EXHIBIT 10.2
CITIZENS BANKING CORPORATION
25,000 CAPITAL SECURITIES
FLOATING RATE CAPITAL SECURITIES
(LIQUIDATION AMOUNT $1,000.00 PER CAPITAL SECURITY)
PLACEMENT AGREEMENT
--------------------
June 16, 2003
FTN Financial Capital Markets
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, Inc.
▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
Citizens Banking Corporation, a Michigan corporation (the "Company"),
and its financing subsidiary, Citizens Michigan Statutory Trust I, a Connecticut
statutory trust (the "Trust," and hereinafter together with the Company, the
"Offerors"), hereby confirm their agreement (this "Agreement") with you as
placement agents (the "Placement Agents"), as follows:
SECTION 1. ISSUANCE AND SALE OF SECURITIES.
1.1. INTRODUCTION. The Offerors propose to issue and sell at the
Closing (as defined in Section 2.3.1 hereof) 25,000 of the Trust's Floating Rate
Capital Securities, with a liquidation amount of $1,000.00 per capital security
(the "Capital Securities"), to First Tennessee Bank National Association, a
national banking association organized under the laws of the United States of
America and Preferred Term Securities X, Ltd., a company with limited liability
established under the laws of the Cayman Islands (the "Purchasers") pursuant to
the terms of Subscription Agreements 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 Purchasers (the "Subscription Agreements"), the forms of which
are attached hereto as Exhibit A-1 and Exhibit A-2 and incorporated herein by
this reference.
1.2. OPERATIVE AGREEMENTS. The Capital Securities shall be fully and
unconditionally guaranteed on a subordinated basis by the Company with respect
to distributions and amounts payable upon liquidation, redemption or repayment
(the "Guarantee") pursuant and subject to the Guarantee Agreement (the
"Guarantee Agreement"), to be dated as of the Closing Date and executed and
delivered by the Company and U.S. Bank National Association ("U.S. Bank"), as
trustee (the "Guarantee Trustee"), for the benefit from time to time of the
holders of the Capital Securities. The entire proceeds from the sale by
the Trust to the holders of the Capital Securities shall be combined with the
entire proceeds from the sale by the Trust to the Company of its common
securities (the "Common Securities"), and shall be used by the Trust to purchase
$25,774,000.00 in principal amount of the Floating Rate Junior Subordinated
Deferrable Interest Debentures (the "Debentures") of the Company. The Capital
Securities and the Common Securities for the Trust shall be issued pursuant to
an Amended and Restated Declaration of Trust among U.S. Bank, as institutional
trustee (the "Institutional Trustee"), the Administrators named therein, and the
Company, to be dated as of the Closing Date and in substantially the form
heretofore delivered to the Placement Agents (the "Trust Agreement"). The
Debentures shall be issued pursuant to an Indenture (the "Indenture"), to be
dated as of the Closing Date, between the Company and U.S. Bank, as indenture
trustee (the "Indenture Trustee"). The documents identified in this Section 1.2
and in Section 1.1 are referred to herein as the "Operative Documents."
1.3. RIGHTS OF PURCHASERS. The Capital Securities shall be offered and
sold by the Trust directly to the Purchasers without registration of any of the
Capital Securities, the Debentures or the Guarantee under the Securities Act of
1933, as amended (the "Securities Act"), or any other applicable securities laws
in reliance upon exemptions from the registration requirements of the Securities
Act and other applicable securities laws. The Offerors agree that this Agreement
shall be incorporated by reference into the Subscription Agreements and the
Purchasers shall be entitled to each of the benefits of the Placement Agents and
the Purchasers under this Agreement and shall be entitled to enforce obligations
of the Offerors under this Agreement as fully as if the Purchasers were a party
to this Agreement. The Offerors and the Placement Agents have entered into this
Agreement to set forth their understanding as to their relationship and their
respective rights, duties and obligations.
1.4. LEGENDS. Upon original issuance thereof, and until such time as
the same is no longer required under the applicable requirements of the
Securities Act, the Capital Securities and Debentures certificates shall each
contain a legend as required pursuant to any of the Operative Documents.
SECTION 2. PURCHASE OF CAPITAL SECURITIES.
2.1. EXCLUSIVE RIGHTS; PURCHASE PRICE. From the date hereof until the
Closing Date (which date may be extended by mutual agreement of the Offerors and
the Placement Agents), the Offerors hereby grant to the Placement Agents the
exclusive right to arrange for the sale of the Capital Securities to the
Purchasers at a purchase price of $1,000.00 per Capital Security.
2.2. SUBSCRIPTION AGREEMENTS. The Offerors hereby agree to evidence
their acceptance of the subscription by countersigning a copy of the
Subscription Agreements and returning the same to the Placement Agents.
2.3. CLOSING AND DELIVERY OF PAYMENT.
2.3.1. CLOSING; CLOSING DATE. The sale and purchase of the
Capital Securities by the Offerors to the Purchasers shall take place at a
closing (the "Closing") at the offices of ▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇▇▇, ▇.▇., at 10:00
a.m. (St. Louis time) on June 26, 2003, or such other business day as may be
agreed upon by the Offerors and the Placement Agents (the "Closing Date");
provided, however, that in no event shall the Closing Date occur later than June
30, 2003 unless consented to by the Purchasers. Payment by the Purchasers shall
be payable in the manner set forth in the Subscription Agreements and shall be
made prior to or on the Closing Date.
2.3.2. DELIVERY. The certificates for the Capital Securities
shall be in definitive form, each registered in the name of the applicable
Purchaser and in the aggregate amount of the Capital Securities purchased by the
Purchaser.
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2.3.3. TRANSFER AGENT. The Offerors shall deposit the
certificates representing the Capital Securities with the Institutional Trustee
or other appropriate party prior to the Closing Date.
2.4. PLACEMENT AGENTS' FEES AND EXPENSES.
2.4.1. PLACEMENT AGENTS' COMPENSATION. Because the proceeds
from the sale of the Capital Securities shall be used to purchase the Debentures
from the Company, the Company shall pay an aggregate of $20.00 for each
$1,000.00 of principal amount of Debentures sold to the Trust (excluding the
Debentures related to the Common Securities purchased by the Company). Of this
amount, $10.00 for each $1,000.00 of principal amount of Debentures shall be
payable to FTN Financial Capital Markets and $10.00 for each $1,000.00 of
principal amount of Debentures shall be payable to ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, Inc.
Such amount shall be delivered to the Trustee or such other person designated by
the Placement Agents on the Closing Date and shall be allocated between and paid
to the respective Placement Agents as directed by the Placement Agents.
2.4.2. COSTS AND EXPENSES. Whether or not this Agreement is
terminated or the sale of the Capital Securities is consummated, the Company
hereby covenants and agrees that it shall pay or cause to be paid (directly or
by reimbursement) all reasonable costs and expenses incident to the performance
of the obligations of the Offerors under this Agreement, including all fees,
expenses and disbursements of counsel and accountants for the Offerors; all
reasonable expenses incurred by the Offerors incident to the preparation,
execution and delivery of the Trust Agreement, the Indenture, and the Guarantee;
and all other reasonable costs and expenses incident to the performance of the
obligations of the Company hereunder and under the Trust Agreement.
2.5. FAILURE TO CLOSE. If any of the conditions to the Closing
specified in this Agreement shall not have been fulfilled to the satisfaction of
the Placement Agents or if the Closing shall not have occurred on or before
10:00 a.m. (St. Louis time) on June 30, 2003, 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 2.4.2, 7.5 and 9 shall not be so
relieved and shall continue in full force and effect.
SECTION 3. CLOSING CONDITIONS. The obligations of the Purchasers and the
Placement Agents on the Closing Date shall be subject to the accuracy, at and as
of the Closing Date, of the representations and warranties of the Offerors
contained in this Agreement, to the accuracy, at and as of the Closing Date, of
the statements of the Offerors made in any certificates pursuant to this
Agreement, to the performance by the Offerors of their respective obligations
under this Agreement, to compliance, at and as of the Closing Date, by the
Offerors with their respective agreements herein contained, and to the following
further conditions:
3.1. OPINIONS OF COUNSEL. On the Closing Date, the Placement Agents
shall have received the following favorable opinions, each dated as of the
Closing Date: (a) from ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ PLLC, counsel for the Offerors and
addressed to the Purchasers and the Placement Agents in substantially the form
set forth on Exhibit B-1 attached hereto and incorporated herein by this
reference, (b) from ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP, special Connecticut counsel to the
Offerors and addressed to the Purchasers, the Placement Agents and the Offerors,
in substantially the form set forth on Exhibit B-2 attached hereto and
incorporated herein by this reference and (c) from ▇▇▇▇▇, Rice & ▇▇▇▇▇▇▇▇, ▇.▇.,
special tax counsel to the Offerors, and addressed to the Placement Agents and
the Offerors, in substantially the form set forth on Exhibit B-3 attached hereto
and incorporated herein by this reference, subject to the receipt by ▇▇▇▇▇, Rice
& ▇▇▇▇▇▇▇▇, ▇.▇. of a representation letter from the Company in the form set
forth in Exhibit B-3 completed in a manner reasonably satisfactory to ▇▇▇▇▇,
Rice & ▇▇▇▇▇▇▇▇, ▇.▇. (collectively, the "Offerors' Counsel Opinions"). In
rendering the Offerors' Counsel Opinions, counsel to the Offerors
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may rely as to factual matters upon certificates or other documents furnished by
officers, directors and trustees of the Offerors (copies of which shall be
delivered to the Placement Agents and the Purchasers) and by government
officials, and upon such other documents as counsel to the Offerors may, in
their reasonable opinion, deem appropriate as a basis for the Offerors' Counsel
Opinions. Counsel to the Offerors may specify the jurisdictions in which they
are admitted to practice and that they are not admitted to practice in any other
jurisdiction and are not experts in the law of any other jurisdiction. If the
Offerors' counsel is not admitted to practice in the State of New York, the
opinion of Offerors' counsel may assume, for purposes of the opinion, that the
laws of the State of New York are substantively identical, in all respects
material to the opinion, to the internal laws of the state in which such counsel
is admitted to practice. Such Offerors' Counsel Opinions shall not state that
they are to be governed or qualified by, or that they are otherwise subject to,
any treatise, written policy or other document relating to legal opinions,
including, without limitation, the Legal Opinion Accord of the ABA Section of
Business Law (1991).
3.2. OFFICER'S CERTIFICATE. At the Closing Date, the Purchasers and the
Placement Agents shall have received certificates from the Chief Executive
Officer of the Company, dated as of the Closing Date, stating that (i) the
representations and warranties of the Offerors set forth in Section 5 hereof are
true and correct as of the Closing Date and that the Offerors have complied with
all agreements and satisfied all conditions on their part to be performed or
satisfied at or prior to the Closing Date, (ii) since the date of this Agreement
the Offerors have not incurred any liability or obligation, direct or
contingent, or entered into any material transactions, other than in the
ordinary course of business, which is material to the Offerors, and (iii)
covering such other matters as the Placement Agents may reasonably request.
3.3. ADMINISTRATOR'S CERTIFICATE. At the Closing Date, the Purchasers
and the Placement Agents shall have received a certificate of one or more
Administrators of the Trust, dated as of the Closing Date, stating that the
representations and warranties of the Trust set forth in Section 5 are true and
correct as of the Closing Date and that the Trust has complied with all
agreements and satisfied all conditions on its part to be performed or satisfied
at or prior to the Closing Date.
3.4. PURCHASE PERMITTED BY APPLICABLE LAWS; LEGAL INVESTMENT. The
purchase of and payment for the Capital Securities as described in this
Agreement and pursuant to the Subscription Agreements shall (a) not be
prohibited by any applicable law or governmental regulation, (b) not subject the
Purchasers or the Placement Agents to any penalty or, in the reasonable judgment
of the Purchasers and the Placement Agents, other onerous conditions under or
pursuant to any applicable law or governmental regulation, and (c) be permitted
by the laws and regulations of the jurisdictions to which the Purchasers and the
Placement Agents are subject.
3.5. CONSENTS AND PERMITS. The Company and the Trust shall have
received all consents, permits and other authorizations, and made all such
filings and declarations, as may be required from any person or entity pursuant
to any law, statute, regulation or rule (federal, state, local and foreign), or
pursuant to any agreement, order or decree to which the Company or the Trust is
a party or to which either is subject, in connection with the transactions
contemplated by this Agreement.
3.6. SALE OF PURCHASER SECURITIES. Preferred Term Securities X, Ltd.
shall have sold securities issued by it in an amount such that the net proceeds
of such sale shall be (i) available on the Closing Date and (ii) in an amount
sufficient to purchase that portion of the Capital Securities Preferred Term
Securities X, Ltd. agrees to purchase pursuant to the Subscription Agreement to
be entered into by it and all other capital or similar securities contemplated
to be purchased by Preferred Term Securities X, Ltd. in agreements similar to
this Agreement and the Subscription Agreement to be entered into by it.
3.7. INFORMATION. Prior to or on the Closing Date, the Offerors shall
have furnished to the Placement Agents such further information, certificates,
opinions and documents addressed to the
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Purchasers and the Placement Agents, which the Placement Agents may reasonably
request, including, without limitation, a complete set of the Operative
Documents or any other documents or certificates required by this Section 3; and
all proceedings taken by the Offerors in connection with the issuance, offer and
sale of the Capital Securities as herein contemplated shall be reasonably
satisfactory in form and substance to the Placement Agents.
If any condition specified in this Section 3 shall not have been
fulfilled when and as required in this Agreement, or if any of the opinions or
certificates mentioned above or elsewhere in this Agreement shall not be
reasonably satisfactory in form and substance to the Placement Agents, this
Agreement may be terminated by the Placement Agents by notice to the Offerors at
any time at or prior to the Closing Date. Notice of such termination shall be
given to the Offerors in writing or by telephone or facsimile confirmed in
writing.
SECTION 4. CONDITIONS TO THE OFFERORS' OBLIGATIONS. The obligations of the
Offerors to sell the Capital Securities to the Purchasers and consummate the
transactions contemplated by this Agreement shall be subject to the accuracy, at
and as of the Closing Date, of the representations and warranties of the
Placement Agents contained in this Agreement and to the following further
conditions:
4.1. EXECUTED AGREEMENT. The Offerors shall have received from the
Placement Agents an executed copy of this Agreement.
4.2. FULFILLMENT OF OTHER OBLIGATIONS. The Placement Agents shall have
fulfilled all of their other obligations and duties required to be fulfilled
under this Agreement prior to or at the Closing.
SECTION 5. REPRESENTATIONS AND WARRANTIES OF THE OFFERORS. Except as set forth
on the Disclosure Schedule (as defined in Section 11.1) attached hereto, if any,
the Offerors jointly and severally represent and warrant to the Placement Agents
and the Purchasers as of the date hereof and as of the Closing Date as follows:
5.1. SECURITIES LAW MATTERS.
(A) Neither the Company nor the Trust, nor any of their
"Affiliates" (as defined in Rule 501(b) of Regulation D under the Securities Act
("Regulation D")), nor any person acting on any of their behalf has, directly or
indirectly, made offers or sales of any security, or solicited offers to buy any
security, under circumstances that would require the registration under the
Securities Act of any of the Capital Securities, the Guarantee or the Debentures
(collectively, the "Securities") or any other securities to be issued, or which
may be issued, by Preferred Term Securities X, Ltd.
(B) Neither the Company nor the Trust, nor any of their
Affiliates, nor any person acting on its or their behalf has (i) other than the
Placement Agents, offered for sale or solicited offers to purchase the
Securities, (ii) engaged in any form of offering, general solicitation or
general advertising (within the meaning of Regulation D) in connection with any
offer or sale of any of the Securities, or (iii) engaged or will engage in any
"directed selling efforts" within the meaning of Regulation S of the Securities
Act ("Regulation S") with respect to the Securities.
(C) The Securities satisfy the eligibility requirements of
Rule 144A(d)(3) under the Securities Act.
(D) Neither the Company nor the Trust is or, after giving
effect to the offering and sale of the Capital Securities and the consummation
of the transactions described in this Agreement, will be an "investment company"
or an entity "controlled" by an "investment company," in each case within the
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meaning of Section 3(a) of the Investment Company Act of 1940, as amended (the
"Investment Company Act") without regard to Section 3(c) of the Investment
Company Act.
(E) Neither the Company nor the Trust has paid or agreed to
pay to any person or entity (other than the Placement Agents) any compensation
for soliciting another to purchase any of the Securities.
5.2. ORGANIZATION, STANDING AND QUALIFICATION OF THE TRUST. The Trust
has been duly created and is validly existing in good standing as a statutory
trust under the Connecticut Statutory Trust Act (the "Statutory Trust Act") with
the power and authority to own property and to conduct the business it transacts
and proposes to transact and to enter into and perform its obligations under the
Operative Documents. The Trust is duly qualified to transact business as a
foreign entity and is in good standing in each jurisdiction in which such
qualification is necessary, except where the failure to so qualify or be in good
standing would not have a material adverse effect on the Trust. The Trust is not
a party to or otherwise bound by any agreement other than the Operative
Documents. The Trust is and will, under current law, be classified for federal
income tax purposes as a grantor trust and not as an association taxable as a
corporation.
5.3. TRUST AGREEMENT. The Trust Agreement has been duly authorized by
the Company and, on the Closing Date, will have been duly executed and delivered
by the Company and the Administrators of the Trust, and, assuming due
authorization, execution and delivery by the Institutional Trustee, will be a
valid and binding obligation of the Company and such Administrators, enforceable
against them in accordance with its terms, subject to (a) applicable bankruptcy,
insolvency, moratorium, receivership, reorganization, liquidation and other laws
relating to or affecting creditors' rights generally, and (b) general principles
of equity (regardless of whether considered and applied in a proceeding in
equity or at law) ("Bankruptcy and Equity"). Each of the Administrators of the
Trust is an employee or a director of the Company or of a financial institution
subsidiary of the Company and has been duly authorized by the Company to execute
and deliver the Trust Agreement.
5.4. GUARANTEE AGREEMENT AND THE INDENTURE. Each of the Guarantee and
the Indenture has been duly authorized by the Company and, on the Closing Date,
will have been duly executed and delivered by the Company, and, assuming due
authorization, execution and delivery by the Guarantee Trustee, in the case of
the Guarantee, and by the Indenture Trustee, in the case of the Indenture, will
be a valid and binding obligation of the Company enforceable against it in
accordance with its terms, subject to Bankruptcy and Equity.
5.5. CAPITAL SECURITIES AND COMMON SECURITIES. The Capital Securities
and the Common Securities have been duly authorized by the Trust Agreement and,
when issued and delivered against payment therefor on the Closing Date to the
Purchasers, in the case of the Capital Securities, and to the Company, in the
case of the Common Securities, will be validly issued and represent undivided
beneficial interests in the assets of the Trust. None of the Capital Securities
or the Common Securities is subject to preemptive or other similar rights. On
the Closing Date, all of the issued and outstanding Common Securities will be
directly owned by the Company free and clear of any pledge, security interest,
claim, lien or other encumbrance.
5.6. DEBENTURES. The Debentures have been duly authorized by the
Company and, at the Closing Date, will have been duly executed and delivered to
the Indenture Trustee for authentication in accordance with the Indenture, and,
when authenticated in the manner provided for in the Indenture and delivered
against payment therefor by the Trust, will constitute valid and binding
obligations of the Company entitled to the benefits of the Indenture enforceable
against the Company in accordance with their terms, subject to Bankruptcy and
Equity.
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5.7. POWER AND AUTHORITY. This Agreement has been duly authorized,
executed and delivered by the Company and the Trust and constitutes the valid
and binding obligation of the Company and the Trust, enforceable against the
Company and the Trust in accordance with its terms, subject to Bankruptcy and
Equity except as any indemnification or contribution provisions thereof may be
limited under applicable securities laws.
5.8. NO DEFAULTS. The Trust is not in violation of the Trust Agreement
or, to the knowledge of the Administrators, any provision of the Statutory Trust
Act. The execution, delivery and performance by the Company or the Trust of this
Agreement or the Operative Documents to which it is a party, and the
consummation of the transactions contemplated herein or therein and the use of
the proceeds therefrom, will not conflict with or constitute a breach of, or a
default under, or result in the creation or imposition of any lien, charge or
other encumbrance upon any property or assets of the Trust, the Company or any
of the Company's Subsidiaries (as defined in Section 5.11 hereof) pursuant to
any contract, indenture, mortgage, loan agreement, note, lease or other
instrument to which the Trust, the Company or any of its Subsidiaries is a party
or by which it or any of them may be bound, or to which any of the property or
assets of any of them is subject, except for a conflict, breach, default, lien,
charge or encumbrance which could not, singly or in the aggregate, reasonably be
expected to have a Material Adverse Effect nor will such action result in any
violation of the Trust Agreement or the Statutory Trust Act or require the
consent, approval, authorization or order of any court or governmental agency or
body. As used herein, the term "Material Adverse Effect" means any one or more
effects that individually or in the aggregate are material and adverse to the
Offeror's ability to consummate the transactions contemplated herein or in the
Operative Documents or any one or more effects that individually or in the
aggregate are material and adverse to the condition (financial or otherwise),
earnings, affairs, business, prospects or results of operations of the Company
and its Subsidiaries taken as whole, whether or not occurring in the ordinary
course of business.
5.9. ORGANIZATION, STANDING AND QUALIFICATION OF THE COMPANY. The
Company has been duly incorporated and is validly existing as a corporation in
good standing under the laws of Michigan, with all requisite corporate power and
authority to own its properties and conduct the business it transacts and
proposes to transact, and is duly qualified to transact business and is in good
standing as a foreign corporation in each jurisdiction where the nature of its
activities requires such qualification, except where the failure of the Company
to be so qualified would not, singly or in the aggregate, have a Material
Adverse Effect.
5.10. SUBSIDIARIES OF THE COMPANY. Each of the Company's significant
subsidiaries (as defined in Section 1-02(w) of Regulation S-X to the Securities
Act (the "Significant Subsidiaries")) is listed in Exhibit C attached hereto and
incorporated herein by this reference. Each Significant Subsidiary has been duly
organized and is validly existing and in good standing under the laws of the
jurisdiction in which it is chartered or organized, with all requisite power and
authority to own its properties and conduct the business it transacts and
proposes to transact, and is duly qualified to transact business and is in good
standing as a foreign entity in each jurisdiction where the nature of its
activities requires such qualification, except where the failure of any such
Significant Subsidiary to be so qualified would not, singly or in the aggregate,
have a Material Adverse Effect. All of the issued and outstanding shares of
capital stock of the Significant Subsidiaries (a) have been duly authorized and
are validly issued, (b) are fully paid and nonassessable, and (c) are wholly
owned, directly or indirectly, by the Company free and clear of any security
interest, mortgage, pledge, lien, encumbrance, restriction upon voting or
transfer (other than restrictions imposed by applicable law or regulation on
banks and bank holding companies generally), preemptive rights, claim, equity or
other defect.
5.11. PERMITS. The Company and each of its subsidiaries (as defined in
Section 1-02(x) of Regulation S-X to the Securities Act) (the "Subsidiaries")
have all requisite power and authority, and all
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necessary authorizations, approvals, orders, licenses, certificates and permits
of and from regulatory or governmental officials, bodies and tribunals, to own
or lease their respective properties and to conduct their respective businesses
as now being conducted, except such authorizations, approvals, orders, licenses,
certificates and permits which, if not obtained and maintained, would not,
singly or in the aggregate, have a Material Adverse Effect, and neither the
Company nor any of its Subsidiaries has received any notice of proceedings
relating to the revocation or modification of any such authorizations,
approvals, orders, licenses, certificates or permits which, if such revocation
or modification occurred, would, singly or in the aggregate, have a Material
Adverse Effect; and the Company and its Subsidiaries are in compliance with all
applicable laws, rules, regulations and orders and consents, the violation of
which would, singly or in the aggregate, have a Material Adverse Effect.
5.12. CONFLICTS, AUTHORIZATIONS AND APPROVALS. Neither the Company nor
any of its Subsidiaries is in violation of its respective articles or
certificate of incorporation, charter or by-laws or similar organizational
documents or in default in the performance or observance of any obligation,
agreement, covenant or condition contained in any contract, indenture, mortgage,
loan agreement, note, lease or other agreement or instrument to which either the
Company or any of its Subsidiaries is a party, or by which it or any of them may
be bound or to which any of the property or assets of the Company or any of its
Subsidiaries is subject, the effect of which violation or default in performance
or observance would have, singly or in the aggregate, a Material Adverse Effect.
5.13. HOLDING COMPANY REGISTRATION AND DEPOSIT INSURANCE. The Company
is duly registered (i) as a bank holding company or financial holding company
under the Bank Holding Company Act of 1956, as amended, and the regulations of
the Board of Governors of the Federal Reserve System or (ii) as a savings and
loan holding company under the Home Owners' Loan Act of 1933, as amended, and
the regulations of the Office of Thrift Supervision, and the deposit accounts of
the Company's Subsidiary depository institutions are insured by the Federal
Deposit Insurance Corporation ("FDIC") to the fullest extent permitted by law
and the rules and regulations of the FDIC, and no proceedings for the
termination of such insurance are pending or threatened.
5.14. FINANCIAL STATEMENTS.
(A) The consolidated balance sheets of the Company and all of
its consolidated subsidiaries as of December 31, 2002 and December 31, 2001 and
related consolidated income statements and statements of changes in
shareholders' equity for the 3 years ended December 31, 2002 together with the
notes thereto, and the consolidated balance sheets of the Company and all of its
Subsidiaries as of March 31, 2003 and the related consolidated income statements
and statements of changes in shareholders' equity for the 3 months then ended,
copies of each of which have been provided to the Placement Agents (together,
the "Financial Statements"), have been prepared in accordance with generally
accepted accounting principles applied on a consistent basis (except as may be
disclosed therein) and fairly present in all material respects the financial
position and the results of operations and changes in shareholders' equity of
the Company and all of its Subsidiaries as of the dates and for the periods
indicated (subject, in the case of the interim financial statements, to normal
recurring year-end adjustments, none of which shall be material). The books and
records of the Company and all of its Subsidiaries have been, and are being,
maintained in all material respects in accordance with generally accepted
accounting principles and any other applicable legal and accounting requirements
and reflect only actual transactions.
(B) The information in the Company's report on form FR Y-9C
dated December 31, 2002 (the "FR Y-9C") previously provided to the Placement
Agents fairly presents in all material respects the financial position of the
Company and all of its Subsidiaries as of such date.
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(C) Since the respective dates of the Financial Statements and
the FR Y-9C, except as disclosed in the Financial Statements, there has been no
material adverse change or development with respect to the financial condition
or earnings of the Company and all of its Subsidiaries, taken as a whole.
(D) The accountants of the Company who certified the Financial
Statements are independent public accountants of the Company and its
Subsidiaries within the meaning of the Securities Act and the rules and
regulations thereunder.
5.15. EXCHANGE ACT REPORTING. The reports containing the Financial
Statements filed with the Securities and Exchange Commission (the "Commission")
by the Company under the Securities Exchange Act of 1934, as amended (the "1934
Act") and the regulations thereunder at the time they were filed with the
Commission complied as to form in all material respects with the requirements of
the 1934 Act and such reports did not contain an untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
to make the statements therein, in light of the circumstances in which they were
made, not misleading.
5.16. REGULATORY ENFORCEMENT MATTERS. Neither the Company nor any of
its Subsidiaries is subject or is party to, or has received any notice or advice
that any of them may become subject or party to, any investigation with respect
to, any cease-and-desist order, agreement, consent agreement, memorandum of
understanding or other regulatory enforcement action, proceeding or order with
or by, or is a party to any commitment letter or similar undertaking to, or is
subject to any directive by, or has been since January 1, 2000, a recipient of
any supervisory letter from, or since January 1, 2000, has adopted any board
resolutions at the request of, any Regulatory Agency (as defined below) that
currently restricts in any material respect the conduct of their business or
that in any material manner relates to their capital adequacy, their credit
policies, their ability or authority to pay dividends or make distributions to
their shareholders or make payments of principal or interest on their debt
obligations, their management or their business (each, a "Regulatory
Agreement"), nor has the Company or any of its Subsidiaries been advised since
January 1, 2000, by any Regulatory Agency that it is considering issuing or
requesting any such Regulatory Agreement. There is no material unresolved
violation, criticism or exception by any Regulatory Agency with respect to any
report or statement relating to any examinations of the Company or any of its
Subsidiaries. As used herein, the term "Regulatory Agency" means any federal or
state agency charged with the supervision or regulation of depository
institutions, bank, financial or savings and loan holding companies, or engaged
in the insurance of depository institution deposits, or any court,
administrative agency or commission or other governmental agency, authority or
instrumentality having supervisory or regulatory authority with respect to the
Company or any of its Subsidiaries.
5.17. NO MATERIAL CHANGE. Since December 31, 2002, except as disclosed
in the Financial Statements, there has been no material adverse change or
development with respect to the condition (financial or otherwise), earnings,
affairs, business, prospects or results of operations of the Company or its
Subsidiaries on a consolidated basis, whether or not arising in the ordinary
course of business.
5.18. NO UNDISCLOSED LIABILITIES. Neither the Company nor any of its
Subsidiaries has any material liability, whether known or unknown, whether
asserted or unasserted, whether absolute or contingent, whether accrued or
unaccrued, whether liquidated or unliquidated, and whether due or to become due,
including any liability for taxes (and there is no past or present fact,
situation, circumstance, condition or other basis for any present or future
action, suit, proceeding, hearing, charge, complaint, claim or demand against
the Company or its Subsidiaries giving rise to any such liability), except (i)
for liabilities set forth in the Financial Statements and (ii) normal
fluctuation in the amount of the liabilities referred to in clause (i) above
occurring in the ordinary course of business of the Company and all of its
Subsidiaries since the date of the most recent balance sheet included in the
Financial Statements.
9
5.19. LITIGATION. No charge, investigation, action, suit or proceeding
is pending or, to the knowledge of the Offerors, threatened, against or
affecting the Company or its Subsidiaries or any of their respective properties
before or by any courts or any regulatory, administrative or governmental
official, commission, board, agency or other authority or body, or any
arbitrator, wherein an unfavorable decision, ruling or finding could have,
singly or in the aggregate, a Material Adverse Effect.
5.20. DEFERRAL OF INTEREST PAYMENTS ON DEBENTURES. The Company has no
present intention to exercise its option to defer payments of interest on the
Debentures as provided in the Indenture. The Company believes that the
likelihood that it would exercise its right to defer payments of interest on the
Debentures as provided in the Indenture at any time during which the Debentures
are outstanding is remote because of the restrictions that would be imposed on
the Company's ability to declare or pay dividends or distributions on, or to
redeem, purchase, acquire or make a liquidation payment with respect to, any of
the Company's capital stock and on the Company's ability to make any payments of
principal, interest or premium on, or repay, repurchase or redeem, any of its
debt securities that rank pari passu in all respects with, or junior in interest
to, the Debentures.
SECTION 6. REPRESENTATIONS AND WARRANTIES OF THE PLACEMENT AGENTS. Each
Placement Agent represents and warrants to the Offerors as to itself (but not as
to the other Placement Agent) as follows:
6.1. ORGANIZATION, STANDING AND QUALIFICATION.
(A) FTN Financial Capital Markets is a division of First
Tennessee Bank National Association, a national banking association duly
organized, validly existing and in good standing under the laws of the United
States, with full power and authority to own, lease and operate its properties
and conduct its business as currently being conducted. FTN Financial Capital
Markets is duly qualified to transact business as a foreign corporation and is
in good standing in each other jurisdiction in which it owns or leases property
or conducts its business so as to require such qualification and in which the
failure to so qualify would, individually or in the aggregate, have a material
adverse effect on the condition (financial or otherwise), earnings, business,
prospects or results of operations of FTN Financial Capital Markets.
(B) ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, Inc. is a corporation duly
organized, validly existing and in good standing under the laws of the State of
New York, with full power and authority to own, lease and operate its properties
and conduct its business as currently being conducted. ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇,
Inc. is duly qualified to transact business as a foreign corporation and is in
good standing in each other jurisdiction in which it owns or leases property or
conducts its business so as to require such qualification and in which the
failure to so qualify would, individually or in the aggregate, have a material
adverse effect on the condition (financial or otherwise), earnings, business,
prospects or results of operations of ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, Inc.
6.2. POWER AND AUTHORITY. The Placement Agent has all requisite power
and authority to enter into this Agreement, and this Agreement has been duly and
validly authorized, executed and delivered by the Placement Agent and
constitutes the legal, valid and binding agreement of the Placement Agent,
enforceable against the Placement Agent in accordance with its terms, subject to
Bankruptcy and Equity and except as any indemnification or contribution
provisions thereof may be limited under applicable securities laws.
6.3. GENERAL SOLICITATION. In the case of the offer and sale of the
Capital Securities, no form of general solicitation or general advertising was
used by the Placement Agent or its representatives including, but not limited
to, advertisements, articles, notices or other communications published in any
newspaper, magazine or similar medium or broadcast over television or radio or
any seminar or meeting whose attendees have been invited by any general
solicitation or general advertising.
10
6.4. PURCHASERS. The Placement Agent has made such reasonable inquiry
as is necessary to determine that the Purchasers are acquiring the Capital
Securities for their own accounts, except as contemplated under the Call Option
(as defined in Section 7.8 herein), and that the Purchasers do not intend to
distribute the Capital Securities in contravention of the Securities Act or any
other applicable securities laws.
6.5. QUALIFIED PURCHASERS. The Placement Agent has not offered or sold
and will not arrange for the offer or sale of the Capital Securities except (i)
to those the Placement Agent reasonably believes are "accredited investors" (as
defined in Rule 501 of Regulation D), (ii) in an offshore transaction complying
with Rule 903 of Regulation S, or (iii) in any other manner that does not
require registration of the Capital Securities under the Securities Act. In
connection with each such sale, the Placement Agent has taken or will take
reasonable steps to ensure that the Purchasers are aware that (a) such sale is
being made in reliance on an exemption under the Securities Act and (b) future
transfers of the Capital Securities will not be made except in compliance with
applicable securities laws.
6.6. OFFERING CIRCULARS. Neither the Placement Agent nor its
representatives will include any non-public information about the Company, the
Trust or any of their affiliates in any registration statement, prospectus,
offering circular or private placement memorandum used in connection with any
purchase of Capital Securities without the prior written consent of the Trust
and the Company.
SECTION 7. COVENANTS OF THE OFFERORS. The Offerors covenant and agree with the
Placement Agents and the Purchasers as follows:
7.1. COMPLIANCE WITH REPRESENTATIONS AND WARRANTIES. During the period
from the date of this Agreement to the Closing Date, the Offerors shall use
their best efforts and take all action necessary or appropriate to cause their
representations and warranties contained in Section 5 hereof to be true as of
the Closing Date, after giving effect to the transactions contemplated by this
Agreement, as if made on and as of the Closing Date.
7.2. SALE AND REGISTRATION OF SECURITIES. The Offerors and their
Affiliates shall not nor shall any of them permit any person acting on their
behalf (other than the Placement Agents), to directly or indirectly (i) sell,
offer for sale or solicit offers to buy or otherwise negotiate in respect of any
security (as defined in the Securities Act) that would or could be integrated
with the sale of the Capital Securities in a manner that would require the
registration under the Securities Act of the Securities or (ii) make offers or
sales of any such Security, or solicit offers to buy any such Security, under
circumstances that would require the registration of any of such Securities
under the Securities Act.
7.3. USE OF PROCEEDS. The Trust shall use the proceeds from the sale of
the Capital Securities to purchase the Debentures from the Company.
7.4. INVESTMENT COMPANY. The Offerors shall not engage, or permit any
Subsidiary to engage, in any activity which would cause it or any Subsidiary to
be required to register as an "investment company" under the provisions of the
Investment Company Act.
7.5. REIMBURSEMENT OF EXPENSES. If the sale of the Capital Securities
provided for herein is not consummated (i) because any condition set forth in
Section 3 hereof is not satisfied, or (ii) because of any refusal, inability or
failure on the part of the Company or the Trust to perform any agreement herein
or comply with any provision hereof other than by reason of a breach by the
Placement Agents, the Company shall reimburse the Placement Agents upon demand
for all of their pro rata share of out-of-pocket expenses (including reasonable
fees and disbursements of counsel) in an amount not to exceed $50,000.00 that
shall have been incurred by them in connection with the proposed purchase and
sale of the Capital Securities. Notwithstanding the foregoing, the Company shall
have no obligation to
11
reimburse the Placement Agents for their out-of-pocket expenses if the sale of
the Capital Securities fails to occur because the Placement Agents fail to
fulfill a condition set forth in Section 4.
7.6. SOLICITATION AND ADVERTISING. In connection with any offer or sale
of any of the Securities, the Offerors shall not, nor shall either of them
permit any of their Affiliates or any person acting on their behalf, other than
the Placement Agents, to (i) engage in any "directed selling efforts" within the
meaning of Regulation S, or (ii) engage in any form of general solicitation or
general advertising (as defined in Regulation D).
7.7. COMPLIANCE WITH RULE 144A(D)(4) UNDER THE SECURITIES ACT. So long
as any of the Securities are outstanding and are "restricted securities" within
the meaning of Rule 144(a)(3) under the Securities Act, the Offerors will,
during any period in which they are not subject to and in compliance with
Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), or the Offerors are not exempt from such reporting requirements
pursuant to and in compliance with Rule 12g3-2(b) under the Exchange Act,
provide to each holder of such restricted securities and to each prospective
purchaser (as designated by such holder) of such restricted securities, upon the
request of such holder or prospective purchaser in connection with any proposed
transfer, any information required to be provided by Rule 144A(d)(4) under the
Securities Act, if applicable. This covenant is intended to be for the benefit
of the holders, and the prospective purchasers designated by such holders, from
time to time of such restricted securities. The information provided by the
Offerors pursuant to this Section 7.7 will not, at the date thereof, contain any
untrue statement of a material fact or omit to state any material fact necessary
to make the statements therein, in light of the circumstances under which they
were made, not misleading.
7.8. OPTION TO PURCHASE. The Offerors acknowledge that the Placement
Agents have an irrevocable option to purchase or arrange for the purchase of
certain of the Capital Securities from First Tennessee Bank National
Association, in whole or in part, at any time and from time to time following
the Closing Date pursuant to this Agreement and the applicable Subscription
Agreement (the "Call Option"), exercisable by delivering the notice attached as
Exhibit B to the Subscription Agreement to be entered into by First Tennessee
Bank National Association (the "Option Exercise Notice"). In order to facilitate
the Placement Agents' exercise of the Call Option, the Company shall execute in
blank five additional Capital Securities certificates, to be delivered at
Closing, such certificates to be completed with the name of the transferee(s) to
which the Capital Securities purchased by First Tennessee Bank National
Association, in whole or in part, will be transferred upon an exercise of a Call
Option and authenticated by the Institutional Trustee at the time of each such
transfer.
7.9. QUARTERLY REPORTS. Within 50 days of the end of each calendar year
quarter and within 100 days of the end of each calendar year during which the
Debentures are issued and outstanding, the Offerors shall submit to The Bank of
New York a completed quarterly report in the form attached hereto as Exhibit D,
with a copy provided to First Tennessee Bank National Association during the
period when it holds any of the Capital Securities. If the Placement Agents
exercise their option under Section 7.8, the Offerors shall submit to the
trustee designated in the Option Exercise Notice such periodic reports as are
required by this Section 7.9. The Offerors acknowledge and agree that The Bank
of New York and such designated trustee and its successors and assigns are third
party beneficiaries of this Section 7.9.
SECTION 8. COVENANTS OF THE PLACEMENT AGENTS. The Placement Agents covenant and
agree with the Offerors that, during the period from the date of this Agreement
to the Closing Date, the Placement Agents shall use their best efforts and take
all action necessary or appropriate to cause their representations and
warranties contained in Section 6 to be true as of Closing Date, after giving
effect to the transactions contemplated by this Agreement, as if made on and as
of the Closing Date. The
12
Placement Agents further covenant and agree not to engage in hedging
transactions with respect to the Capital Securities unless such transactions are
conducted in compliance with the Securities Act.
SECTION 9. INDEMNIFICATION.
9.1. INDEMNIFICATION OBLIGATION. The Offerors shall jointly and
severally indemnify and hold harmless the Placement Agents and the Purchasers
and each of their respective agents, employees, officers and directors and each
person that controls either of the Placement Agents or the Purchasers within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act,
and agents, employees, officers and directors or any such controlling person of
either of the Placement Agents or the Purchasers (each such person or entity, an
"Indemnified Party") from and against any and all losses, claims, damages,
judgments, liabilities or expenses, joint or several, to which such Indemnified
Party may become subject under the Securities Act, the Exchange Act or other
federal or state statutory law or regulation, or at common law or otherwise
(including in settlement of any litigation, if such settlement is effected with
the written consent of the Offerors), insofar as such losses, claims, damages,
judgments, liabilities or expenses (or actions in respect thereof) arise out of,
or are based upon, or relate to, in whole or in part, (a) any untrue statement
or alleged untrue statement of a material fact contained in any information
(whether written or oral) or documents executed in favor of, furnished or made
available to the Placement Agents or the Purchasers by the Offerors, or (b) any
omission or alleged omission to state in any information (whether written or
oral) or documents executed in favor of, furnished or made available to the
Placement Agents or the Purchasers by the Offerors a material fact required to
be stated therein or necessary to make the statements therein not misleading,
and shall reimburse each Indemnified Party for any legal and other expenses as
such expenses are reasonably incurred by such Indemnified Party in connection
with investigating, defending, settling, compromising or paying any such loss,
claim, damage, judgments, liability, expense or action described in this Section
9.1. In addition to their other obligations under this Section 9, the Offerors
hereby agree that, as an interim measure during the pendency of any claim,
action, investigation, inquiry or other proceeding arising out of, or based
upon, or related to the matters described above in this Section 9.1, they shall
reimburse each Indemnified Party on a quarterly basis for all reasonable legal
or other expenses incurred in connection with investigating or defending any
such claim, action, investigation, inquiry or other proceeding, notwithstanding
the absence of a judicial determination as to the propriety and enforceability
of the possibility that such payments might later be held to have been improper
by a court of competent jurisdiction. To the extent that any such interim
reimbursement payment is so held to have been improper, each Indemnified Party
shall promptly return such amounts to the Offerors together with interest,
determined on the basis of the prime rate (or other commercial lending rate for
borrowers of the highest credit standing) announced from time to time by First
Tennessee Bank National Association (the "Prime Rate"). Any such interim
reimbursement payments which are not made to an Indemnified Party within 30 days
of a request for reimbursement shall bear interest at the Prime Rate from the
date of such request.
9.2. CONDUCT OF INDEMNIFICATION PROCEEDINGS. Promptly after receipt by
an Indemnified Party under this Section 9 of notice of the commencement of any
action, such Indemnified Party shall, if a claim in respect thereof is to be
made against the Offerors under this Section 9, notify the Offerors in writing
of the commencement thereof; but, subject to Section 9.4, the omission to so
notify the Offerors shall not relieve them from any liability pursuant to
Section 9.1 which the Offerors may have to any Indemnified Party unless and to
the extent that the Offerors did not otherwise learn of such action and such
failure by the Indemnified Party results in the forfeiture by the Offerors of
substantial rights and defenses. In case any such action is brought against any
Indemnified Party and such Indemnified Party seeks or intends to seek indemnity
from the Offerors, the Offerors shall be entitled to participate in, and, to the
extent that they may wish, to assume the defense thereof with counsel reasonably
satisfactory to such Indemnified Party; provided, however, if the defendants in
any such action include both the Indemnified Party and the Offerors and the
Indemnified Party shall have reasonably concluded that there
13
may be a conflict between the positions of the Offerors and the Indemnified
Party in conducting the defense of any such action or that there may be legal
defenses available to it and/or other Indemnified Parties which are different
from or additional to those available to the Offerors, the Indemnified Party
shall have the right to select separate counsel to assume such legal defenses
and to otherwise participate in the defense of such action on behalf of such
Indemnified Party. Upon receipt of notice from the Offerors to such Indemnified
Party of their election to so assume the defense of such action and approval by
the Indemnified Party of counsel, the Offerors shall not be liable to such
Indemnified Party under this Section 9 for any legal or other expenses
subsequently incurred by such Indemnified Party in connection with the defense
thereof unless (i) the Indemnified Party shall have employed such counsel in
connection with the assumption of legal defenses in accordance with the proviso
in the preceding sentence (it being understood, however, that the Offerors shall
not be liable for the expenses of more than one separate counsel representing
the Indemnified Parties who are parties to such action), or (ii) the Offerors
shall not have employed counsel reasonably satisfactory to the Indemnified Party
to represent the Indemnified Party within a reasonable time after notice of
commencement of the action, in each of which cases the fees and expenses of
counsel of such Indemnified Party shall be at the expense of the Offerors.
9.3. CONTRIBUTION. If the indemnification provided for in this Section
9 is required by its terms, but is for any reason held to be unavailable to or
otherwise insufficient to hold harmless an Indemnified Party under Section 9.1
in respect of any losses, claims, damages, liabilities or expenses referred to
herein or therein, then the Offerors shall contribute to the amount paid or
payable by such Indemnified Party as a result of any losses, claims, damages,
judgments, liabilities or expenses referred to herein (i) in such proportion as
is appropriate to reflect the relative benefits received by the Offerors, on the
one hand, and the Indemnified Party, on the other hand, from the offering of
such Capital Securities, or (ii) if the allocation provided by clause (i) above
is not permitted by applicable law, in such proportion as is appropriate to
reflect not only the relative benefits referred to in clause (i) above but also
the relative fault of the Offerors, on the one hand, and the Placement Agents,
on the other hand, in connection with the statements or omissions or
inaccuracies in the representations and warranties herein or other breaches
which resulted in such losses, claims, damages, judgments, liabilities or
expenses, as well as any other relevant equitable considerations. The respective
relative benefits received by the Offerors, on the one hand, and the Placement
Agents, on the other hand, shall be deemed to be in the same proportion, in the
case of the Offerors, as the total price paid to the Offerors for the Capital
Securities sold by the Offerors to the Purchasers (net of the compensation paid
to the Placement Agents hereunder, but before deducting expenses), and in the
case of the Placement Agents, as the compensation received by them, bears to the
total of such amounts paid to the Offerors and received by the Placement Agents
as compensation. The relative fault of the Offerors and the Placement Agents
shall be determined by reference to, among other things, whether the untrue
statement or alleged untrue statement of a material fact or the omission or
alleged omission of a material fact or the inaccurate or the alleged inaccurate
representation and/or warranty relates to information supplied by the Offerors
or the Placement Agents and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The provisions set forth in Section 9.2 with respect to notice of commencement
of any action shall apply if a claim for contribution is made under this Section
9.3; provided, however, that no additional notice shall be required with respect
to any action for which notice has been given under Section 9.2 for purposes of
indemnification. The Offerors and the Placement Agents agree that it would not
be just and equitable if contribution pursuant to this Section 9.3 were
determined by pro rata allocation or by any other method of allocation that does
not take account of the equitable considerations referred to in this Section
9.3. The amount paid or payable by an Indemnified Party as a result of the
losses, claims, damages, judgments, liabilities or expenses referred to in this
Section 9.3 shall be deemed to include, subject to the limitations set forth
above, any legal or other expenses reasonably incurred by such Indemnified Party
in connection with investigating or defending any such action or claim. In no
event shall the liability of the Placement Agents hereunder be greater in amount
than the dollar amount of the compensation (net of payment of all expenses)
received by the Placement Agents upon the sale of the
14
Capital Securities giving rise to such obligation. No person found guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
found guilty of such fraudulent misrepresentation.
9.4. ADDITIONAL REMEDIES. The indemnity and contribution agreements
contained in this Section 9 are in addition to any liability that the Offerors
may otherwise have to any Indemnified Party.
9.5. ADDITIONAL INDEMNIFICATION. The Company shall indemnify and hold
harmless the Trust against all loss, liability, claim, damage and expense
whatsoever, as due from the Trust under Sections 9.1 through 9.4 hereof.
SECTION 10. RIGHTS AND RESPONSIBILITIES OF PLACEMENT AGENTS.
10.1. RELIANCE. In performing their duties under this Agreement, the
Placement Agents shall be entitled to rely upon any notice, signature or writing
which they shall in good faith believe to be genuine and to be signed or
presented by a proper party or parties. The Placement Agents may rely upon any
opinions or certificates or other documents delivered by the Offerors or their
counsel or designees to either the Placement Agents or the Purchasers.
10.2. RIGHTS OF PLACEMENT AGENTS. In connection with the performance of
their duties under this Agreement, the Placement Agents shall not be liable for
any error of judgment or any action taken or omitted to be taken unless the
Placement Agents were grossly negligent or engaged in willful misconduct in
connection with such performance or non-performance. No provision of this
Agreement shall require the Placement Agents to expend or risk their own funds
or otherwise incur any financial liability on behalf of the Purchasers in
connection with the performance of any of their duties hereunder. The Placement
Agents shall be under no obligation to exercise any of the rights or powers
vested in them by this Agreement.
SECTION 11. MISCELLANEOUS.
11.1. DISCLOSURE SCHEDULE. The term "Disclosure Schedule," as used
herein, means the schedule, if any, attached to this Agreement that sets forth
items the disclosure of which is necessary or appropriate as an exception to one
or more representations or warranties contained in Section 5 hereof; provided,
that any item set forth in the Disclosure Schedule as an exception to a
representation or warranty shall be deemed an admission by the Offerors that
such item represents an exception, fact, event or circumstance that is
reasonably likely to result in a Material Adverse Effect. The Disclosure
Schedule shall be arranged in paragraphs corresponding to the section numbers
contained in Section 5. Nothing in the Disclosure Schedule shall be deemed
adequate to disclose an exception to a representation or warranty made herein
unless the Disclosure Schedule identifies the exception with reasonable
particularity and describes the relevant facts in reasonable detail. Without
limiting the generality of the immediately preceding sentence, the mere listing
(or inclusion of a copy) of a document or other item in the Disclosure Schedule
shall not be deemed adequate to disclose an exception to a representation or
warranty made herein unless the representation or warranty has to do with the
existence of the document or other item itself. Information provided by the
Company in response to any due diligence questionnaire shall not be deemed part
of the Disclosure Schedule and shall not be deemed to be an exception to one or
more representations or warranties contained in Section 5 hereof unless such
information is specifically included on the Disclosure Schedule in accordance
with the provisions of this Section 11.1.
11.2. LEGAL EXPENSES. At Closing, the Placement Agents shall provide a
credit for the Offerors' transaction-related legal expenses in the amount of
$10,000.00.
15
11.3. NOTICES. Prior to the Closing, and thereafter with respect to
matters pertaining to this Agreement only, all notices and other communications
provided for or permitted hereunder shall be made in writing by hand-delivery,
first-class mail, telex, telecopier or overnight air courier guaranteeing next
day delivery:
if to the Placement Agents, to:
FTN Financial Capital Markets
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopier: ▇▇▇-▇▇▇-▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
and
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, Inc.
▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telecopier: ▇▇▇-▇▇▇-▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, General Counsel
with a copy to:
▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇▇▇, ▇.▇.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopier: ▇▇▇-▇▇▇-▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇, Esq.
and
Sidley ▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇ LLP
▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telecopier: 212-839-5599
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Esq.
if to the Offerors, to:
Citizens Banking Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopier: ▇▇▇-▇▇▇-▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
16
with a copy to:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ PLLC
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopier: ▇▇▇-▇▇▇-▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇
All such notices and communications shall be deemed to have been duly
given (i) at the time delivered by hand, if personally delivered, (ii) five
business days after being deposited in the mail, postage prepaid, if mailed,
(iii) when answered back, if telexed, (iv) the next business day after being
telecopied, or (v) the next business day after timely delivery to a courier, if
sent by overnight air courier guaranteeing next day delivery. From and after the
Closing, the foregoing notice provisions shall be superseded by any notice
provisions of the Operative Documents under which notice is given. The Placement
Agents, the Company, and their respective counsel, may change their respective
notice addresses from time to time by written notice to all of the foregoing
persons.
11.4. PARTIES IN INTEREST, SUCCESSORS AND ASSIGNS. Except as expressly
set forth herein, this Agreement is made solely for the benefit of the Placement
Agents, the Purchasers and the Offerors and any person controlling the Placement
Agents, the Purchasers or the Offerors and their respective successors and
assigns; and no other person shall acquire or have any right under or by virtue
of this Agreement. This Agreement shall inure to the benefit of and be binding
upon the successors and assigns of each of the parties.
11.5. COUNTERPARTS. This Agreement may be executed by the parties
hereto in separate counterparts, each of which when so executed shall be deemed
to be an original and all of which taken together shall constitute one and the
same agreement.
11.6. HEADINGS. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
11.7. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE INTERNAL LAWS (AND NOT THE LAWS PERTAINING TO CONFLICTS
OF LAWS) OF THE STATE OF NEW YORK.
11.8. ENTIRE AGREEMENT. This Agreement, together with the Operative
Documents and the other documents delivered in connection with the transactions
contemplated by this Agreement, is intended by the parties as a final expression
of their agreement and intended to be a complete and exclusive statement of the
agreement and understanding of the parties hereto in respect of the subject
matter contained herein and therein. There are no restrictions, promises,
warranties or undertakings, other than those set forth or referred to herein and
therein. This Agreement, together with the Operative Documents and the other
documents delivered in connection with the transaction contemplated by this
Agreement, supersedes all prior agreements and understandings between the
parties with respect to such subject matter.
11.9. SEVERABILITY. In the event that any one or more of the provisions
contained herein, or the application thereof in any circumstances, is held
invalid, illegal or unenforceable in any respect for any reason, the validity,
legality and enforceability of any such provision in every other respect and of
the remaining provisions hereof shall not be in any way impaired or affected, it
being intended that all of the Placement Agents' and the Purchasers' rights and
privileges shall be enforceable to the fullest extent permitted by law.
17
11.10. SURVIVAL. The Placement Agents and the Offerors, respectively,
agree that the representations, warranties and agreements made by each of them
in this Agreement and in any certificate or other instrument delivered pursuant
hereto shall remain in full force and effect and shall survive the delivery of,
and payment for, the Capital Securities.
Signatures appear on the following page
18
If this Agreement is satisfactory to you, please so indicate by signing
the acceptance of this Agreement and deliver such counterpart to the Offerors
whereupon this Agreement will become binding between us in accordance with its
terms.
Very truly yours,
CITIZENS BANKING CORPORATION CITIZENS MICHIGAN STATUTORY TRUST I
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------- --------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------- -----------------------------
Title: Chairman, President and CEO Title: Administrator
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ By:/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------- --------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------- -----------------------------
Title: Executive Vice President, Title: Administrator
CFO and Treasurer
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
------------------------------
Title: Administrator
CONFIRMED AND ACCEPTED,
as of the date first set forth above
FTN FINANCIAL CAPITAL MARKETS,
A DIVISION OF FIRST TENNESSEE BANK NATIONAL ASSOCIATION,
AS A PLACEMENT AGENT
By:/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------------------------------------------
Name:▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------------------------------------------
Title: Senior Vice President
-----------------------------------------------------------------
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, INC.,
A NEW YORK CORPORATION, AS A PLACEMENT AGENT
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------------------------------------------
Title: Managing Director
-----------------------------------------------------------------
19
EXHIBIT A-1
FORM OF SUBSCRIPTION AGREEMENT
CITIZENS MICHIGAN STATUTORY TRUST I
CITIZENS BANKING CORPORATION
SUBSCRIPTION AGREEMENT
JUNE 26, 2003
THIS SUBSCRIPTION AGREEMENT (this "Agreement") made among Citizens
Michigan Statutory Trust I (the "Trust"), a statutory trust created under the
Connecticut Statutory Trust Act (Chapter 615 of Title 34 of the Connecticut
General Statutes, Section 500, et seq.), Citizens Banking Corporation, a
Michigan corporation, with its principal offices located at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (the "Company" and, collectively with the Trust,
the "Offerors"), and First Tennessee Bank National Association (the
"Purchaser"), and, for purposes of the rights and obligations in Sections 1.2
and 1.4 and Article III only, FTN Financial Capital Markets and ▇▇▇▇▇, ▇▇▇▇▇▇▇▇
& ▇▇▇▇▇, Inc. (the "Placement Agents").
RECITALS:
A. The Trust desires to issue 25,000 of its Floating Rate Capital
Securities (the "Capital Securities"), liquidation amount $1,000.00 per Capital
Security, representing an undivided beneficial interest in the assets of the
Trust (the "Offering"), to be issued pursuant to an Amended and Restated
Declaration of Trust (the "Declaration") by and among the Company, U.S. Bank
National Association ("U.S. Bank"), the administrators named therein, and the
holders (as defined therein), which Capital Securities are to be guaranteed by
the Company with respect to distributions and payments upon liquidation,
redemption and otherwise pursuant to the terms of a Guarantee Agreement between
the Company and U.S. Bank, as trustee (the "Guarantee"); and
B. The proceeds from the sale of the Capital Securities will be
combined with the proceeds from the sale by the Trust to the Company of its
common securities, and will be used by the Trust to purchase an equivalent
amount of Floating Rate Junior Subordinated Deferrable Interest Debentures of
the Company (the "Debentures") to be issued by the Company pursuant to an
indenture to be executed by the Company and U.S. Bank, as trustee (the
"Indenture"); and
C. In consideration of the premises and the mutual representations and
covenants hereinafter set forth, the parties hereto agree as follows:
ARTICLE I
PURCHASE AND SALE OF CAPITAL SECURITIES
1.1. Upon the execution of this Agreement, the Purchaser hereby agrees
to purchase from the Trust 3,030 Capital Securities at a price equal to
$1,000.00 per Capital Security (the "Purchase Price") and the Trust agrees to
sell such Capital Securities to the Purchaser for said Purchase Price. The
rights and preferences of the Capital Securities are set forth in the
Declaration. The Purchase Price is payable in immediately available funds on
June 26, 2003, or such other business day as may be designated by the Purchaser,
but in no event later than June 30, 2003 (the "Closing Date"). The Offerors
shall provide the Purchaser wire transfer instructions no later than 1 day
following the date hereof.
A-1-1
1.2. As a condition to its purchase of the Capital Securities,
Purchaser shall enter into the Custodian Agreement, the form of which is
attached hereto as Exhibit A (the "Custodian Agreement") and, in accordance
therewith, the certificate for the Capital Securities shall be delivered by the
Trust on the Closing Date to the custodian in accordance with the Custodian
Agreement. On or before the Purchase Date (as defined below), Purchaser shall
take all actions necessary or advisable to cause the Capital Securities to be
delivered in accordance with the terms of the Custodian Agreement. Purchaser
shall not transfer the Capital Securities to any person or entity except in
accordance with the terms of the Custodian Agreement.
1.3. The Placement Agreement, dated June 16, 2003 (the "Placement
Agreement"), among the Offerors and the Placement Agents identified therein (the
"Placement Agents") includes certain representations and warranties, covenants
and conditions to closing and certain other matters governing the Offering. The
Placement Agreement is hereby incorporated by reference into this Agreement and
the Purchaser shall be entitled to each of the benefits of the Placement Agents
and the Purchaser under the Placement Agreement and shall be entitled to enforce
the obligations of the Offerors under such Placement Agreement as fully as if
the Purchaser were a party to such Placement Agreement.
1.4. Purchaser hereby grants to the Placement Agents an option (the
"Call Option") to purchase, or arrange for the purchase of, the Capital
Securities in whole or in part from time to time, in an amount not to exceed
their stated aggregate liquidation amount of $3,030,000.00. The Call Option may
be exercised by the Placement Agents at any time and from time to time until the
first to occur of: (i) the transfer of all the Capital Securities from the
Purchaser, or (ii) the redemption, exchange or maturity of all the Capital
Securities held by the Purchaser. A Call Option shall be exercised by delivering
to Purchaser an exercise notice substantially in the form of Exhibit B attached
hereto, such notice to specify the date on which the Capital Securities shall be
purchased (the "Purchase Date") and the amount of the Capital Securities to be
purchased.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF PURCHASER
2.1. The Purchaser understands and acknowledges that none of Capital
Securities, the Debentures nor the Guarantee have been registered under the
Securities Act of 1933, as amended (the "Securities Act"), or any other
applicable securities law, are being offered for sale by the Trust in
transactions not requiring registration under the Securities Act, and may not be
offered, sold, pledged or otherwise transferred by the Purchaser except in
compliance with the registration requirements of the Securities Act or any other
applicable securities laws, pursuant to an exemption therefrom or in a
transaction not subject thereto.
2.2. The Purchaser represents and warrants that, except as contemplated
under Section 1.4 hereof, it is purchasing the Capital Securities for its own
account, for investment, and not with a view to, or for offer or sale in
connection with, any distribution thereof in violation of the Securities Act or
other applicable securities laws, subject to any requirement of law that the
disposition of its property be at all times within its control and subject to
its ability to resell such Capital Securities pursuant to an effective
registration statement under the Securities Act or under Rule 144A or any other
exemption from registration available under the Securities Act or any other
applicable securities law.
2.3. The Purchaser represents and warrants that neither the Offerors
nor the Placement Agents are acting as a fiduciary or financial or investment
adviser for the Purchaser.
A-1-2
2.4. The Purchaser represents and warrants that it is not relying (for
purposes of making any investment decision or otherwise) upon any advice,
counsel or representations (whether written or oral) of the Offerors or of the
Placement Agents.
2.5. The Purchaser represents and warrants that (a) it has consulted
with its own legal, regulatory, tax, business, investment, financial and
accounting advisers in connection herewith to the extent it has deemed
necessary, (b) it has had a reasonable opportunity to ask questions of and
receive answers from officers and representatives of the Offerors concerning
their respective financial condition and results of operations and the purchase
of the Capital Securities, and any such questions have been answered to its
satisfaction, (c) it has had the opportunity to review all publicly available
records and filings concerning the Offerors and it has carefully reviewed such
records and filings that it considers relevant to making an investment decision,
and (d) it has made its own investment decisions based upon its own judgment,
due diligence and advice from such advisers as it has deemed necessary and not
upon any view expressed by the Offerors or the Placement Agents.
2.6. The Purchaser represents and warrants that it is a "qualified
institutional buyer" as defined under Rule 144A under the Securities Act. If the
Purchaser is a dealer of the type described in paragraph (a)(1)(ii) of Rule 144A
under the Securities Act, it owns and invests on a discretionary basis not less
than U.S. $25,000,000.00 in securities of issuers that are not affiliated with
it. The Purchaser is not a participant-directed employee plan, such as a 401(k)
plan, or any other type of plan referred to in paragraph (a)(1)(i)(D) or
(a)(1)(i)(E) of Rule 144A, or a trust fund referred to in paragraph (a)(1)(i)(F)
of Rule 144A that holds the assets of such a plan, unless investment decisions
with respect to the plan are made solely by the fiduciary, trustee or sponsor of
such plan.
2.7. The Purchaser represents and warrants that on each day from the
date on which it acquires the Capital Securities through and including the date
on which it disposes of its interests in the Capital Securities, either (i) it
is not (a) an "employee benefit plan" (as defined in Section 3(3) of the United
States Employee Retirement Income Security Act of 1974, as amended ("ERISA"))
which is subject to the provisions of Part 4 of Subtitle B of Title I of ERISA,
or any entity whose underlying assets include the assets of any such plan (an
"ERISA Plan"), (b) any other "plan" (as defined in Section 4975(e)(1) of the
United States Internal Revenue Code of 1986, as amended (the "Code")) which is
subject to the provisions of Section 4975 of the Code or any entity whose
underlying assets include the assets of any such plan (a "Plan"), (c) an entity
whose underlying assets include the assets of any such ERISA Plan or other Plan
by reason of Department of Labor regulation section 2510.3-101 or otherwise, or
(d) a governmental or church plan that is subject to any federal, state or local
law which is substantially similar to the provisions of Section 406 of ERISA or
Section 4975 of the Code (a "Similar Law"); or (ii) the purchase, holding and
disposition of the Capital Securities by it will satisfy the requirements for
exemptive relief under Prohibited Transaction Class Exemption ("PTCE") ▇▇-▇▇,
▇▇▇▇ ▇▇-▇, ▇▇▇▇ 91-38, ▇▇▇▇ ▇▇-▇▇, ▇▇▇▇ 96-23 or a similar exemption, or, in the
case of a plan subject to a Similar Law, will not result in a non-exempt
violation of such Similar Law.
2.8. The Purchaser represents and warrants that it is acquiring the
Capital Securities as principal for its own account for investment and, except
as contemplated under Section 1.4 hereof, not for sale in connection with any
distribution thereof. It was not formed solely for the purpose of investing in
the Capital Securities, and additional capital or similar contributions were not
specifically solicited from any person owning a beneficial interest in it for
the purpose of enabling it to purchase any Capital Securities. The Purchaser is
not a (i) partnership, (ii) common trust fund or (iii) special trust, pension,
profit sharing or other retirement trust fund or plan in which the partners,
beneficiaries or participants, as applicable, may designate the particular
investments to be made or the allocation of any investment among such partners,
beneficiaries or participants, and it agrees that it shall not hold the Capital
Securities for the benefit of any other person and shall be the sole beneficial
owner thereof for all purposes and that it shall
A-1-3
not sell participation interests in the Capital Securities or enter into any
other arrangement pursuant to which any other person shall be entitled to a
beneficial interest in the distribution on the Capital Securities. The Capital
Securities purchased directly or indirectly by the Purchaser constitute an
investment of no more than 40% of its assets. The Purchaser understands and
agrees that any purported transfer of the Capital Securities to a purchaser
which would cause the representations and warranties of Section 2.6 and this
Section 2.8 to be inaccurate shall be null and void ab initio and the Offerors
retain the right to resell any Capital Securities sold to non-permitted
transferees.
2.9. The Purchaser represents and warrants that it has full power and
authority to execute and deliver this Agreement, to make the representations and
warranties specified herein, and to consummate the transactions contemplated
herein and it has full right and power to subscribe for Capital Securities and
perform its obligations pursuant to this Agreement.
2.10. The Purchaser represents and warrants that (i) the Purchaser is
not in violation or default of any term of its Charter or Bylaws, of any
provision of any mortgage, indenture, contract, agreement, instrument or
contract to which it is a party or by which it is bound or of any judgment,
decree, order, writ or, to its knowledge, any statute, rule or regulation
applicable to the Purchaser which would prevent the Purchaser from performing
any material obligation set forth in this Agreement; and (ii) the execution,
delivery and performance of and compliance with this Agreement, and the
consummation of the transactions contemplated herein, will not, with or without
the passage of time or giving of notice, result in any such material violation,
or be in conflict with or constitute a default under any such term, or the
suspension, revocation, impairment, forfeiture or non-renewal of any permit,
license, authorization or approval applicable to the Purchaser, its business or
operations or any of its assets or properties which would prevent the Purchaser
from performing any material obligations set forth in this Agreement.
2.11. The Purchaser represents and warrants that the Purchaser is a
duly organized bank and in good standing under the laws of the jurisdiction
where it is organized, with full power and authority to perform its obligations
under this Agreement.
2.12. The Purchaser represents and warrants that no filing with, or
authorization, approval, consent, license, order, registration, qualification or
decree of, any governmental body, agency or court having jurisdiction over the
Purchaser, other than those that have been made or obtained, is necessary or
required for the performance by the Purchaser of its obligations under this
Agreement or to consummate the transactions contemplated herein.
2.13. The Purchaser represents and warrants that this Agreement has
been duly authorized, executed and delivered by the Purchaser.
2.14. The Purchaser understands and acknowledges that the Company will
rely upon the truth and accuracy of the foregoing acknowledgments,
representations, warranties and agreements and agrees that, if any of the
acknowledgments, representations, warranties or agreements deemed to have been
made by it by its purchase of the Capital Securities are no longer accurate, it
shall promptly notify the Company.
2.15. The Purchaser understands that no public market exists for any of
the Capital Securities, and that it is unlikely that a public market will ever
exist for the Capital Securities.
A-1-4
ARTICLE III
MISCELLANEOUS
3.1. Any notice or other communication given hereunder shall be deemed
sufficient if in writing and sent by registered or certified mail, return
receipt requested, international courier or delivered by hand against written
receipt therefor, or by facsimile transmission and confirmed by telephone, to
the following addresses, or such other address as may be furnished to the other
parties as herein provided:
To the Offerors: Citizens Banking Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
To the Purchaser: First Tennessee Bank National Association
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
Unless otherwise expressly provided herein, notices shall be
deemed to have been given on the date of mailing, except notice of change of
address, which shall be deemed to have been given when received.
3.2. This Agreement shall not be changed, modified or amended except by
a writing signed by the parties to be charged, and this Agreement may not be
discharged except by performance in accordance with its terms or by a writing
signed by the party to be charged.
3.3. Upon the execution and delivery of this Agreement by the
Purchaser, this Agreement shall become a binding obligation of the Purchaser
with respect to the purchase of Capital Securities as herein provided.
3.4. NOTWITHSTANDING THE PLACE WHERE THIS AGREEMENT MAY BE EXECUTED BY
ANY OF THE PARTIES HERETO, THE PARTIES EXPRESSLY AGREE THAT ALL THE TERMS AND
PROVISIONS HEREOF SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS
OF THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW.
3.5. The parties agree to execute and deliver all such further
documents, agreements and instruments and take such other and further action as
may be necessary or appropriate to carry out the purposes and intent of this
Agreement.
3.6. This Agreement may be executed in one or more counterparts each of
which shall be deemed an original, but all of which shall together constitute
one and the same instrument.
3.7. In the event that any one or more of the provisions contained
herein, or the application thereof in any circumstances, is held invalid,
illegal or unenforceable in any respect for any reason, the validity, legality
and enforceability of any such provision in every other respect and of the
remaining provisions hereof shall not be in any way impaired or affected, it
being intended that all of the Offerors' and the Purchaser's rights and
privileges shall be enforceable to the fullest extent permitted by law.
A-1-5
Signatures appear on the following page
A-1-6
IN WITNESS WHEREOF, this Agreement is agreed to and accepted as of the
day and year first written above.
FIRST TENNESSEE BANK NATIONAL ASSOCIATION
By:
-----------------------------------
Print Name:
--------------------------
Title:
-------------------------------
CITIZENS BANKING CORPORATION
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
CITIZENS MICHIGAN STATUTORY TRUST I
By:
--------------------------------------
Name:
------------------------------------
Title: Administrator
FTN FINANCIAL CAPITAL MARKETS
(for purposes of the rights and
obligations in Sections 1.2 and 1.4 and
Article III only)
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, INC.
(for purposes of the rights and
obligations in Sections 1.2 and 1.4 and
Article III only)
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
A-1-7
EXHIBIT A TO SUBSCRIPTION AGREEMENT
FORM OF CUSTODIAN AGREEMENT
This Custodian Agreement (this "Agreement") is made and entered into as
of June 26, 2003 by and among FTN Financial Capital Markets, a division of First
Tennessee Bank National Association, and ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, Inc. (the
"Placement Agents"), Citizens Banking Corporation, a Michigan corporation (the
"Company"), First Tennessee Bank National Association, a national banking
association (the "Purchaser" and, together with the Company and the Placement
Agents, the "Interested Parties") and U. S. Bank National Association, a
national banking association (the "Custodian").
RECITALS
A. The Purchaser intends to purchase from Citizens Michigan Statutory
Trust I, a Connecticut statutory trust (the "Trust"), $3,030,000.00 aggregate
liquidation amount of the Trust's Floating Rate Capital Securities (the "Capital
Securities").
B. The Purchaser intends to grant an option (the "Call Option") to the
Placement Agents to purchase the Capital Securities at any time and from time to
time immediately following the date hereof (the "Option Exercise Period") in an
amount not to exceed the Capital Securities' aggregate liquidation amount.
C. The Interested Parties intend to provide for the custody of the
Capital Securities and certain other securities on the terms set forth herein.
D. The Custodian is willing to hold and administer such securities and
to distribute the securities held by it in accordance with the agreement of the
Interested Parties and/or arbitral or judicial orders and decrees as set forth
in this Agreement.
NOW, THEREFORE, in consideration of the foregoing, the mutual covenants
herein contained and other good and valuable consideration (the receipt,
adequacy and sufficiency of which are hereby acknowledged by the parties by
their execution hereof), the parties agree as follows:
1. Delivery of Securities. On or before the date hereof:
(a) The Company shall deliver to the Custodian a signed, authenticated
Capital Securities certificate, with the Purchaser designated as owner
thereof (the "Original Securities"). The Custodian shall have no
responsibility for the genuineness, validity, market value, title or
sufficiency for any intended purpose of the Original Securities.
(b) The Company shall deliver to the Custodian five signed,
unauthenticated and undated Capital Securities certificates with no
holder designated (the "Replacement Securities"). The Custodian shall
have no responsibility for the genuineness, validity, market value,
title or sufficiency for any intended purpose of the Replacement
Securities.
2. Timing of Release from Custody.
(a) Upon receipt of a copy of an option exercise notice to be delivered
in connection with the Placement Agents' exercise of a Call Option, on
the effective date set forth in such option exercise notice, the
Custodian shall:
A-1-A-1
(i) Deliver the Original Securities certificate to U.S. Bank
National Association, as Institutional Trustee (the "Trustee")
under the Amended and Restated Declaration of Trust, dated as
of the date hereof, among the Trustee, the Company and the
administrators named therein (the "Declaration") for the
purpose of canceling the Original Securities certificate in
accordance with the terms of the Declaration; and
(ii) Deliver the Replacement Securities certificate(s) in the
amount designated in the option exercise notice to the Trustee
for the purpose of completing and authenticating the
Replacement Securities certificate(s) in accordance with the
terms of the Declaration.
Upon expiration of the Call Option, this Agreement shall terminate and
the Custodian and the Interested Parties shall be released from all
obligations hereunder.
3. Concerning the Custodian.
(a) Each Interested Party acknowledges and agrees that the Custodian
(i) shall not be responsible for any of the agreements referred to or
described herein (including without limitation the Declaration), or for
determining or compelling compliance therewith, and shall not otherwise
be bound thereby, (ii) shall be obligated only for the performance of
such duties as are expressly and specifically set forth in this
Agreement on its part to be performed, each of which are ministerial
(and shall not be construed to be fiduciary) in nature, and no implied
duties or obligations of any kind shall be read into this Agreement
against or on the part of the Custodian, (iii) shall not be obligated
to take any legal or other action hereunder which might in its judgment
involve or cause it to incur any expense or liability unless it shall
have been furnished with acceptable indemnification, (iv) may rely on
and shall be protected in acting or refraining from acting upon any
written notice, instruction, instrument, statement, certificate,
request or other document furnished to it hereunder and believed by it
to be genuine and to have been signed or presented by the proper
person, and shall have no responsibility for determining the accuracy
thereof, and (v) may consult counsel satisfactory to it, including
in-house counsel, and the opinion or advice of such counsel in any
instance shall be full and complete authorization and protection in
respect of any action taken, suffered or omitted by it hereunder in
good faith and in accordance with the opinion or advice of such
counsel.
(b) The Custodian shall not be liable to anyone for any action taken or
omitted to be taken by it hereunder except in the case of the
Custodian's negligence or willful misconduct in breach of the terms of
this Agreement. In no event shall the Custodian be liable for indirect,
punitive, special or consequential damage or loss (including but not
limited to lost profits) whatsoever, even if the Custodian has been
informed of the likelihood of such loss or damage and regardless of the
form of action.
(c) The Custodian shall have no more or less responsibility or
liability on account of any action or omission of any book-entry
depository, securities intermediary or other subcustodian employed by
the Custodian than any such book-entry depository, securities
intermediary or other subcustodian has to the Custodian, except to the
extent that such action or omission of any book-entry depository,
securities intermediary or other subcustodian was caused by the
Custodian's own negligence, bad faith or willful misconduct in breach
of this Agreement.
(d) The recitals contained herein shall be taken as the statements of
the Company, and the Custodian assumes no responsibility for the
correctness of the same. The Custodian makes no representations as to
the validity or sufficiency of this Agreement or the Capital
Securities. The Custodian shall not be accountable for the use or
application by the Company of any Capital Securities or the proceeds of
any Capital Securities.
A-1-A-2
4. Compensation, Expense Reimbursement and Indemnification.
(a) The Custodian hereby waives its customary fees for services
rendered hereunder.
(b) Each of the Interested Parties agree, jointly and severally, to
reimburse the Custodian on demand for all costs and expenses incurred
in connection with the administration of this Agreement or the
performance or observance of its duties hereunder which are in excess
of its customary compensation for normal services hereunder, including
without limitation, payment of any legal fees and expenses incurred by
the Custodian in connection with resolution of any claim by any party
hereunder.
(c) Each of the Interested Parties covenant and agree, jointly and
severally, to indemnify the Custodian (and its directors, officers and
employees) and hold it (and such directors, officers and employees)
harmless from and against any loss, liability, damage, cost and expense
of any nature incurred by the Custodian arising out of or in connection
with this Agreement or with the administration of its duties hereunder,
including but not limited to attorney's fees and other costs and
expenses of defending or preparing to defend against any claim of
liability unless and except to the extent such loss, liability, damage,
cost and expense shall be caused by the Custodian's negligence, bad
faith, or willful misconduct. The provisions in this paragraph 4 shall
survive the expiration of this Agreement.
5. Voting Rights. The Custodian shall be under no obligation to preserve,
protect or exercise rights in the Original Securities, and shall be responsible
only for reasonable measures to maintain the physical safekeeping thereof, and
otherwise to perform and observe such duties on its part as are expressly set
forth in this Agreement. The Custodian shall not be responsible for forwarding
to any Party, notifying any Party with respect to, or taking any action with
respect to, any notice, solicitation or other document or information, written
or otherwise, received from an issuer or other person with respect to the
Original Securities, including but not limited to, proxy material, tenders,
options, the pendency of calls and maturities and expiration of rights.
6. Resignation. The Custodian may at any time resign as Custodian hereunder by
giving thirty (30) days' prior written notice of resignation to each of the
Interested Parties. Prior to the effective date of the resignation as specified
in such notice, the Interested Parties will issue to the Custodian a written
instruction authorizing redelivery of the Original Securities and the
Replacement Securities to a bank or trust company that they select as successor
to the Custodian hereunder. If, however, the Interested Parties shall fail to
name such a successor custodian within twenty days after the notice of
resignation from the Custodian, the Placement Agents shall be entitled to name
such successor custodian. If no successor custodian is named by the Interested
Parties or the Placement Agents, the Custodian may apply to a court of competent
jurisdiction for appointment of a successor custodian.
7. Dispute Resolution. It is understood and agreed that should any dispute arise
with respect to the delivery, ownership, right of possession, and/or disposition
of the Original Securities or the Replacement Securities, or should any claim be
made upon the Custodian, the Original Securities or the Replacement Securities
by a third party, the Custodian upon receipt of notice of such dispute or claim
is authorized and shall be entitled (at its sole option and election) to retain
in its possession without liability to anyone, all or any of said Original
Securities and Replacement Securities until such dispute shall have been settled
either by the mutual written agreement of the parties involved or by a final
order, decree or judgment of a court in the United States of America, the time
for perfection of an appeal of such order, decree or judgment having expired.
The Custodian may, but shall be under no duty whatsoever to, institute or defend
any legal proceedings which relate to the Original Securities and Replacement
Securities.
A-1-A-3
8. Consent to Jurisdiction and Service. Each of the Interested Parties hereby
absolutely and irrevocably consent and submit to the jurisdiction of the courts
in the Commonwealth of Massachusetts and of any Federal court located in said
Commonwealth in connection with any actions or proceedings brought against any
of the Interested Parties (or each of them) by the Custodian arising out of or
relating to this Agreement. In any such action or proceeding, the Interested
Parties each hereby absolutely and irrevocably (i) waives any objection to
jurisdiction or venue, (ii) waives personal service of any summons, complaint,
declaration or other process, and (iii) agrees that the service thereof may be
made by certified or registered first-class mail directed to such party, as the
case may be, at their respective addresses in accordance with paragraph 10
hereof.
9. Force Majeure. The Custodian shall not be responsible for delays or failures
in performance resulting from acts beyond its control. Such acts shall include
but not be limited to acts of God, strikes, lockouts, riots, acts of war,
epidemics, governmental regulations superimposed after the fact, fire,
communication line failures, computer viruses, power failures, earthquakes or
other disasters.
10. Notices.
(a) Any notice permitted or required hereunder shall be in writing, and
shall be sent by personal delivery, overnight delivery by a recognized
courier or delivery service, mailed by registered or certified mail,
return receipt requested, postage prepaid, or by confirmed facsimile
accompanied by mailing of the original on the same day by first class
mail, postage prepaid, in each case the parties at their address set
forth below (or to such other address as any such party may hereafter
designate by written notice to the other parties).
If to the Placement Agents:
FTN Financial Capital Markets
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, Inc.
▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, General Counsel
If to the Company:
Citizens Banking Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
If to the Purchaser:
First Tennessee Bank National Association
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇
A-1-A-4
If to the Custodian:
U.S. Bank National Association
▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ - ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Trust Services Division
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
11. Miscellaneous.
(a) Binding Effect. This Agreement shall be binding upon the respective
parties hereto and their heirs, executors, successors and assigns.
(b) Modifications. This Agreement may not be altered or modified
without the express written consent of the parties hereto. No course of
conduct shall constitute a waiver of any of the terms and conditions of
this Agreement, unless such waiver is specified in writing, and then
only to the extent so specified. A waiver of any of the terms and
conditions of this Agreement on one occasion shall not constitute a
waiver of the other terms of this Agreement, or of such terms and
conditions on any other occasion.
(c) Governing Law. This Agreement shall be governed by and construed in
accordance with the internal laws of the Commonwealth of Massachusetts.
(d) Reproduction of Documents. This Agreement and all documents
relating thereto, including, without limitation, (a) consents, waivers
and modifications which may hereafter be executed, and (b) certificates
and other information previously or hereafter furnished, may be
reproduced by any photographic, photostatic, microfilm, optical disk,
micro-card, miniature photographic or other similar process. The
parties agree that any such reproduction shall be admissible in
evidence as the original itself in any judicial or administrative
proceeding, whether or not the original is in existence and whether or
not such reproduction was made by a party in the regular course of
business, and that any enlargement, facsimile or further reproduction
of such reproduction shall likewise be admissible in evidence.
(e) Counterparts. This Agreement may be executed in several
counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
signatures appear on the following page
A-1-A-5
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day first above written.
FTN FINANCIAL CAPITAL MARKETS
By:
--------------------------------------------
Print Name:
------------------------------------
Title:
-----------------------------------------
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, INC.
By:
--------------------------------------------
Print Name:
------------------------------------
Title:
-----------------------------------------
U. S. BANK NATIONAL ASSOCIATION
By:
--------------------------------------------
Print Name:
------------------------------------
Title:
-----------------------------------------
CITIZENS BANKING CORPORATION
By:
--------------------------------------------
Print Name:
------------------------------------
Title:
-----------------------------------------
FIRST TENNESSEE BANK NATIONAL
ASSOCIATION
By:
--------------------------------------------
Print Name:
------------------------------------
Title:
-----------------------------------------
▇-▇-▇-▇
▇▇▇▇▇▇▇ ▇ TO SUBSCRIPTION AGREEMENT
FORM OF OPTION EXERCISE NOTICE
[DATE]
First Tennessee Bank National Association
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇
Ladies and Gentlemen:
The undersigned hereby exercises its option to purchase, or arrange for
the purchase of [_________] of the Capital Securities of Citizens Michigan
Statutory Trust I in accordance with the terms of the Subscription Agreement
dated June 26, 2003 among you, the undersigned, Citizens Banking Corporation and
Citizens Michigan Statutory Trust I (the "Offerors"), such purchase to be
effective on [DATE OF PURCHASE]. In accordance with Section 7.9 of the Placement
Agreement dated June 16, 2003 between the Offerors and the undersigned (the
"Placement Agreement"), periodic reports shall be delivered to [_______________]
on each March 26, June 16, September 26 and December 26 during the term of the
Capital Securities, commencing [___________], in the form attached thereto.
Capitalized terms used in this notice and not otherwise defined shall have the
meanings ascribed to such terms in the Placement Agreement.
By copy of this notice, the undersigned hereby instructs the Custodian
to deliver the Original Securities certificate to U.S. Bank National
Association, as Institutional Trustee (the "Trustee") under the Amended and
Restated Trust Agreement dated June 26, 2003 among the Trustee, Citizens Banking
Corporation and the administrative trustees named therein (the "Trust
Agreement") for cancellation in accordance with the terms of the Trust Agreement
and to deliver the Replacement Securities certificate to the Trustee for
authentication in accordance with the terms of the Trust Agreement.
By copy of this notice, the Institutional Trustee is hereby instructed
to make the Replacement Securities certificate payable to [______________] in
the liquidation amount of [_________] and to authenticate and deliver the
Replacement Securities certificate to [_____________] on or before the [DATE OF
PURCHASE].
FTN FINANCIAL CAPITAL MARKETS
By:
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, INC.
By:
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
cc: Citizens Banking Corporation
A-1-B-1
EXHIBIT A-2
FORM OF SUBSCRIPTION AGREEMENT
CITIZENS MICHIGAN STATUTORY TRUST I
CITIZENS BANKING CORPORATION
SUBSCRIPTION AGREEMENT
JUNE 26, 2003
THIS SUBSCRIPTION AGREEMENT (this "Agreement") made among Citizens Michigan
Statutory Trust I (the "Trust"), a statutory trust created under the Connecticut
Statutory Trust Act (Chapter 615 of Title 34 of the Connecticut General
Statutes, Section 500, et seq.), Citizens Banking Corporation, a Michigan
corporation, with its principal offices located at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (the "Company" and, collectively with the Trust, the
"Offerors"), and Preferred Term Securities X, Ltd. (the "Purchaser").
RECITALS:
A. The Trust desires to issue 25,000 of its Floating Rate Capital
Securities (the "Capital Securities"), liquidation amount $1,000.00 per Capital
Security, representing an undivided beneficial interest in the assets of the
Trust (the "Offering"), to be issued pursuant to an Amended and Restated
Declaration of Trust (the "Declaration") by and among the Company, U. S. Bank
National Association ("U. S. Bank"), the administrators named therein, and the
holders (as defined therein), which Capital Securities are to be guaranteed by
the Company with respect to distributions and payments upon liquidation,
redemption and otherwise pursuant to the terms of a Guarantee Agreement between
the Company and U. S. Bank, as trustee (the "Guarantee"); and
B. The proceeds from the sale of the Capital Securities will be
combined with the proceeds from the sale by the Trust to the Company of its
common securities, and will be used by the Trust to purchase an equivalent
amount of Floating Rate Junior Subordinated Deferrable Interest Debentures of
the Company (the "Debentures") to be issued by the Company pursuant to an
indenture to be executed by the Company and U. S. Bank, as trustee (the
"Indenture"); and
C. In consideration of the premises and the mutual representations and
covenants hereinafter set forth, the parties hereto agree as follows:
ARTICLE I
PURCHASE AND SALE OF CAPITAL SECURITIES
1.1. Upon the execution of this Agreement, the Purchaser hereby agrees
to purchase from the Trust 21,970 Capital Securities at a price equal to
$1,000.00 per Capital Security (the "Purchase Price") and the Trust agrees to
sell such Capital Securities to the Purchaser for said Purchase Price. The
rights and preferences of the Capital Securities are set forth in the
Declaration. The Purchase Price is payable in immediately available funds on
June 26, 2003, or such other business day as may be designated by the Purchaser,
but in no event later than June 30, 2003 (the "Closing Date"). The Offerors
shall provide the Purchaser wire transfer instructions no later than 3 days
prior to the Closing Date.
1.2. The certificate for the Capital Securities shall be delivered by
the Trust on the Closing Date to the Purchaser or its designee.
A-2-1
1.3. The Placement Agreement, dated June 16, 2003 (the "Placement
Agreement"), among the Offerors and the Placement Agents identified therein
includes certain representations and warranties, covenants and conditions to
closing and certain other matters governing the Offering. The Placement
Agreement is hereby incorporated by reference into this Agreement and the
Purchaser shall be entitled to each of the benefits of the Placement Agents and
the Purchaser under the Placement Agreement and shall be entitled to enforce the
obligations of the Offerors under such Placement Agreement as fully as if the
Purchaser were a party to such Placement Agreement.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF PURCHASER
2.1. The Purchaser understands and acknowledges that neither the
Capital Securities, the Debentures nor the Guarantee have been registered under
the Securities Act of 1933, as amended (the "Securities Act"), or any other
applicable securities law, are being offered for sale by the Trust in
transactions not requiring registration under the Securities Act, and may not be
offered, sold, pledged or otherwise transferred by the Purchaser except in
compliance with the registration requirements of the Securities Act or any other
applicable securities laws, pursuant to an exemption therefrom or in a
transaction not subject thereto.
2.2. The Purchaser represents, warrants and certifies that (i) it is
not a "U.S. person" as such term is defined in Rule 902 under the Securities
Act, (ii) it is not acquiring the Capital Securities for the account or benefit
of any such U.S. person, (iii) the offer and sale of Capital Securities to the
Purchaser constitutes an "offshore transaction" under Regulation S of the
Securities Act, and (iv) it will not engage in hedging transactions with regard
to the Capital Securities unless such transactions are conducted in compliance
with the Securities Act and the Purchaser agrees to the legends and transfer
restrictions set forth on the Capital Securities certificate.
2.3. The Purchaser represents and warrants that it is purchasing the
Capital Securities for its own account, for investment, and not with a view to,
or for offer or sale in connection with, any distribution thereof in violation
of the Securities Act or other applicable securities laws, subject to any
requirement of law that the disposition of its property be at all times within
its control and subject to its ability to resell such Capital Securities
pursuant to an effective registration statement under the Securities Act or
under Rule 144A or any other exemption from registration available under the
Securities Act or any other applicable Securities law.
2.4. The Purchaser represents and warrants that it has full power and
authority to execute and deliver this Agreement, to make the representations and
warranties specified herein, and to consummate the transactions contemplated
herein and it has full right and power to subscribe for Capital Securities and
perform its obligations pursuant to this Agreement.
2.5. The Purchaser, a Cayman Islands Company whose business includes
issuance of certain notes and acquiring the Capital Securities and other similar
securities, represents and warrants that it has such knowledge and experience in
financial and business matters that it is capable of evaluating the merits and
risks of purchasing the Capital Securities, has had the opportunity to ask
questions of, and receive answers and request additional information from, the
Offerors and is aware that it may be required to bear the economic risk of an
investment in the Capital Securities.
2.6. The Purchaser represents and warrants that no filing with, or
authorization, approval, consent, license, order, registration, qualification or
decree of, any governmental body, agency or court having jurisdiction over the
Purchaser, other than those that have been made or obtained, is necessary or
required
A-2-2
for the performance by the Purchaser of its obligations under this Agreement or
to consummate the transactions contemplated herein.
2.7. The Purchaser represents and warrants that this Agreement has been
duly authorized, executed and delivered by the Purchaser.
2.8. The Purchaser represents and warrants that (i) the Purchaser is
not in violation or default of any term of its Memorandum of Association or
Articles of Association, of any provision of any mortgage, indenture, contract,
agreement, instrument or contract to which it is a party or by which it is bound
or of any judgment, decree, order, writ or, to its knowledge, any statute, rule
or regulation applicable to the Purchaser which would prevent the Purchaser from
performing any material obligation set forth in this Agreement; and (ii) the
execution, delivery and performance of and compliance with this Agreement, and
the consummation of the transactions contemplated herein, will not, with or
without the passage of time or giving of notice, result in any such material
violation, or be in conflict with or constitute a default under any such term,
or the suspension, revocation, impairment, forfeiture or non-renewal of any
permit, license, authorization or approval applicable to the Purchaser, its
business or operations or any of its assets or properties which would prevent
the Purchaser from performing any material obligations set forth in this
Agreement.
2.9. The Purchaser represents and warrants that the Purchaser is an
exempted company with limited liability duly incorporated, validly existing and
in good standing under the laws of the jurisdiction where it is organized, with
full power and authority to perform its obligations under this Agreement.
2.10. The Purchaser understands and acknowledges that the Company will
rely upon the truth and accuracy of the foregoing acknowledgments,
representations, warranties and agreements and agrees that, if any of the
acknowledgments, representations, warranties or agreements deemed to have been
made by it by its purchase of the Capital Securities are no longer accurate, it
shall promptly notify the Company.
2.11. The Purchaser understands that no public market exists for any of
the Capital Securities, and that it is unlikely that a public market will ever
exist for the Capital Securities.
ARTICLE III
MISCELLANEOUS
3.1. Any notice or other communication given hereunder shall be deemed
sufficient if in writing and sent by registered or certified mail, return
receipt requested, international courier or delivered by hand against written
receipt therefor, or by facsimile transmission and confirmed by telephone, to
the following addresses, or such other address as may be furnished to the other
parties as herein provided:
To the Offerors: Citizens Banking Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
To the Purchaser: Preferred Term Securities X, Ltd.
▇/▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇▇ ▇▇
▇▇▇▇▇▇▇▇▇▇ House
South Church Street
A-2-3
▇▇▇▇▇▇ Town, Grand Cayman
Cayman Islands
Attention: The Directors
Fax: ▇▇▇-▇▇▇-▇▇▇▇
Unless otherwise expressly provided herein, notices shall be deemed to
have been given on the date of mailing, except notice of change of address,
which shall be deemed to have been given when received.
3.2. This Agreement shall not be changed, modified or amended except by
a writing signed by the parties to be charged, and this Agreement may not be
discharged except by performance in accordance with its terms or by a writing
signed by the party to be charged.
3.3. Upon the execution and delivery of this Agreement by the
Purchaser, this Agreement shall become a binding obligation of the Purchaser
with respect to the purchase of Capital Securities as herein provided.
3.4. NOTWITHSTANDING THE PLACE WHERE THIS AGREEMENT MAY BE EXECUTED BY
ANY OF THE PARTIES HERETO, THE PARTIES EXPRESSLY AGREE THAT ALL THE TERMS AND
PROVISIONS HEREOF SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS
OF THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW.
3.5. The parties agree to execute and deliver all such further
documents, agreements and instruments and take such other and further action as
may be necessary or appropriate to carry out the purposes and intent of this
Agreement.
3.6. This Agreement may be executed in one or more counterparts each of
which shall be deemed an original, but all of which shall together constitute
one and the same instrument.
3.7. In the event that any one or more of the provisions contained
herein, or the application thereof in any circumstances, is held invalid,
illegal or unenforceable in any respect for any reason, the validity, legality
and enforceability of any such provision in every other respect and of the
remaining provisions hereof shall not be in any way impaired or affected, it
being intended that all of the Offerors' and the Purchaser's rights and
privileges shall be enforceable to the fullest extent permitted by law.
Signatures appear on the following page
A-2-4
IN WITNESS WHEREOF, I have set my hand the day and year first written
above.
PREFERRED TERM SECURITIES X, LTD.
By:
--------------------------------------
Print Name:
-----------------------------
Title:
----------------------------------
IN WITNESS WHEREOF, this Subscription Agreement is agreed to and
accepted as of the day and year first written above.
CITIZENS BANKING CORPORATION
By:
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
CITIZENS MICHIGAN STATUTORY TRUST I
By:
----------------------------------
Name:
--------------------------------
Title: Administrator
▇-▇-▇
▇▇▇▇▇▇▇ ▇-▇
FORM OF COMPANY COUNSEL OPINION
June 26, 2003
First Tennessee Bank National Association FTN Financial Capital Markets
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Preferred Term Securities X, Ltd. ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, Inc.
c/o Maples Finance Limited ▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
P. ▇. ▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ Town, Grand Cayman
Cayman Islands
Ladies and Gentlemen:
We have acted as counsel to Citizens Banking Corporation (the
"Company"), a Michigan corporation in connection with a certain Placement
Agreement, dated June 16, 2003, (the "Placement Agreement"), between the Company
and Citizens Michigan Statutory Trust I (the "Trust"), on one hand, and FTN
Financial Capital Markets and ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, Inc. (the "Placement
Agents"), on the other hand. Pursuant to the Placement Agreement, and subject to
the terms and conditions stated therein, the Trust will issue and sell to First
Tennessee Bank National Association and Preferred Term Securities X, Ltd. (the
"Purchasers"), $21,970,000.00 aggregate principal amount of Floating Rate
Capital Securities (liquidation amount $1,000.00 per capital security) (the
"Capital Securities").
Capitalized terms used herein and not otherwise defined shall have the
same meanings ascribed to them in the Placement Agreement.
The law covered by the opinions expressed herein is limited to the law
of the United States of America and of the State of Michigan.
We have made such investigations of law as, in our judgment, were
necessary to render the following opinions. We have also reviewed (a) the
Company's Articles of Incorporation, as amended, and its By-Laws, as amended;
and (b) such corporate documents, records, information and certificates of the
Company and its Subsidiaries, certificates of public officials or government
authorities and other documents as we have deemed necessary or appropriate as a
basis for the opinions hereinafter expressed. As to certain facts material to
our opinions, we have relied, with your permission, upon statements,
certificates or representations, including those delivered or made in connection
with the above-referenced transaction, of officers and other representatives of
the Company and its Subsidiaries and the Trust.
As used herein, the phrase "to our knowledge" or "to the best of our
knowledge" or other similar phrase means the actual knowledge of the attorneys
who have had active involvement in the transactions described above or who have
prepared or signed this opinion letter, or who otherwise have devoted
substantial attention to legal matters for the Company.
Based upon and subject to the foregoing and the further qualifications
set forth below, we are of the opinion as of the date hereof that:
B-1-1
1. The Company is validly existing and in good standing under the laws
of the State of Michigan and is duly registered as a bank holding company under
the Bank Holding Company Act of 1956, as amended. Each of the Significant
Subsidiaries is validly existing and in good standing under the laws of its
jurisdiction of organization. Each of the Company and the Significant
Subsidiaries has full corporate power and authority to own or lease its
properties and to conduct its business as such business is currently conducted
in all material respects. To the best of our knowledge, all outstanding shares
of capital stock of the Significant Subsidiaries have been duly authorized and
validly issued, and are fully paid and nonassessable except to the extent such
shares may be deemed assessable under 12 U.S.C. Section 1831o or 12 U.S.C.
Section 55, and are owned of record and beneficially, directly or indirectly, by
the Company.
2. The issuance, sale and delivery of the Debentures in accordance with
the terms and conditions of the Placement Agreement and the Operative Documents
have been duly authorized by all necessary actions of the Company. The issuance,
sale and delivery of the Debentures by the Company and the issuance, sale and
delivery of the Trust Securities by the Trust do not give rise to any preemptive
or other rights to subscribe for or to purchase any shares of capital stock or
equity securities of the Company or the Significant Subsidiaries pursuant to the
corporate Articles of Incorporation or Charter, By-Laws or other governing
documents of the Company or the Significant Subsidiaries, or, to the best of our
knowledge, any agreement or other instrument to which either Company or the
Subsidiaries is a party or by which the Company or the Significant Subsidiaries
may be bound.
3. The Company has all requisite corporate power to enter into and
perform its obligations under the Placement Agreement and the Subscription
Agreements, and the Placement Agreement and the Subscription Agreements have
been duly and validly authorized, executed and delivered by the Company and
constitute the legal, valid and binding obligations of the Company enforceable
in accordance with their terms, except as the enforcement thereof may be limited
by general principles of equity and by bankruptcy or other laws affecting
creditors' rights generally, and except as the indemnification and contribution
provisions thereof may be limited under applicable laws and certain remedies may
not be available in the case of a non-material breach.
4. Each of the Indenture, the Trust Agreement and the Guarantee
Agreement has been duly authorized, executed and delivered by the Company, and
is a valid and legally binding obligation of the Company enforceable in
accordance with its terms, subject to the effect of bankruptcy, insolvency,
reorganization, receivership, moratorium and other laws affecting the rights and
remedies of creditors generally and of general principles of equity.
5. The Debentures have been duly authorized, executed and delivered by
the Company, are entitled to the benefits of the Indenture and are legal, valid
and binding obligations of the Company enforceable against the Company in
accordance with their terms, subject to the effect of bankruptcy, insolvency,
reorganization, receivership, moratorium and other laws affecting the rights and
remedies of creditors generally and of general principles of equity.
6. To the best of our knowledge, neither the Company, the Trust, nor
any other Subsidiaries of the Company is in breach or violation of, or default
under, with or without notice or lapse of time or both, its Articles of
Incorporation or Charter, By-Laws or other governing documents (including
without limitation, the Trust Agreement). The execution, delivery and
performance of the Placement Agreement and the Operative Documents and the
consummation of the transactions contemplated by the Placement Agreement and the
Operative Documents do not and will not (i) result in the creation or imposition
of any material lien, claim, charge, encumbrance or restriction upon any
property or assets of the Company or its Subsidiaries, or (ii) conflict with,
constitute a material breach or violation of, or constitute a material default
under, with or without notice or lapse of time or both, any of the terms,
provisions or conditions of
B-1-2
(A) the Articles of Incorporation or Charter, By-Laws or other governing
documents of the Company or its Subsidiaries, or (B) to the best of our
knowledge, any material contract, indenture, mortgage, deed of trust, loan or
credit agreement, note, lease, franchise, license or any other agreement or
instrument to which the Company or its Subsidiaries is a party or by which any
of them or any of their respective properties may be bound or (C) any order,
decree, judgment, franchise, license, permit, rule or regulation of any court,
arbitrator, government, or governmental agency or instrumentality, domestic or
foreign, known to us having jurisdiction over the Company or its Subsidiaries or
any of their respective properties which, in the case of each of (i) or (ii)
above, is material to the Company and its Subsidiaries on a consolidated basis.
7. Except for filings, registrations or qualifications that may be
required by applicable securities laws, no authorization, approval, consent or
order of, or filing, registration or qualification with, any person (including,
without limitation, any court, governmental body or authority) is required under
the laws of the State of Michigan in connection with the transactions
contemplated by the Placement Agreement and the Operative Documents in
connection with the offer and sale of the Capital Securities as contemplated by
the Placement Agreement and the Operative Documents.
8. To the best of our knowledge (i) no action, suit or proceeding at
law or in equity is pending or threatened to which the Offerors or their
Subsidiaries are or may be a party, and (ii) no action, suit or proceeding is
pending or threatened against or affecting the Offerors or their Subsidiaries or
any of their properties, before or by any court or governmental official,
commission, board or other administrative agency, authority or body, or any
arbitrator, wherein an unfavorable decision, ruling or finding could reasonably
be expected to have a material adverse effect on the consummation of the
transactions contemplated by the Placement Agreement and the Operative Documents
or the issuance and sale of the Capital Securities as contemplated therein or
the condition (financial or otherwise), earnings, affairs, business, or results
of operations of the Offerors and their Subsidiaries on a consolidated basis.
9. Assuming the truth and accuracy of the representations and
warranties of the Placement Agents in the Placement Agreement and the Purchasers
in the Subscription Agreements, it is not necessary in connection with the
offering, sale and delivery of the Capital Securities, the Debentures and the
Guarantee Agreement (or the Guarantee) to register the same under the Securities
Act of 1933, as amended, under the circumstances contemplated in the Placement
Agreement and the Subscription Agreements.
10. Neither the Company nor the Trust is or after giving effect to the
offering and sale of the Capital Securities and the consummation of the
transactions described in the Placement Agreement will be, an "investment
company" or an entity "controlled" by an "investment company," in each case
within the meaning of the Investment Company Act of 1940, as amended, without
regard to Section 3(c) of such Act.
The opinion expressed in the first two sentences of numbered paragraph
1 of this Opinion Letter is based solely upon certain certificates and
confirmations issued by the applicable governmental officer or authority with
respect to each of the Company and the Significant Subsidiaries.
With respect to the foregoing opinions, since no member of this firm
is actively engaged in the practice of law in the States of Connecticut or New
York, we do not express any opinions as to the laws of such states and have (i)
relied, with your approval, upon the opinion of ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP with
respect to matters of Connecticut law and (ii) assumed, with your approval and
without rendering any opinion to such effect, that the laws of the State of New
York, in all respects material to this opinion, are substantively identical to
the laws of the State of Michigan, without regard to conflict of law provisions.
B-1-3
This opinion is rendered to you solely pursuant to Section 3.1(a) of
the Placement Agreement. As such, it may be relied upon by you only and may not
be used or relied upon by any other person for any purpose whatsoever without
our prior written consent.
Very truly yours,
▇-▇-▇
▇▇▇▇▇▇▇ ▇-▇
FORM OF CONNECTICUT COUNSEL OPINION
TO THE PARTIES LISTED
ON SCHEDULE I HERETO
Ladies and Gentlemen:
We have acted as special counsel in the State of Connecticut (the
"State") for Citizens Michigan Statutory Trust I (the "Trust"), a Connecticut
statutory trust formed pursuant to the Amended and Restated Declaration of Trust
(the "Trust Agreement") dated as of the date hereof, among Citizens Banking
Corporation, a Michigan corporation (the "Sponsor"), U. S. Bank National
Association, a national banking association ("U.S. Bank"), in its capacity as
Institutional Trustee (the "Institutional Trustee"), and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, each, an individual, (each, an
"Administrator") in connection with the issuance by the Trust to the Holders (as
defined in the Trust Agreement) of its capital securities (the "Capital
Securities") pursuant to the Placement Agreement dated as of June 16, 2003 (the
"Placement Agreement"), the issuance by the Trust to the Sponsor of its Common
Securities, pursuant to the Trust Agreement and the acquisition by the Trust
from the Sponsor of Debentures, issued pursuant to the Indenture dated as of the
date hereof (the "Indenture").
The Institutional Trustee has requested that we deliver this opinion to
you in accordance with Section 3.1(b) of the Placement Agreement. Capitalized
terms not otherwise defined herein shall have the meanings specified in, or
defined by reference in or set forth in the Operative Documents (as defined
below).
Our representation of the Trust has been as special counsel for the
limited purposes stated above. As to all matters of fact (including factual
conclusions and characterizations and descriptions of purpose, intention or
other state of mind), we have relied, with your permission, entirely upon (i)
the representations and warranties of the parties set forth in the Operative
Documents and (ii) certificates delivered to us by the management of U.S. Bank,
and have assumed, with your permission, without independent inquiry, the
accuracy of those representations, warranties and certificates.
We have examined the following documents to which the Trust is a party,
each of which is dated the date hereof, unless otherwise noted:
(i) the Trust Agreement;
(ii) the Placement Agreement;
(iii) the Subscription Agreements;
(iv) the Certificate of Common Securities;
(v) the Certificate of Capital Securities;
(vi) the Guarantee Agreement;
(vii) the Certificate of Trust filed with the
Secretary of State of the State of
Connecticut dated June 13, 2003; and
B-2-1
(viii) a Certificate of Legal Existence for the
Trust obtained from the Secretary of State
of the State of Connecticut dated June 16,
2003 (the "Certificate of Legal Existence").
The documents referenced in subparagraphs (i) through (vii) above are
hereinafter referred to collectively as the "Operative Documents."
We have also examined originals, or copies, certified or otherwise
identified to our satisfaction, of such other corporate and public records and
agreements, instruments, certificates and other documents as we have deemed
necessary or appropriate for the purposes of rendering this opinion. For
purposes of our opinion rendered in paragraph 1 below, with respect to the legal
existence of the Trust, our opinion relies entirely upon and is limited by the
Certificate of Legal Existence, which is attached hereto as Exhibit A.
We have assumed, with your permission, the genuineness of all
signatures (other than those on behalf of U.S. Bank, the Guarantee Trustee,
Indenture Trustee, Institutional Trustee and the Trust), the conformity of the
originals of all documents reviewed by us as copies, the authenticity and
completeness of all original documents reviewed by us in original or copy form
and the legal competence of each individual executing any document.
When an opinion set forth below is given to the best of our knowledge,
or to our knowledge, or with reference to matters of which we are aware or which
are known to us, or with another similar qualification, the relevant knowledge
or awareness is limited to the actual knowledge or awareness of the individual
lawyers in the firm who have participated directly and substantively in the
specific transactions to which this opinion relates and without any special or
additional investigation undertaken for the purposes of this opinion except as
indicated herein.
For the purposes of this opinion we have made such examination of law
as we have deemed necessary. The opinions expressed below are limited solely to
the internal substantive laws of the State (as applied by courts located in the
State without regard to choice of law) and we express no opinion as to the laws
of any other jurisdiction. To the extent to which this opinion deals with
matters governed by or relating to the laws of any other state or jurisdiction,
we have assumed, with your permission, that the Operative Documents are governed
by the internal substantive laws of the State.
We express no opinion as to (i) the effect of suretyship defenses, or
defenses in the nature thereof, with respect to the obligations of any
applicable guarantor, joint obligor, surety, accommodation party, or other
secondary obligor or any provisions of the Trust Agreement with respect to
indemnification or contribution and (ii) the accuracy or completeness of any
exhibits or schedules to the Operative Documents. No opinion is given herein as
to the choice of law or internal substantive rules of law that any court or
other tribunal may apply to the transactions contemplated by the Operative
Documents. No opinion is expressed herein as to the application or effect of
federal securities laws or as to the securities or so-called "Blue Sky" laws of
Connecticut or of any other state or other jurisdiction.
Our opinion, with your permission, is further subject to the following
exceptions, qualifications and assumptions:
(a) We have assumed without any independent investigation that
(i) each party to the Operative Documents, other than U.S. Bank, the
Guarantee Trustee, Indenture Trustee, Institutional Trustee and the
Trust, as applicable, at all times relevant thereto, is validly
existing and in good standing under the laws of the jurisdiction in
which it is organized, and is qualified to do business and in good
standing under the laws of each jurisdiction where such qualification
is required generally or necessary in order for such party to enforce
its rights under such Operative
B-2-2
Documents, (ii) each party to the Operative Documents, at all times
relevant thereto, had and has the full power, authority and legal right
under its certificate of incorporation, partnership agreement, by-laws,
and other governing organizational documents, and the applicable
corporate, partnership, or other enterprise legislation and other
applicable laws, as the case may be (other than U.S. Bank, the
Guarantee Trustee, Indenture Trustee, Institutional Trustee or the
Trust) to execute, deliver and to perform its obligations under, the
Operative Documents, and (iii) each party to the Operative Documents
other than U.S. Bank, the Guarantee Trustee, Indenture Trustee,
Institutional Trustee or the Trust has duly executed and delivered each
of such agreements and instruments to which it is a party and that the
execution and delivery of such agreements and instruments and the
transactions contemplated thereby have been duly authorized by proper
corporate or other organizational proceedings as to each such party.
(b) We have assumed without any independent investigation (i)
that the Institutional Trustee, the Sponsor and the Administrators have
received the agreed to and stated consideration for the incurrence of
the obligations applicable to it under the Trust Agreement and each of
the other Operative Documents, (ii) that each of the Operative
Documents (other than the Trust Agreement) is a valid, binding and
enforceable obligation of each party thereto other than the Trust, U.S.
Bank and the Institutional Trustee, as applicable; and, for the
purposes of this opinion letter, we herein also assume that each of the
Operative Documents (other than the Trust Agreement) constitutes a
valid, binding and enforceable obligation of U.S. Bank, the Guarantee
Trustee and the Indenture Trustee, as applicable under Connecticut and
federal law (as to which such matters we are delivering to you a
separate opinion letter on this date, which is subject to the
assumptions, qualifications and limitations set forth therein).
(c) The enforcement of any obligations of U.S. Bank, the
Sponsor and the Administrators, as applicable, under the Trust
Agreement and the obligations of the Trust under the other Operative
Documents may be limited by the receivership, conservatorship and
supervisory powers of depository institution regulatory agencies
generally, as well as by bankruptcy, insolvency, reorganization,
moratorium, marshaling or other laws and rules of law affecting the
enforcement generally of creditors' rights and remedies (including such
as may deny giving effect to waivers of debtors' or guarantors'
rights); and we express no opinion as to the status under any
fraudulent conveyance laws or fraudulent transfer laws of any of the
obligations of U.S. Bank, the Sponsor, the Administrators or the Trust
under any of the Operative Documents.
(d) We express no opinion as to the enforceability of any
particular provision of the Trust Agreement or the other Operative
Documents relating to remedies after default.
(e) We express no opinion as the availability of any
specific or equitable relief of any kind.
(f) The enforcement of any rights may in all cases be subject
to an implied duty of good faith and fair dealing and to general
principles of equity (regardless of whether such enforceability is
considered in a proceeding at law or in equity).
(g) We express no opinion as to the enforceability of any
particular provision of any of the Operative Documents relating to (i)
waivers of rights to object to jurisdiction or venue, or consents to
jurisdiction or venue, (ii) waivers of rights to (or methods of)
service of process, or rights to trial by jury, or other rights or
benefits bestowed by operation of law, (iii) waivers of any applicable
defenses, setoffs, recoupments, or counterclaims, (iv) waivers or
variations of provisions which are not capable of waiver or variation
under Sections 1-102, 9-602, 9-603 or other provisions of the Uniform
Commercial Code ("UCC") of the State, (v) the grant of powers
B-2-3
of attorney to any person or entity, or (vi) exculpation or exoneration
clauses, indemnity clauses, and clauses relating to releases or waivers
of unmatured claims or rights.
(h) We have made no examination of, and no opinion is given
herein as to the Trustee's or the Trust's title to or other ownership
rights in, or the existence of any liens, charges or encumbrances on,
or adverse claims against, any asset or property held by the
Institutional Trustee or the Trust. We express no opinion as to the
creation, validity, attachment, perfection or priority of any mortgage,
security interest or lien in any asset or property held by the
Institutional Trustee or the Trust.
(i) We express no opinion as to the effect of events
occurring, circumstances arising, or changes of law becoming effective
or occurring, after the date hereof on the matters addressed in this
opinion letter, and we assume no responsibility to inform you of
additional or changed facts, or changes in law, of which we may become
aware.
(j) We express no opinion as to any requirement that any party
to the Operative Documents (or any other persons or entities
purportedly entitled to the benefits thereof) qualify or register to do
business in any jurisdiction in order to be able to enforce its rights
thereunder or obtain the benefits thereof.
Based upon the foregoing and subject to the limitations and
qualifications set forth herein, we are of the opinion that:
1. The Trust has been duly formed and is validly existing as a
statutory trust under the Connecticut Statutory Trust Act, Chapter 615 of Title
34 of the Connecticut General Statutes, Section 500, et seq. (the "Act").
2. The Trust Agreement constitutes a valid and binding obligation of
U.S. Bank and the Institutional Trustee enforceable against U.S. Bank and the
Institutional Trustee in accordance with the terms thereof.
3. The Trust Agreement constitutes a valid and binding obligation of
the Sponsor and the Administrators, enforceable against the Sponsor and the
Administrators in accordance with its terms.
4. The Trust has the requisite trust power and authority to (a) execute
and deliver, and to perform its obligations under, the Operative Documents, and
(b) perform its obligations under such Operative Documents.
5. Each of the Operative Documents to which the Trust is a party
constitutes a valid and binding obligation of the Trust, enforceable against the
Trust in accordance with the terms thereof.
6. The Capital Securities have been duly authorized by the Trust under
the Trust Agreement, and the Capital Securities, when duly executed and
delivered to the Holders in accordance with the Trust Agreement, the Placement
Agreement and the Subscription Agreements, will be validly issued, fully paid
and nonassessable and will evidence undivided beneficial interests in the assets
of the Trust and will be entitled to the benefits of the Trust Agreement.
7. The Common Securities have been duly authorized by the Trust
Agreement, and the Common Securities, when duly executed and delivered to the
Company in accordance with the Trust Agreement, the Placement Agreement and the
Subscription Agreements and delivered and paid for in accordance therewith, will
be validly issued, fully paid and nonassessable (subject to Section 9.1(b) of
the Trust Agreement which provides that the Holders of Common Securities are
liable for debts and
B-2-4
obligations of the Trust to the extent such debts and obligations are not
satisfied out of the Trust's assets) and will evidence undivided beneficial
interests in the assets of the Trust and will be entitled to the benefits of the
Trust Agreement.
8. Neither the execution, delivery or performance by the Trust of the
Operative Documents, the consummation by the Trust of the transactions
contemplated thereby, nor compliance by the Trust with any of the terms and
provisions thereof, (a) violates the Trust Agreement, or, to the best of our
knowledge, contravenes or will contravene any provision of, or constitutes a
default under, or results in any breach of, or results in the creation of any
lien (other than as permitted under the Operative Documents) upon property of
the Trust under, any indenture, mortgage, chattel mortgage, deed of trust,
conditional sales contract, bank loan or credit agreement, license or other
agreement or instrument, in each case known to us, to which it is a party or by
which it is bound or (b) violates any applicable State law governing the Trust,
or, to the best of our knowledge, any judgment or order of any court or other
tribunal, in each case known to us, applicable to or binding on it.
9. No consent, approval, order or authorization of, giving of notice
to, or registration with, or taking of any other action in respect of, any State
governmental authority regulating the Trust is required for the execution,
delivery, validity or performance of, or the carrying out by, the Trust of any
of the transactions contemplated by the Operative Documents, other than any such
consent, approval, order, authorization, registration, notice or action as has
been duly obtained, given or taken.
10. The Holders, as the beneficial holders of the Capital Securities,
will be entitled to the same limitation of personal liability extended to
shareholders of domestic corporations organized under the laws of the State.
11. Under the Trust Agreement, the issuance of the Capital Securities
is not subject to preemptive rights.
12. Assuming that the Trust will not be taxable as a corporation for
federal income tax purposes, but rather will be classified for such purposes as
a grantor trust under Subpart E, Part I of Subchapter J of the Internal Revenue
Code of 1986, as amended, the Trust will not be subject to any tax, fee or other
government charge under the laws of the State of Connecticut or any political
subdivision thereof.
This opinion is rendered solely for the benefit of those institutions
listed on Schedule I hereto and their successors and assigns in connection with
the transactions contemplated by the Operative Documents and may not be used or
relied upon by any other person or for any other purpose.
Very truly yours,
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP
B-2-5
SCHEDULE I
U. S. Bank National Association
FTN Financial Capital Markets
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, Inc.
First Tennessee Bank National Association
Preferred Term Securities X, Ltd.
Preferred Term Securities X, Inc.
▇▇▇▇▇, Rice & ▇▇▇▇▇▇▇▇, ▇.▇.
Citizens Banking Corporation
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ PLLC
B-2-6
EXHIBIT A TO EXHIBIT B-2
CERTIFICATE OF LEGAL EXISTENCE
(See Tab No. 6)
▇-▇-▇
▇▇▇▇▇▇▇ ▇-▇
FORM OF TAX COUNSEL OPINION
Citizens Banking Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Citizens Michigan Statutory Trust I
c/o Citizens Banking Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
FTN Financial Capital Markets
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, Inc.
▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
We have acted as special tax counsel to Citizens Banking Corporation
and to Citizens Michigan Statutory Trust I in connection with the proposed
issuance of (i) Floating Rate Capital Securities, liquidation amount $1,000.00
per Capital Security (the "Capital Securities") of Citizens Michigan Statutory
Trust I, a statutory business trust created under the laws of Connecticut (the
"Trust"), pursuant to the terms of the Amended and Restated Declaration of Trust
dated as of the date hereof by Citizens Banking Corporation, a Michigan
corporation (the "Company"), U.S. Bank National Association, as institutional
trustee, and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, as
Administrators (the "Trust Agreement"), (ii) Junior Subordinated Deferrable
Interest Debentures (the "Corresponding Debentures") of the Company issued
pursuant to the terms of an Indenture dated as of the date hereof from the
Company to U.S. Bank National Association, as trustee (the "Indenture"), which
Debentures are to be sold by the Company to the Trust, and (iii) the Guarantee
Agreement of the Company with respect to the Capital Securities dated as of the
date hereof (the "Guarantee") between the Company and U.S. Bank National
Association, as guarantee trustee. The portion of the Capital Securities and the
Corresponding Debentures to be purchased by Preferred Term Securities X, Ltd.
are to be issued as contemplated by the Offering Circular (the "Offering
Circular") dated June 16, 2003 prepared by Preferred Term Securities X, Ltd., an
entity formed under the Companies Law of the Cayman Islands, and Preferred Term
Securities X, Inc., a Delaware corporation.
We have examined originals or copies, certified or otherwise identified
to our satisfaction, of documents, corporate records and other instruments as we
have deemed necessary or appropriate for purposes of this opinion including (i)
the Offering Circular, (ii) the Indenture, (iii) the form of the Corresponding
Debentures attached as an exhibit to the Indenture, (iv) the Trust Agreement,
(v) the Guarantee, and (vi) the form of Capital Securities Certificate attached
as an exhibit to the Trust Agreement (collectively the "Documents").
Furthermore, we have relied upon certain representations made by the Company and
upon the opinion of ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP as to certain matters of Connecticut
law. In such examination, we have assumed the authenticity of all documents
submitted to
B-3-1
us as originals, the conformity to original documents of all documents submitted
to us as certified or photostatic copies, the authenticity of the originals of
such latter documents, the genuineness of all signatures and the correctness of
all representations made therein. We have further assumed that there are no
agreements or understandings contemplated therein other than those contained in
the Documents.
Based upon the foregoing, and assuming (i) that the final Documents
will be substantially identical to the forms examined, (ii) full compliance with
all the terms of the final Documents, and (iii) the accuracy of representations
made by the Company and delivered to us, we are of the opinion that:
(a) The Corresponding Debentures will be classified as
indebtedness of the Company for U.S. federal income tax
purposes.
(b) The Trust will be characterized as a grantor trust and not as
an association taxable as a corporation for U.S. federal
income tax purposes.
The opinions expressed above are based on existing provisions of the
Internal Revenue Code of 1986, as amended (the "Code"), existing Treasury
regulations, published interpretations by the Internal Revenue Service of the
Code and such Treasury regulations, and existing court decisions, any of which
could be changed at any time. Any such changes may or may not be retroactively
applied, and may result in federal income tax consequences that differ from
those reflected in the opinions set forth above. We note that there is no
authority directly on point dealing with securities such as the Capital
Securities or with transactions of the type described herein, and that the
authorities on which this opinion is based are subject to various
interpretations. Further, you should be aware that opinions of counsel have no
official status and are not binding on the Internal Revenue Service or the
courts. Accordingly, we can provide no assurance that the interpretation of the
federal income tax laws set forth in our opinions will prevail if challenged by
the IRS in an administrative or judicial proceeding.
We have also assumed that each transaction contemplated herein will be
carried out strictly in accordance with the Documents. Any variance in the facts
may result in Federal income tax consequences that differ from those reflected
in the opinions set forth above.
Additionally, we undertake no obligation to update this opinion in the
event there is either a change in the legal authorities, in the facts (including
the taking of any action by any party to any of the transactions described in
the Documents relating to such transactions) or in the Documents on which this
opinion is based, or an inaccuracy in any of the representations upon which we
have relied in rendering this opinion.
We express no opinion with respect to any matter not specifically
addressed by the foregoing opinions, including state or local tax consequences,
or any federal, state, or local issue not specifically referred to and discussed
above including, without limitation, the effect on the matters covered by this
opinion of the laws of any other jurisdiction.
This letter is delivered for the benefit of the specified addressees
and may not be relied upon by any other person. No portion of this letter may be
quoted or otherwise referred to in any document or delivered to any other person
or entity without the express written consent of ▇▇▇▇▇, Rice & ▇▇▇▇▇▇▇▇, ▇.▇.
This opinion letter is rendered as of the date set forth above.
Very truly yours,
▇▇▇▇▇, RICE & ▇▇▇▇▇▇▇▇, ▇.▇.
B-3-2
▇▇▇▇▇, Rice & ▇▇▇▇▇▇▇▇, ▇.▇.
▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
RE: REPRESENTATIONS CONCERNING THE ISSUANCE OF FLOATING RATE
JUNIOR SUBORDINATED DEFERRABLE INTEREST DEBENTURES (THE
"DEBENTURES") TO CITIZENS MICHIGAN STATUTORY TRUST I (THE
"TRUST") AND SALE OF TRUST SECURITIES (THE "TRUST SECURITIES")
OF THE TRUST
Ladies and Gentlemen:
In accordance with your request, Citizens Banking Corporation (the
"Company") hereby makes the following representations in connection with the
preparation of your opinion letter as to the United States federal income tax
consequences of the issuance by the Company of the Debentures to the Trust and
the sale of the Trust Securities.
Company hereby represents that:
1. The sole assets of the Trust will be the Debentures, any interest
paid on the Debentures to the extent not distributed, proceeds of the
Debentures, or any of the foregoing.
2. The Company intends to use the net proceeds from the sale of the
Debentures for general corporate purposes.
3. The Trust was not formed to conduct any trade or business and is not
authorized to conduct any trade or business. The Trust exists for the exclusive
purposes of (i) issuing and selling the Trust Securities, (ii) using the
proceeds from the sale of Trust Securities to acquire the Debentures, and (iii)
engaging only in activities necessary or incidental thereto.
4. The Trust was formed to facilitate direct investment in the assets
of the Trust, and the existence of multiple classes of ownership is incidental
to that purpose. There is no intent to provide holders of such interests in the
Trust with diverse interests in the assets of the Trust.
5. The Company intends to create a debtor-creditor relationship between
the Company, as debtor, and the Trust, as a creditor, upon the issuance and sale
of the Debentures to the Trust by the Company. The Company will (i) record and
at all times continue to reflect the Debentures as indebtedness on its separate
books and records for financial accounting purposes, and (ii) treat the
Debentures as indebtedness for all United States tax purposes.
6. During each year, the Trust's income will consist solely of payments
made by the Company with respect to the Debentures. Such payments will not be
derived from the active conduct of a financial business by the Trust. Both the
Company's obligation to make such payments and the measurement of the amounts
payable by the Company are defined by the terms of the Debentures. Neither the
Company's obligation to make such payments nor the measurement of the amounts
payable by the Company is dependent on income or profits of Company or any
affiliate of the Company.
7. The Company expects that it will be able to make, and will make,
timely payment of amounts identified by the Debentures as principal and interest
in accordance with the terms of the Debentures with available capital or
accumulated earnings.
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8. The Company presently has no intention to defer interest payments on
the Debentures, and it considers the likelihood of such a deferral to be remote
because, if it were to exercise its right to defer payments of interest with
respect to the Debentures, it would not be permitted to declare or pay any
dividends or distributions on, or redeem, purchase, acquire, or make a
liquidation payment with respect to, any capital stock of the Company or any
affiliate of the Company (other than payments of dividends or distributions to
the Company) or make any payment of principal of or interest or premium, if any,
on or repay, repurchase, or redeem any debt securities of the Company or any
affiliate of the Company that rank pari passu in all respects with or junior in
interest to the Debentures, in each case subject to limited exceptions stated in
Section 2.11 of the Indenture to be entered into in connection with the issuance
of the Debentures.
9. Immediately after the issuance of the Debentures, the debt-to-equity
ratio of the Company (as determined for financial accounting purposes, but
excluding deposit liabilities from the Company's debt) will be within standard
depository institution industry norms and, in any event, will be no higher than
four to one (4 : 1).
10. To the best of our knowledge, the Company is currently in
compliance with all federal, state, and local capital requirements, except to
the extent that failure to comply with any such requirements would not have a
material adverse effect on the Company and its affiliates.
11. The Company will not issue any class of common stock or preferred
stock senior to the Debentures during their term.
12. The Internal Revenue Service has not challenged the interest
deduction on any class of the Company's subordinated debt in the last ten (10)
years on the basis that such debt constitutes equity for federal income tax
purposes.
The above representations are accurate as of the date below and will
continue to be accurate through the issuance of the Trust Securities, unless you
are otherwise notified by us in writing. The undersigned understands that you
will rely on the foregoing in connection with rendering certain legal opinions,
and possesses the authority to make the representations set forth in this letter
on behalf of the Company.
Very truly yours,
CITIZENS BANKING CORPORATION
Date: [__________], 2003 By: _____________________________
Title: _____________________________
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EXHIBIT C
SIGNIFICANT SUBSIDIARIES
Citizens Bank.
F&M Bancorporation, Inc.
F&M Bank - Wisconsin
C-1
EXHIBIT D
FORM OF QUARTERLY REPORT
The Bank of New York
Collateralized Debt Obligation Group
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
CDO Relationship Manager
BANK HOLDING COMPANY
As of [March 31, June 30, September 30 or December 31], 20__
Tier 1 to Risk Weighted Assets _________%
Ratio of Double Leverage _________%
Non-Performing Assets to Loans and OREO _________%
Ratio of Reserves to Non-Performing Loans _________%
Ratio of Net Charge-Offs to Loans _________%
Return on Average Assets (annualized)** _________%
Net Interest Margin (annualized)** _________%
Efficiency Ratio _________%
Ratio of Loans to Assets _________%
Ratio of Loans to Deposits _________%
Total Assets $__________
Year to Date Income $__________
---------------
*A table describing the quarterly report calculation procedures is provided on
page D-2
** To annualize Return on Average Assets and Net Interest Margin do the
following:
1st Quarter-multiply income statement item by 4, then divide by balance sheet
item(s)
2nd Quarter-multiply income statement item by 2,then divide by balance sheet
item(s)
3rd Quarter-divide income statement item by 3, then multiply by 4, then divide
by balance sheet item(s)
4th Quarter-should already be an annual number
NO ADJUSTMENT SHOULD BE MADE TO BALANCE SHEET ITEMS
D-1
Financial Definitions
REPORT ITEM CORRESPONDING FRY-9C OR LP LINE ITEMS WITH LINE
ITEM CORRESPONDING SCHEDULES DESCRIPTION OF CALCULATION
----------------------- -------------------------------------------------- ---------------------------------------------------
"Tier 1 Capital" to BHCK7206 Tier 1 Risk Ratio: Core Capital (Tier 1)/
Risk Weighted Assets Schedule HC-R Risk-Adjusted Assets
Ratio of Double (BHCP0365)/(BHCP3210) Total equity investments in subsidiaries divided
Leverage Schedule PC in the LP by the total equity capital. This field is
calculated at the parent company level.
"Subsidiaries" include bank, bank holding company,
and nonbank subsidiaries.
Non-Performing Assets (BHCK5525-BHCK3506+BHCK5526- Total Nonperforming Assets (NPLs+Foreclosed Real
to Loans and OREO BHCK3507+BHCK2744)/(BHCK2122+BHCK2774) Estate Other Nonaccrual & Repossessed Assets)/
Schedules HC-C, HC-M & HC-N Total Loans + Foreclosed Real Estate
Ratio of Reserves to (BHCK3123+BHCK3128)/(BHCK5525- Total Loan Loss and Allocated Transfer Risk
Non-Performing Loans BHCK3506+BHCK5526-BHCK3507) Reserves/ Total Nonperforming Loans (Nonaccrual +
Schedules HC & HC-N Restructured)
Ratio of Net (BHCK4635-BHCK4605)/(BHCK3516) Net charge offs for the period as a percentage of
Charge-Offs to Loans Schedules HI-B & HC-K average loans.
Return on Assets (BHCK4340/BHCK3368) Net Income as a percentage of Assets.
Schedules HI & HC-K
Net Interest Margin (BHCK4519)/(BHCK3515+BHCK3365+BHCK (Net Interest Income Fully Taxable Equivalent, if
3516+BHCK3401+BHCKB985) available / Average Earning Assets)
Schedules HI Memorandum and HC-K
Efficiency Ratio (BHCK4093)/(BHCK4519+BHCK4079) (Noninterest Expense)/ (Net Interest Income
Schedule HI Fully Taxable Equivalent, if available, plus
Noninterest Income)
Ratio of Loans to (BHCKB528+BHCK5369)/(BHCK2170) Total Loans & Leases (Net of Unearned Income &
Assets Schedule ▇▇ ▇▇▇▇▇ of Reserve)/ Total Assets
Ratio of Loans to (BHCKB528+BHCK5369)/(BHDM6631+BHD Total Loans & Leases (Net of Unearned Income &
Deposits M6636+BHFN6631+BHFN6636) Gross of Reserve)/ Total Deposits (Includes
Schedule HC Domestic and Foreign Deposits)
Total Assets (BHCK2170) The sum of total assets. Includes cash and
Schedule HC balances due from depository institutions;
securities; federal funds sold and securities
purchased under agreements to resell; loans and lease
financing receivables; trading assets; premises and
fixed assets; other real estate owned; investments in
unconsolidated subsidiaries and associated companies;
customer's liability on acceptances outstanding;
intangible assets; and other assets.
Net Income (BHCK4300) The sum of income (loss) before extraordinary items
Schedule HI and other adjustments and extraordinary items; and
other adjustments, net of income taxes.
D-2