities (including any backup
undertakings for such preferred stock or other securities) of CFC,
in each case that are substantially similar to the Trust Preferred
Securities, the Trust Preferred Securities Guarantee or any
securities convertible into or exchangeable for the aforementioned
securities, or such substantially similar securities of CFC, except
the Trust Preferred Securities or securities issued pursuant to
CFC’s stock option or other benefit or incentive plans
maintained for its officers, directors or employees or pursuant to
CFC’s dividend reinvestment and stock purchase plan, without
the prior written consent of Citigroup Global Markets
Inc.
(xiii) Use of
Proceeds . The Trust will apply the net proceeds from the sale
of the Trust Preferred Securities, and CFC will apply the net
proceeds from the sale of the Subordinated Debentures,
substantially in accordance with the description set forth in the
Prospectus and the General Disclosure Package.
(xiv) Issuances
by CFC. CFC agrees to issue the Trust Preferred Securities
Guarantee and the Subordinated Debentures concurrently with the
issuance and sale of the Trust Preferred Securities as contemplated
herein.
(xv) Exchange
Listing. CFC will use its best efforts to list, subject to
notice of issuance, (A) the Trust Preferred Securities and
(B) the Subordinated Debentures, upon
8
the liquidation
of the Trust to holders of the Trust Preferred Securities, in each
case on the New York Stock Exchange.
(xvi) Earnings
Statement. The Offerors will timely file such reports pursuant
to the 1934 Act as are necessary in order to make generally
available to its securityholders as soon as practicable an earnings
statement for the purposes of, and to provide the benefits
contemplated by, the last paragraph of Section 11(a) of the 1933
Act and Rule 158 of the 1933 Act Regulations.
(xvii)
Reporting Requirements . The Offerors, during the period
when the Prospectus is required to be delivered (or but for the
exemption afforded by Rule 172 of the 1933 Act Regulations
would be required to be delivered) under the 1933 Act or the 1934
Act, will file all documents required to be filed with the
Commission pursuant to the 1934 Act within the time periods
required by the 1934 Act and the 1934 Act Regulations.
(xviii)
Distribution by the Underwriters. The Underwriters will
undertake to sell the Trust Preferred Securities to a minimum of
400 beneficial holders, in order to satisfy one of the requirements
for listing the Trust Preferred Securities on the New York Stock
Exchange.
6.
Representations and Warranties of the Offerors .
(a) The Offerors jointly and severally represent and warrant
to each Underwriter as of the date hereof, the Applicable Time and
as of the Closing Date, and agree with each Underwriter
that:
(i) (A) At
the time of filing the Registration Statement, (B) at the time
of the most recent amendment thereto for the purposes of complying
with Section 10(a)(3) of the 1933 Act (whether such amendment
was by post-effective amendment, incorporated report filed pursuant
to Section 13 or 15(d) of the 1934 Act or form of prospectus),
(C) at the time CFC or any person acting on its behalf (within
the meaning, for this clause only, of Rule 163(c) of the 1933 Act
Regulations) made any offer relating to the Trust Preferred
Securities in reliance on the exemption of Rule 163 of the
1933 Act Regulations, and (D) on the date of this Agreement
(with such date being used as the determination date for purposes
of this clause (D)), CFC was and is a “well-known seasoned
issuer” (as defined in Rule 405 of the 1933 Act
Regulations). The Registration Statement is an “automatic
shelf registration statement”, as defined in Rule 405 of
the 1933 Act Regulations, that initially became effective within
three years of the date hereof, and CFC has not received from the
Commission any notice pursuant to Rule 401(g)(2) of the 1933
Act Regulations objecting to use of the automatic shelf
registration statement form and CFC has not otherwise ceased to be
eligible to use the automatic shelf registration statement
form.
The
Registration Statement, at each time of effectiveness under the
1933 Act and the 1933 Act Regulations (each, an “Effective
Date”), did not contain, and any post-effective amendment
thereto, at such date, did not contain, any 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 not
misleading. The Registration Statement, at each
9
Effective Date,
complied, and the Prospectus, at the time it is filed with the
Commission pursuant to Rule 424(b) under the 1933 Act, and as
amended or supplemented, if applicable, when so filed, will comply,
in all material respects with the 1933 Act, the 1933 Act
Regulations and the 1939 Act. The Prospectus, as of its date, did
not include, and, as amended or supplemented, if applicable, as of
the Closing Date (and if any Optional Trust Preferred Securities
are purchased by the Underwriters, at each Subsequent Closing Date,
as applicable), will not include, any untrue statement of a
material fact or omit to state a material fact necessary in order
to make the statements therein, in the light of the circumstances
under which they were made, not misleading. The representations and
warranties in this subsection shall not apply to
(i) statements in or omissions from the Registration Statement
or the Prospectus made in reliance upon and in conformity with
information furnished to CFC in writing by the Underwriters
expressly for use in the Registration Statement or the Prospectus
or (ii) to that part of the Registration Statement which shall
constitute the Statement of Eligibility (Form T-1) under the Trust
1939 Act of the Institutional Trustee, the Trust Preferred
Securities Guarantee Trustee and the Indenture Trustee. The
preliminary prospectus and the Prospectus delivered or made
available to the Underwriters for use in connection with the
offering of the Trust Preferred Securities was identical to the
electronically transmitted copies thereof filed with the Commission
pursuant to EDGAR, except to the extent permitted by
Regulation S-T.
(ii) Neither CFC
nor any of its subsidiaries is in violation of its corporate
charter or bylaws or in default under any agreement, indenture or
instrument to which CFC or any of its subsidiaries is a party, the
effect of which violation or default would be material to CFC and
its subsidiaries considered as a whole; the execution, delivery and
performance of this Agreement, the Indenture, the Declaration, the
Trust Preferred Securities Guarantee, and consummation of the
transactions contemplated hereunder and thereunder will not
conflict with, result in the creation or imposition of any lien,
charge or encumbrance upon any of the assets of CFC or any of its
subsidiaries pursuant to the terms of, or constitute a default
under, any agreement, indenture or instrument, or result in a
violation of the charter or by-laws of CFC or any order, rule or
regulation of any court or governmental agency having jurisdiction
over CFC or any of its subsidiaries; and except as required by the
1933 Act, the 1939 Act, the 1934 Act and applicable state
securities laws, no consent, authorization or order of, or filing
or registration with, any court or governmental agency is required
for the execution, delivery and performance of this Agreement, the
Indenture, the Declaration and the Trust Preferred Securities
Guarantee.
(iii) Since the
respective dates as of which information is given in the
Registration Statement, the Prospectus and the General Disclosure
Package, except as otherwise stated therein, (A) there has
been no material adverse change, or event reasonably likely to
result in a material adverse change, in the condition, financial or
otherwise, or in the earnings or business affairs of CFC or any of
its subsidiaries considered as one enterprise, whether or not
arising in the ordinary course of business (a “Material
Adverse Effect”), and (B) there have been no transactions
entered into by CFC or any of its subsidiaries, other than those in
the ordinary course of business, which are material with respect to
CFC and its subsidiaries considered as one enterprise.
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(iv) KPMG LLP,
whose reports have been included in the Prospectus and incorporated
by reference or included in CFC’s Annual Report on Form 10-K
for the fiscal years ending December 31, 2004 and
December 31, 2005, which are incorporated by reference in the
Registration Statement, the Prospectus and the General Disclosure
Package, is an independent registered public accounting firm as
required by the 1933 Act and the 1933 Act Regulations and was
independent with respect to CFC at the time it delivered such
reports. Grant Thornton LLP, whose report has been incorporated by
reference or included in CFC’s Annual Report on Form 10-K for
the fiscal year ending December 31, 2003, which is
incorporated by reference in the Registration Statement, the
Prospectus and the General Disclosure Package, is an independent
registered public accounting firm as required by the 1933 Act and
the 1933 Act Regulations and was independent with respect to CFC at
the time it delivered such reports.
(v) This Agreement
has been duly authorized, executed and delivered by CFC and the
Trust.
(vi) (i) Each
of the Indenture and the Trust Preferred Securities Guarantee have
been duly authorized by CFC and at the Closing Date will have been
validly executed and delivered by CFC and each, when so executed
(assuming the due authorization, execution and delivery of such
instrument by each other party thereto), will constitute the
legally binding obligation of CFC, enforceable in accordance with
its terms subject to bankruptcy, insolvency, reorganization,
fraudulent transfer, fraudulent conveyance, moratorium or other
laws affecting creditors’ rights generally and general
principles of equity; and each of the Indenture and the Trust
Preferred Securities Guarantee has been duly qualified under the
1939 Act, (ii) the Subordinated Debentures have been duly
authorized and, when validly executed and delivered by CFC,
authenticated in accordance with the provisions of the Indenture
and delivered to the Trust against payment therefor in accordance
with the terms hereof, will constitute legally binding obligations
of CFC enforceable in accordance with their terms subject to
bankruptcy, insolvency, reorganization, fraudulent transfer,
fraudulent conveyance, moratorium or other laws affecting
creditors’ rights generally and general principles of equity
and the holders of the Subordinated Debentures will be entitled to
the benefits of the Indenture, (iii) the Declaration has been
duly authorized by CFC at the Closing Date will have been validly
executed and delivered by the Regular Trustees named therein and
CFC, and the Declaration, when so executed (assuming the due
authorization, execution and delivery of such instrument by each
other party thereto), will constitute the legally binding
obligation of CFC, enforceable in accordance with its terms subject
to bankruptcy, insolvency, reorganization, fraudulent transfer,
fraudulent conveyance, moratorium or other laws affecting
creditors’ rights generally and general principles of equity;
and the Declaration has been duly qualified under the 1939 Act, and
(iv) the Indenture, the Declaration, the Trust Preferred
Securities, the Subordinated Debentures, the Trust Preferred
Securities Guarantee conform, in each case in all material
respects, to the descriptions thereof contained in the Prospectus
and the General Disclosure Package.
(vii) The Trust
Preferred Securities have been duly and validly authorized by the
Declaration and, when validly executed and delivered by the Trust,
authenticated in accordance with the provisions of the Declaration
and delivered to you against payment
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therefor in
accordance with the terms hereof, will be validly issued and will
be fully paid and non-assessable undivided beneficial interests in
the assets of the Trust and will be entitled to the benefits of the
Declaration; the issuance of the Trust Preferred Securities is not
subject to preemptive or other similar rights; holders of Trust
Preferred Securities will be entitled to the same limitation of
personal liability extended to stockholders of private corporations
for profit under the General Corporation Law of the State of
Delaware; and on or prior to the Closing Date the Trust Preferred
Securities will have been registered under the 1934 Act and
authorized for listing on the New York Stock Exchange, subject to
notice of official issuance. The Common Securities have been duly
authorized for issuance by the Trust and, when issued and delivered
against payment therefor will be validly issued, fully paid and
non-assessable, undivided beneficial interests in the assets of the
Trust. At the Closing Date, all of the issued and outstanding
Common Securities of the Trust will be directly owned by CFC, free
and clear of any security interest, mortgage, pledge, lien,
encumbrance, claim or equity.
(viii) The Trust
has been duly created and is validly existing and 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 described
in the Registration Statement, Prospectus, and the General
Disclosure Package, and to enter into and perform its obligations
under this Agreement, the Trust Preferred Securities and the
Declaration and is not required to be authorized to do business in
any other jurisdiction; the Trust is not a party to or otherwise
bound by any agreement other than those described in the
Registration Statement, the Prospectus, and the General Disclosure
Package; the Trust will be classified as a grantor trust and not as
an association taxable as a corporation for U.S. federal income tax
purposes; and the Trust is and will be treated as a consolidated
subsidiary of CFC pursuant to generally accepted accounting
principles.
(ix) The Regular
Trustees of the Trust are officers of CFC and have been duly
authorized by CFC to execute and deliver the
Declaration.
(x) CFC and any
Significant Subsidiary of CFC, as defined in Rule 405 of
Regulation C under the 1933 Act (individually, a
“Subsidiary” and collectively, the
“Subsidiaries”), has been duly formed, is validly
existing and in good standing under the laws of the jurisdiction in
which it is chartered or organized, is duly qualified to do
business and is in good standing as a foreign corporation in each
jurisdiction in which its ownership of property or the conduct of
its business requires such qualification (except where the failure
to be so qualified would not result in a Material Adverse Effect),
and has power and authority necessary to own or hold its property
and to conduct the business in which it is engaged.
(xi) All of the
outstanding shares of capital stock of each Subsidiary have been
duly authorized and validly issued and are fully paid and
nonassessable, and all outstanding shares of capital stock of the
Subsidiaries are owned by CFC, directly or through subsidiaries,
free and clear of any perfected security interest, other security
interests, claims, liens or encumbrances, except in those cases
where, singly or in the aggregate, such exception(s) would not have
a Material Adverse Effect. None of the
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outstanding
shares of capital stock of any Subsidiary was issued in violation
of the preemptive or similar rights of any securityholder of such
Subsidiary.
(xii) Except as
disclosed in the Registration Statement, the Prospectus, and the
General Disclosure Package, there is no action, suit, proceeding,
inquiry or known investigation before or brought by any court or
governmental agency or body, domestic or foreign, now pending, or,
to the knowledge of CFC, threatened, against or affecting CFC or
any of its subsidiaries, which, singly or in the aggregate, would
reasonably be expected to result in a Material Adverse Effect, or
which would reasonably be expected to materially and adversely
affect the properties or assets thereof or the consummation of the
transactions contemplated in this Agreement or the performance by
CFC of its obligations hereunder or which is required to be
disclosed in Registration Statement.
(xiii) All of the
descriptions of contracts or other documents contained or
incorporated by reference in the Registration Statement, the
Prospectus and the General Disclosure Package are accurate and
complete descriptions in all material respects of such contracts or
other documents.
(xiv) No labor
dispute with the employees of CFC or any of their respective
subsidiaries exists or, to the knowledge of CFC, is imminent which
would reasonably be expected to have a Material Adverse
Effect.
(xv) CFC and its
subsidiaries own or possess the intellectual property necessary to
carry on the business now operated by them, and CFC has not nor, to
the best of its knowledge, any of its subsidiaries has received any
notice or is otherwise aware of any infringement of or conflict
with asserted rights of others with respect to any such
intellectual property or of any facts or circumstances which would
render any such intellectual property invalid or inadequate to
protect the interest of CFC or any of its subsidiaries therein, and
which infringement or conflict (if the subject of any unfavorable
decision, ruling or finding) or invalidity or inadequacy, singly or
in the aggregate, would result in a Material Adverse
Effect.
(xvi) The
financial statements included or incorporated, or deemed to be
incorporated by reference in the Registration Statement, the
Prospectus and the General Disclosure Package, together with the
related schedules and notes, present fairly, or (in the case of any
amendment or supplement to any such document, or any material
incorporated by reference in any such document, filed with the
Commission after the date as of which this representation is being
made) will present fairly, at all times prior to the termination of
the offering of the Trust Preferred Securities, the financial
condition and results of operations of CFC, at the dates and for
the periods indicated, and have been, and (in the case of any
amendment or supplement to any such document, or any material
incorporated by reference in any such document, filed with the
Commission after the date as of which this representation is being
made) will be at all times prior to the termination of the offering
of the Trust Preferred Securities, prepared in conformity with
United States generally accepted accounting principles applied on a
consistent basis throughout the periods involved, except as stated
therein; and the summarized financial information of CFC included
or incorporated by reference in the Registration Statement,
the
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Prospectus and
the General Disclosure Package presents fairly the information
shown therein. and have been compiled on a basis consistent in all
material respects with that of the audited financial statements
included or incorporated by reference or deemed to be incorporated
by reference in the Registration Statement, the Prospectus and the
General Disclosure Package and have been compiled on a basis
consistent in all material respects with that of the audited
financial statements included or incorporated by reference or
deemed to be incorporated by reference in the Registration
Statement, the Prospectus and the General Disclosure Package. All
disclosures contained in the Registration Statement, the Prospectus
and the General Disclosure Package regarding “non-GAAP
financial measures” (as such term is defined by the 1933 Act
Regulations) comply with Regulation G under the 1934 Act and
Item 10 of Regulation S-K of the 1933 Act Regulations, to
the extent applicable.
(xvii) The term
“General Disclosure Package” shall mean (A) any
preliminary prospectus relating to the Trust Preferred Securities
or the offering thereof delivered or made available to the
Underwriters by CFC prior to execution of this Agreement,
(B) the issuer free writing prospectuses (as defined in
Rule 433 of the 1933 Act Regulations) (each, an “Issuer
Free Writing Prospectus”), including the Final Term Sheet and
(C) any other free writing prospectus that CFC and the
Underwriters agree to treat as part of the General Disclosure
Package. As of 1:15 P.M., Eastern Standard Time, on
November 1, 2006 (the “Applicable Time”), the
General Disclosure Package did not contain any untrue statement of
a material fact or omit to state any material fact necessary in
order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. The
preceding sentence does not apply to statements in or omissions
from the General Disclosure Package made in reliance upon and in
conformity with information furnished to CFC in writing by the
Underwriters expressly for use therein.
(xviii)
(A) At the earliest time after the filing of the Registration
Statement that CFC or another offering participant made a bona
fide offer (within the meaning of Rule 164(h)(2) of the 1933
Act Regulations) of the Trust Preferred Securities and (B) as
of the date of the execution and delivery of this Agreement (with
such date being used as the determination date for purposes of this
clause (B)), CFC was not or is not an ineligible issuer (as defined
in Rule 405 of the 1933 Act Regulations) (an “Ineligible
Issuer”), without taking account of any determination by the
Commission pursuant to Rule 405 of the 1933 Act Regulations
that it is not necessary that CFC be considered an Ineligible
Issuer.
(xix) No Issuer
Free Writing Prospectus, from and including its issue date through
the completion of the offering of the Trust Preferred Securities
or
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