Exhibit 4.5
$150,000,000
▇▇▇▇▇▇ FINANCIAL, INC.
1,500,000 Shares
FIXED RATE NONCUMULATIVE PERPETUAL SENIOR PREFERRED STOCK, SERIES B
PURCHASE AGREEMENT
June 11, 1997
▇▇▇▇▇▇ Brothers Inc.
Chase Securities Inc.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇
& ▇▇▇▇▇ Incorporated
c/▇ ▇▇▇▇▇▇ Brothers Inc.
Three World Financial Center
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
▇▇▇▇▇▇ Financial, Inc., a Delaware corporation (the "Company"), proposes to
sell to you (collectively, the "Initial Purchasers") 1,500,000 shares of the
Company's Fixed Rate Noncumulative Perpetual Senior Preferred Stock, Series B
(liquidation preference $100.00 per share) (the "Securities"), bearing cash
dividends that are payable quarterly, if declared, at a rate of 6.687% of the
liquidation preference of the Securities, or $6.687 per share, per annum.
The Securities will be offered without being registered under the
Securities Act of 1933, as amended (the "Securities Act"), in reliance on
exemptions therefrom.
In connection with the sale of the Securities, the Company will prepare a
final offering memorandum (including the documents incorporated by reference
therein, the "Memorandum") setting forth or including a description of the terms
of the Securities, the terms of the offering, a description of the Company and
any material developments relating to the Company occurring after the date of
the most recent financial statements included or incorporated by reference
therein.
1. Representations, Warranties and Agreements of the Company. The Company
represents and warrants to, and agrees with each of the Initial Purchasers that,
as of the date hereof:
(a) The Memorandum will not contain any untrue statement of a material
fact or omit to state a material fact necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, except that the representations and warranties set forth in
this Section 1(a) do not apply to statements or omissions in the Memorandum
based upon information furnished to the Company in writing by or on behalf
of any Initial Purchaser through you expressly for use therein.
Reference herein to the Memorandum shall be deemed to refer to and include
any document filed by the Company under the Securities Exchange Act of
1934, as amended (the "Exchange Act"), which is incorporated in the
Memorandum by reference.
(b) It is not required by applicable law or regulation in connection
with the offer, sale and delivery of the Securities to you in the manner
contemplated by this Agreement to register the Securities under the
Securities Act.
(c) The Company and each of its subsidiaries (as defined in Section 14
hereof) have been duly incorporated and are validly existing as
corporations in good standing under the laws of their respective
jurisdictions of incorporation, are duly qualified to do business and are
in good standing as foreign corporations in each jurisdiction in which
their respective ownership or lease of property or the conduct of their
respective businesses requires such qualification, except where the failure
to be so qualified could not reasonably be expected to have a material
adverse effect on their businesses or properties, and have all power and
authority necessary to own or hold their respective properties and to
conduct the businesses in which they are engaged.
(d) The Certificate of Designation, Preferences and Rights relating to
the Securities (the "Certificate of Designation") has been duly authorized
and, when filed by the Company with the Secretary of State of the State of
Delaware, will be duly executed and in full force and effect and will
conform to all statements relating thereto in the Memorandum.
(e) This Agreement has been duly authorized, executed and delivered by
the Company and the Registration Rights Agreement relating to the
Securities to be entered into by and among the Company and the Initial
Purchasers (the "Registration Rights Agreement") has been duly authorized
and will be duly executed and delivered by the Company.
(f) The Company has an authorized capitalization as set forth, or
incorporated by reference, in the Memorandum. All of the issued shares of
capital stock of the Company have been duly authorized, validly issued,
fully paid and non-assessable and conform to the descriptions thereof
contained, or incorporated by reference, in the Memorandum; the Securities,
upon issuance and delivery and payment therefor in the manner described
herein, and the Exchange Securities (as defined in the Registration Rights
Agreement), upon issuance and delivery in the manner described in the
Registration Rights Agreement, will be duly authorized, validly issued,
fully paid and non-assessable and will conform to the descriptions thereof
contained in the Memorandum; and all of the issued shares of capital stock
of each subsidiary of the Company have been duly and validly authorized and
issued and are fully paid and non-assessable and, except for ▇▇▇▇▇▇
International Group, Inc. (the ownership of which is as described in the
Memorandum) and any subsidiaries that would not be considered "significant
subsidiaries" under Rule 1-02(w) of Regulation S-X promulgated by the
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Securities and Exchange Commission (the "Commission"), are owned directly
or indirectly by the Company, free and clear of all liens, encumbrances,
equities or claims.
(g) The execution, delivery and performance of this Agreement and the
Registration Rights Agreement and the consummation by the Company of the
transactions contemplated herein and therein (the "Company Transactions")
will not conflict with or result in a breach or violation of any of the
terms or provisions of, or constitute a default under, any indenture,
mortgage, deed of trust, loan agreement or other agreement or instrument to
which the Company or any of its subsidiaries is a party or by which the
Company or any of its subsidiaries is bound or to which any of the
properties or assets of the Company or any of its subsidiaries is subject,
nor will such actions result in any violation of the provisions of the
charter or by-laws of the Company or any of its subsidiaries or any statute
or order, rule or regulation of any court or governmental agency or body
having jurisdiction over the Company, any of its subsidiaries or any of
their properties or assets; and except for such consents, approvals,
authorizations, registrations or qualifications as may be required under
applicable state securities laws in connection with the purchase and
distribution of the Securities by the Initial Purchasers and such consents,
approvals, authorizations, registrations or qualifications as may be
required under applicable federal and state securities laws in connection
with the issuance of the Exchange Securities, no consent, approval,
authorization or order of, or filing or registration with, any such court
or governmental agency or body is required for the Company Transactions.
(h) Neither the Company nor any of its subsidiaries has sustained,
since the date of the latest quarterly financial statements included, or
incorporated by reference, in the Memorandum, any material loss or
interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor dispute or
court or governmental action, order or decree, otherwise than as set forth
or contemplated in the Memorandum; and, since such date, there has not been
any change in the capital stock or long-term debt of the Company or any of
its subsidiaries or any material adverse change, or any development
involving a prospective material adverse change, in or affecting the
general affairs, management, financial position, stockholders' equity or
results of operations of the Company and its subsidiaries, otherwise than
as set forth or contemplated in the Memorandum.
(i) The financial statements (including the related notes and
supporting schedules) incorporated by reference in the Memorandum present
fairly the financial condition and results of operations of the entities
purported to be shown thereby, at the dates and for the periods indicated,
and have been prepared in conformity with generally accepted accounting
principles applied on a consistent basis throughout the periods involved.
(j) ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP, who have certified certain financial
statements of the Company, whose report is incorporated by reference in the
Memorandum and who have delivered the initial letter referred to in Section
7(e) hereof, are independent public
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accountants as required by the Securities Act and the rules and regulations
promulgated thereunder (the "Rules and Regulations") during the periods
covered by the financial statements on which they reported contained in the
Memorandum.
(k) There are no legal or governmental proceedings pending to which
the Company or any of its subsidiaries is a party or of which any property
or asset of the Company or any of its subsidiaries is the subject which, if
determined adversely to the Company or any of its subsidiaries, might have
a material adverse effect on the consolidated financial position,
stockholders' equity, results of operations, business or prospects of the
Company and its subsidiaries; and to the best of the Company's knowledge,
no such proceedings are threatened or contemplated by governmental
authorities or threatened by others.
(l) No relationship, direct or indirect, exists between or among the
Company, on the one hand, and the directors, officers, stockholders,
customers or suppliers of the Company, on the other hand, which is required
to be described in the Memorandum, or the documents incorporated therein by
reference, is not so described.
(m) Since the date as of which information is given in the Memorandum
through the date hereof, and except as may otherwise be disclosed in the
Memorandum, the Company has not (i) issued or granted any securities, (ii)
incurred any liability or obligation, direct or contingent, other than
liabilities and obligations which were incurred in the ordinary course of
business, (iii) entered into any transaction not in the ordinary course of
business or (iv) declared or paid any dividend on its capital stock.
(n) Neither the Company nor any of its subsidiaries (i) is in
violation of its charter or by-laws, (ii) is in default in any material
respect, and no event has occurred which, with notice or lapse of time or
both, would constitute such a default, in the due performance or observance
of any term, covenant or condition contained in any material indenture,
mortgage, deed of trust, loan agreement or other agreement or instrument to
which it is a party or by which it is bound or to which any of its
properties or assets is subject or (iii) is in violation in any material
respect of any law, ordinance, governmental rule, regulation or court
decree to which it or its properties or assets may be subject or has failed
to obtain any material license, permit, certificate, franchise or other
governmental authorization or permit necessary to the ownership of its
properties or assets or to the conduct of its business.
(o) Neither the Company nor any of its subsidiaries is an "investment
company" within the meaning of such term under the Investment Company Act
of 1940, as amended, and the rules and regulations of the Commission
thereunder.
(p) Neither the Company nor any of its affiliates (as defined in Rule
501(b) of Regulation D under the Securities Act, an "Affiliate") has
directly, or through any agent, (i) sold, offered for sale, solicited
offers to buy or otherwise negotiated in respect of, any security (as
defined in the Securities Act) which is or will be integrated with the
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sale of the Securities in a manner that would require the registration
under the Securities Act of the Securities or (ii) engaged in any form of
general solicitation or general advertising in connection with the offering
of the Securities (as those terms are used in Regulation D under the
Securities Act), or in any conduct that could constitute a public offering
of the Securities within the meaning of Section 4(2) of the Securities Act.
(q) When the Securities are issued and delivered pursuant to this
Agreement, the Securities will not be of the same class (within the meaning
of Rule 144A(d)(3) under the Securities Act) as any security of the Company
that is listed on a national securities exchange registered under Section 6
of the Exchange Act or that is quoted in a United States automated
interdealer quotation system.
(r) On the Closing Date (as defined herein), the Amended and Restated
Keep Well Agreement, dated as of August 28, 1992 and as thereafter amended
and to be amended prior to the Closing Date (as so amended, the "Amended
Keep Well Agreement"), by and between the Company and The Fuji Bank,
Limited ("Fuji Bank"), will conform to the description thereof in the
Memorandum and will be duly authorized, executed and delivered and will
constitute a valid and legally binding obligation of each of the Company
and Fuji Bank.
2. Purchase of the Securities by the Initial Purchasers. On the basis of
the representations and warranties herein contained, and subject to the terms
and conditions herein set forth, the Company agrees to sell to you, and each of
you, severally and not jointly, agrees to purchase from the Company, the number
of Securities as set forth opposite each Initial Purchaser's name in Schedule I
hereto, at a purchase price equal to 100% of their liquidation preference.
As compensation to the Initial Purchasers for their commitments hereunder,
the Company agrees to pay the Initial Purchasers a commission of 2.0% of the
purchase price of the Securities set forth in Schedule I opposite each Initial
Purchaser's name.
The Company shall not be obligated to deliver any of the Securities, except
upon payment for all of the Securities to be purchased as hereinafter provided.
3. Sale and Resale of the Securities by the Initial Purchasers. You have
advised the Company that you propose to offer the Securities for resale upon the
terms and conditions set forth in this Agreement and in the Memorandum. You
hereby represent and warrant to, and agree with, the Company that you (i) are
purchasing the Securities pursuant to a private sale exempt from registration
under the Securities Act, (ii) will not solicit offers for, or offer or sell,
the Securities by means of any form of general solicitation or general
advertising or in any manner involving a public offering within the meaning of
Section 4(2) of the Securities Act, and (iii) will solicit offers for the
Securities only from, and will offer, sell or deliver the Securities, as part of
your initial offering, only to (A) in the case of offers inside the United
States, (x) persons whom you reasonably believe to be qualified institutional
buyers ("Qualified Institutional Buyers") as defined in Rule 144A under the
Securities Act, as such rule may be amended from
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time to time ("Rule 144A") or, if any such person is buying for one or more
institutional accounts for which such person is acting as fiduciary or agent,
only when such person has represented to you that each such account is a
Qualified Institutional Buyer, to whom notice has been given that such sale or
delivery is being made in reliance on Rule 144A or (y) institutional accredited
investors ("Accredited Investors") as defined in Rule 501(a)(1), (2), (3) or (7)
under Regulation D who execute letters of representation in the form included as
Appendix A to the Memorandum in private sales exempt from registration under the
Securities Act and (B) in the case of offers outside the United States, to
persons other than U.S. persons ("foreign purchasers," which term shall include
dealers or other professional fiduciaries in the United States acting on a
discretionary basis for foreign beneficial owners (other than an estate or
trust)) in compliance with Regulation S under the Securities Act.
4. Delivery of and Payment for the Securities. Payment of the purchase
price for, and delivery of, the Securities shall be made at the offices of
▇▇▇▇▇▇ ▇▇▇▇▇▇ & Zavis, Chicago, Illinois or at such other place as shall be
agreed upon by the Company and you, at 8:30 a.m. (Chicago time), on June 17,
1997 or at such other time or date as you and the Company shall determine (such
date and time of payment and delivery being herein called the "Closing Date").
On the Closing Date, payment shall be made to the Company in same-day funds by
wire transfer to such account or accounts as the Company shall specify prior to
the Closing Date or by such means as the parties hereto shall agree prior to the
Closing Date against delivery to you of one or more global security certificates
(the "Global Securities") and/or additional certificated securities evidencing
the Securities. Upon delivery, in the case of a Global Security, the Securities
shall be registered in the name of Cede & Co. as nominee of The Depository Trust
Company ("DTC") and, in the other cases, in such names and in such denominations
as the Initial Purchasers shall request in writing not less than two full
business days prior to the Closing Date. For the purpose of expediting the
checking and packaging of the Global Securities and/or other certificates
evidencing the Securities, the Company agrees to make such certificates
available for inspection at least 24 hours prior to the Closing Date.
5. Further Agreements of the Company. The Company agrees:
(a) To furnish to you, without charge, as many copies of the
Memorandum and any supplements and amendments thereto as you may reasonably
request.
(b) Prior to making any amendment or supplement to the Memorandum, the
Company shall furnish a copy thereof to the Initial Purchasers and counsel
to the Initial Purchasers and will not effect any such amendment or
supplement to which the Initial Purchasers shall reasonably object by
notice to the Company after a reasonable period to review, which shall not
in any case be longer than five business days after receipt of such copy.
(c) If, at any time prior to completion of the distribution of the
Securities by you to purchasers, any event shall occur or condition exist
as a result of which it is necessary, in the opinion of counsel for you or
counsel for the Company, to amend or supplement the Memorandum in order
that the Memorandum will not include an untrue
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statement of a material fact or omit to state a material fact necessary in
order to make the statements therein not misleading in light of the
circumstances existing at the time it is delivered to a purchaser, or if it
is necessary to amend or supplement the Memorandum to comply with
applicable law, to promptly prepare such amendment or supplement as may be
necessary to correct such untrue statement or omission or so that the
Memorandum, as so amended or supplemented, will comply with applicable law
and to furnish you such number of copies as you may reasonably request.
(d) So long as the Securities are outstanding and are "Restricted
Securities" within the meaning of Rule 144(a)(3) under the Securities Act,
to furnish to holders of the Securities and prospective purchasers of
Securities designated by such holders, upon request of such holders or such
prospective purchasers, the information required to be delivered pursuant
to Rule 144A(d)(4) under the Securities Act.
(e) For a period of five years following the date of the Memorandum,
to furnish to the Initial Purchasers copies of all materials furnished by
the Company to its stockholders and all public reports and all reports and
financial statements furnished by the Company to the principal national
securities exchange upon which any securities of the Company may be listed
pursuant to requirements of or agreements with such exchange or to the
Commission pursuant to the Exchange Act or any rule or regulation of the
Commission thereunder.
(f) Promptly from time to time to take such action as the Initial
Purchasers may reasonably request to qualify the Securities for offering
and sale under the securities laws of such jurisdictions as the Initial
Purchasers may request and to comply with such laws so as to permit the
continuance of sales and dealings therein in such jurisdictions for as long
as may be necessary to complete the distribution of the Securities.
(g) Not to offer, sell, contract to sell or otherwise dispose of any
additional securities of the Company substantially similar to the
Securities or any securities convertible into or exchangeable for or that
represent the right to receive any such similar securities, without the
consent (which consent shall not be unreasonably withheld) of the Initial
Purchasers during the period beginning from the date of this Agreement and
continuing to and including the earlier of (i) the termination of trading
restrictions on the Securities under the Securities Act, as communicated to
the Company by the Initial Purchasers, and (ii) 90 days following the
Closing Date.
(h) To use its best efforts to permit the Securities to be eligible
for clearance and settlement through DTC.
(i) To apply the net proceeds from the sale of the Securities being
sold by the Company as set forth in the Memorandum.
(j) Except following the effectiveness of the Registration Statement
(as defined in the Registration Rights Agreement), not to, and will cause
its Affiliates not to, solicit
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any offer to buy or offer to sell the Securities by means of any form of
general solicitation or general advertising (as those terms are used in
Regulation D under the Securities Act) or in any manner involving a public
offering within the meaning of Section 4(2) of the Securities Act.
(k) Not to, and will cause its Affiliates not to, sell, offer for sale
or solicit offers to buy or otherwise negotiate in respect of any security
(as defined in the Securities Act) in a transaction that could be
integrated with the sale of the Securities in a manner that would require
the registration under the Securities Act of the Securities.
(l) To take such steps as shall be necessary to ensure that neither
the Company nor any subsidiary of the Company shall become an "investment
company" within the meaning of such term under the Investment Company Act
of 1940, as amended, and the rules and regulations of the Commission
thereunder.
6. Expenses. The Company agrees to pay (a) the costs incident to the
authorization, issuance, sale and delivery of the Securities and any taxes
payable in that connection; (b) the costs incident to the preparation and
printing of the Memorandum and any amendments or supplements thereto; (c) the
costs of distributing the Memorandum and any amendments or supplements thereto;
(d) the fees and expenses of qualifying the Securities under the securities laws
of the several jurisdictions as provided in Section 5(f) hereof and of
preparing, printing and distributing a Blue Sky Memorandum (including related
fees and expenses of counsel to the Initial Purchasers); (e) any fees charged by
securities rating services for rating the Securities; and (f) all other costs
and expenses incident to the performance of the obligations of the Company.
7. Conditions to the Initial Purchasers' Obligations. The respective
obligations of the Initial Purchasers hereunder are subject to the accuracy,
when made and on the Closing Date, of the representations and warranties of the
Company contained herein, to the performance by the Company of its obligations
hereunder, and to each of the following additional terms and conditions:
(a) No Initial Purchaser shall have discovered and disclosed to the
Company on or prior to the Closing Date that the Memorandum or any
amendment or supplement thereto contains any untrue statement of a fact
which, in the opinion of ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇, counsel for the Initial
Purchasers ("KMZ"), is material or omits to state any fact which, in the
opinion of KMZ, is material and is required to be stated therein or is
necessary to made the statements therein not misleading.
(b) All corporate proceedings and other legal matters incident to the
authorization, form and validity of this Agreement, the Registration Rights
Agreement, the Memorandum, the Amended Keep Well Agreement and all other
legal matters relating to this Agreement and the transactions contemplated
hereby shall be satisfactory in all respects to KMZ, and the Company shall
have furnished to KMZ all documents
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and information that KMZ may reasonably request to enable KMZ to pass upon
such matters.
(c) Counsel for the Company shall have furnished to the Initial
Purchasers its written legal opinion addressed to the Initial Purchasers
and dated the Closing Date, in form and substance satisfactory to the
Initial Purchasers, to the effect set forth in Exhibit A hereto and to such
further effect as KMZ may reasonably request.
(d) On or prior to the Closing Date, the Certificate of Designation
shall have been filed with the Secretary of State of the State of Delaware.
(e) You shall have received on the date hereof and the Closing Date a
letter, dated the date hereof and the Closing Date, as the case may be, in
form and substance satisfactory to you, from ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP,
independent public accountants, containing statements and information of
the type ordinarily included in accountants' "comfort letters" to
underwriters with respect to the financial statements and certain financial
information contained or incorporated by reference in the Memorandum as
identified by you.
(f) The Company shall have furnished to the Initial Purchasers a
certificate, dated the Closing Date, of the Chief Financial Officer of the
Company stating that:
(i) The representations, warranties and agreements of the Company
in Section 1 hereof are true and correct as of the Closing Date and
the Company has complied with all its agreements contained herein;
(ii) (A) Neither the Company nor any of its subsidiaries has
sustained since the date of the latest quarterly financial statements
included or incorporated by reference in the Memorandum any material
loss or interference with its business from fire, explosion, flood or
other calamity, whether or not covered by insurance, or from any labor
dispute or court or governmental action, order or decree, otherwise
than as set forth or contemplated in the Memorandum or (B) since such
date there has not been any change in the capital stock or long-term
debt of the Company or any of its subsidiaries or any change, or any
development involving a prospective change, in or affecting the
general affairs, management, financial position, stockholders' equity
or results of operations of the Company and its subsidiaries,
otherwise than as set forth or contemplated in the Memorandum; and
(iii) She has carefully examined the Memorandum and, in her
opinion (A) the Memorandum, as of its date, did not include any untrue
statement of a material fact and did not omit to state any material
fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, and (B)
since the date of the Memorandum, no event has occurred
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which should have been set forth in a supplement or amendment to the
Memorandum.
(g) (i) Neither the Company nor any of its subsidiaries shall have
sustained, since the date of the latest audited financial statements
included or incorporated by reference in the Memorandum, any loss or
interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor dispute or
court or governmental action, order or decree, otherwise than as set forth
or contemplated in the Memorandum or (ii) since such date there shall not
have been any change in the capital stock or long-term debt of the Company
or any of its subsidiaries or any change, or any development involving a
prospective change, in or affecting the general affairs, management,
financial position, stockholders' equity or results of operations of the
Company and its subsidiaries, otherwise than as set forth or contemplated
in the Memorandum, the effect of which, in any such case described in
clause (i) and (ii), is, in the judgment of the Initial Purchasers, so
material and adverse as to make it impracticable or inadvisable to proceed
with the offering or the delivery of the Securities on the terms and in the
manner contemplated in the Memorandum.
(h) Subsequent to the execution and delivery of this Agreement (i) no
downgrading shall have occurred in the rating accorded the Securities or
any other outstanding securities of the Company by any "nationally
recognized statistical rating organization," as that term is defined by the
Commission for purposes of Rule 436(g)(2) of the Rules and Regulations and
(ii) no such organization shall have publicly announced that it has under
surveillance or review, with possible negative implications, its rating of
the Securities.
(i) Subsequent to the execution and delivery of this Agreement there
shall not have occurred any of the following: (i) trading in securities
generally on the New York Stock Exchange or the American Stock Exchange or
in the over-the-counter market, or trading in any securities of the Company
on any exchange or in the over-the-counter market, shall have been
suspended or minimum prices shall have been established on any such
exchange or such market by the Commission, by such exchange or market or by
any other regulatory body or governmental authority having jurisdiction,
(ii) a banking moratorium shall have been declared by Federal or state
authorities, (iii) the United States shall have become engaged in
hostilities, there shall have been an escalation in hostilities involving
the United States or there shall have been a declaration of a national
emergency or war by the United States or (iv) there shall have occurred
such a material adverse change in general economic, political or financial
conditions (or the effect of international conditions on the financial
markets in the United States shall be such) as to make it, in the judgment
of a majority in interest of the Initial Purchasers, impracticable or
inadvisable to proceed with the offering or delivery of the Securities on
the terms and in the manner contemplated in the Memorandum.
(j) The Initial Purchasers shall have received on the date hereof the
Registration Rights Agreement executed by the Company.
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(k) KMZ shall have furnished to the Initial Purchasers their written
legal opinion addressed to the Initial Purchasers and dated the Closing
Date, in form and substance satisfactory to the Initial Purchasers.
All opinions, letters, evidence and certificates mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if they are in form and substance satisfactory to KMZ.
8. Indemnification and Contribution.
(a) The Company shall indemnify and hold harmless each Initial
Purchaser, its officers and employees and each person, if any, who controls
any Initial Purchaser within the meaning of the Securities Act, from and
against any loss, claim, damage or liability, joint or several, or any
action in respect thereof (including, but not limited to, any loss, claim,
damage, liability or action relating to purchases and sales of Securities),
to which such Initial Purchaser, officer, employee or controlling person
may become subject, under the Securities Act or otherwise, insofar as such
loss, claim, damage, liability or action arises out of, or is based upon,
(i) any untrue statement or alleged untrue statement of a material fact
contained (A) in the Memorandum or in any amendment or supplement thereto,
or (B) in any blue sky application or other document prepared or executed
by the Company (or based upon any written information furnished by the
Company) specifically for the purpose of qualifying any or all of the
Securities under the securities laws of any state or other jurisdiction
(any such application, document or information being hereinafter called a
"Blue Sky Application"), or (ii) the omission or alleged omission to state
in the Memorandum or in any amendment or supplement thereto, or in any Blue
Sky Application, any material fact required to be stated therein or
necessary to make the statements therein not misleading and shall reimburse
each Initial Purchaser and each such officer, employee and controlling
person promptly upon demand for any legal or other expenses reasonably
incurred by that Initial Purchaser, officer, employee or controlling person
in connection with investigating or defending or preparing to defend
against any such loss, claim, damage, liability or action as such expenses
are incurred; provided, however, that the Company shall not be liable in
any such case to the extent that any such loss, claim, damage, liability or
action arises out of, or is based upon, any untrue statement or alleged
untrue statement or omission or alleged omission made in the Memorandum or
in any such amendment or supplement, or in any Blue Sky Application in
reliance upon and in conformity with the written information furnished to
the Company by or on behalf of any Initial Purchaser specifically for
inclusion therein and described in Section 8(e) hereof. The foregoing
indemnity agreement is in addition to any liability which the Company may
otherwise have to any Initial Purchaser or to any officer, employee or
controlling person of that Initial Purchaser.
(b) Each Initial Purchaser, severally and not jointly, shall indemnify
and hold harmless the Company, its officers and employees, each of its
directors, and each person, if any, who controls the Company within the
meaning of the Securities Act, from and
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against any loss, claim, damage or liability, joint or several, or any
action in respect thereof, to which the Company, any such director or
officer, or any controlling person may become subject, under the Securities
Act or otherwise, insofar as such loss, claim, damage, liability or action
arises out of, or is based upon, (i) any untrue statement or alleged untrue
statement of a material fact contained (A) in the Memorandum or in any
amendment or supplement thereto, or (B) in any Blue Sky Application or (ii)
the omission or alleged omission to state in the Memorandum or in any
amendment or supplement thereto, or in any Blue Sky Application, any
material fact required to be stated therein or necessary to make the
statements therein not misleading, but in each case only to the extent that
the untrue statement or alleged untrue statement or omission or alleged
omission was made in reliance upon and in conformity with the written
information furnished to the Company by or on behalf of that Initial
Purchaser specifically for inclusion therein and described in Section 8(e)
hereof, and shall reimburse the Company and any such director, officer or
controlling person for any legal or other expenses reasonably incurred by
the Company or any such director, officer or controlling person in
connection with investigating or defending or preparing to defend against
any such loss, claim, damage, liability or action as such expenses are
incurred. The foregoing indemnity agreement is in addition to any
liability which any Initial Purchaser may otherwise have to the Company or
any such director, officer or controlling person.
(c) Promptly after receipt by an indemnified party under this Section
8 of notice of any claim or the commencement of any action, the indemnified
party shall, if a claim in respect thereof is to be made against the
indemnifying party under this Section 8, notify the indemnifying party in
writing of the claim or the commencement of that action; provided, however,
that the failure to notify the indemnifying party shall not relieve it from
any liability which it may have under this Section 8 except to the extent
it has been materially prejudiced by such failure and, provided further,
that the failure to notify the indemnifying party shall not relieve it from
any liability which it may have to an indemnified party otherwise than
under this Section 8. If any such claim or action shall be brought against
an indemnified party, and it shall notify the indemnifying party thereof,
the indemnifying party shall be entitled to participate therein and, to the
extent that it wishes, jointly with any other similarly notified
indemnifying party, to assume the defense thereof with counsel satisfactory
to the indemnified party. After notice from the indemnifying party to the
indemnified party of its election to assume the defense of such claim or
action, the indemnifying party shall not be liable to the indemnified party
under this Section 8 for any legal or other expenses subsequently incurred
by the indemnified party in connection with the defense thereof other than
reasonable costs of investigation; provided, however, that (i) if counsel
for the indemnifying party and counsel designated by the indemnified party
jointly determine that there may be a conflict between the positions of the
indemnifying party and of the indemnified party in conducting the defense
of such claim or action or that there may be legal defenses available to
such indemnified party different from or in addition to those available to
the indemnifying party, then counsel for the indemnified party shall be
entitled to conduct the defense to the extent reasonably determined by such
counsel to be necessary to protect the interests of the indemnified party
or parties, and in that event the fees and expenses of such
-12-
counsel for the indemnified party shall be paid by the Company, and (ii) in
any event, the indemnified party shall be entitled to have counsel chosen
and paid for by such indemnified party participate in, but not conduct, the
defense. Each indemnified party, as a condition of the indemnity
agreements contained in Sections 8(a) and (b) hereof, shall use its best
efforts to cooperate with the indemnifying party in the defense of any such
action or claim. No indemnifying party shall (i) without the prior written
consent of the indemnified parties (which consent shall not be unreasonably
withheld), settle or compromise or consent to the entry of any judgment
with respect to any pending or threatened claim, action, suit or proceeding
in respect of which indemnification or contribution may be sought hereunder
(whether or not the indemnified parties are actual or potential parties to
such claim or action) unless such settlement, compromise or consent
includes an unconditional release of each indemnified party from all
liability arising out of such claim, action, suit or proceeding, or (ii) be
liable for any settlement of any such action effected without its written
consent (which consent shall not be unreasonably withheld), but if settled
with its written consent or if there be a final judgment of the plaintiff
in any such action, the indemnifying party agrees to indemnify and hold
harmless any indemnified party from and against any loss or liability by
reason of such settlement or judgment.
(d) If the indemnification provided for in this Section 8 shall for
any reason be unavailable to or insufficient to hold harmless an
indemnified party under Sections 8(a) or (b) hereof in respect of any loss,
claim, damage or liability, or any action in respect thereof, referred to
therein, then each indemnifying party shall, in lieu of indemnifying such
indemnified party, contribute to the amount paid or payable by such
indemnified party as a result of such loss, claim, damage or liability, or
action in respect thereof, (i) in such proportion as shall be appropriate
to reflect the relative benefits received by the Company, on the one hand,
and the Initial Purchasers, on the other hand, from the offering of the
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 Company, on the one hand, and the Initial
Purchasers, on the other hand, with respect to the statements or omissions
which resulted in such loss, claim, damage or liability, or action in
respect thereof, as well as any other relevant equitable considerations.
The relative benefits received by the Company, on the one hand, and the
Initial Purchasers, on the other hand, with respect to such offering shall
be deemed to be in the same proportion as the total net proceeds from the
offering of the Securities purchased under this Agreement (before deducting
expenses) received by the Company, on the one hand, and the total
underwriting commissions received by the Initial Purchasers with respect to
the Securities purchased under this Agreement, on the other hand, bear to
the total gross proceeds from the offering of the shares of the Securities
under this Agreement. The relative fault shall be determined by reference
to whether the untrue or alleged untrue statement of a material fact or
omission or alleged omission to state a material fact relates to
information supplied by the Company, on the one hand, or the Initial
Purchasers, on the other hand, the intent of the parties and their relative
knowledge, access to information and opportunity to correct or prevent such
statement or omission.
-13-
The Company and the Initial Purchasers agree that it would not be just and
equitable if contributions pursuant to this Section 8(d) were to be
determined by pro rata allocation (even if the Initial Purchasers were
treated as one entity for such purpose) or by any other method of
allocation which does not take into account the equitable considerations
referred to herein. The amount paid or payable by an indemnified party as
a result of the loss, claim, damage or liability, or action in respect
thereof, referred to above in this Section 8(d) shall be deemed to include,
for purposes of this Section 8(d), any legal or other expenses reasonably
incurred by such indemnified party in connection with investigating or
defending any such action or claim. Notwithstanding the provisions of this
Section 8(d), no Initial Purchaser shall be required to contribute any
amount in excess of the amount by which the total price at which the
Securities sold and distributed by it was offered to the purchasers exceeds
the amount of any damages which such Initial Purchaser has otherwise paid
or become liable to pay by reason of any untrue or alleged untrue statement
or omission or alleged omission. No person 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 guilty
of such fraudulent misrepresentation. The Initial Purchasers' obligations
to contribute as provided in this Section 8(d) are several in proportion to
their respective underwriting obligations and not joint.
(e) The Initial Purchasers severally confirm that the statements with
respect to the offering of the Securities set forth in the bottom paragraph
on the cover page, the bottom paragraph on page ii, the penultimate
paragraph on page 33 and the fifth paragraph on page 34 of the Memorandum
are correct and constitute the only information furnished in writing to the
Company by or on behalf of the Initial Purchasers specifically for
inclusion in the Memorandum.
9. Termination. The obligations of the Initial Purchasers hereunder may
be terminated by them by notice given to and received by the Company prior to
delivery of and payment for the Securities if, prior to that time, any of the
events described in Sections 7(g), (h) or (i) hereof shall have occurred or if
the Initial Purchasers shall decline to purchase the Securities for any reason
permitted under this Agreement.
10. Reimbursement of Initial Purchasers' Expenses. If (a) the Company
shall fail to tender the Securities for delivery to the Initial Purchasers for
any reason, or (b) the Initial Purchasers shall decline to purchase the
Securities for any reason permitted under this Agreement, the Company shall
reimburse the Initial Purchasers for the reasonable fees and expenses of their
counsel and for such other out-of-pocket expenses as shall have been incurred by
them in connection with this Agreement and the proposed purchase of the
Securities, and upon demand the Company shall pay the full amount thereof to the
Initial Purchasers.
11. Notices, etc. All statements, requests, notices and agreements
hereunder shall be in writing, and:
-14-
(a) if to the Initial Purchasers, shall be delivered or sent by mail
or facsimile transmission to ▇▇▇▇▇▇ Brothers Inc., Three World Financial
Center, New York, New York 10285, Attention: Syndicate Department (Fax:
▇▇▇-▇▇▇-▇▇▇▇);
(b) if to the Company, shall be delivered or sent by mail or facsimile
transmission to the address of the Company set forth in the Memorandum,
Attention: Treasurer (Fax: ▇▇▇-▇▇▇-▇▇▇▇), with a copy to Corporate Legal
Services (Fax: ▇▇▇-▇▇▇-▇▇▇▇).
Any such statements, requests, notices or agreements shall take effect at
the time of receipt thereof. The Company shall be entitled to act and rely upon
any request, consent, notice or agreement given or made on behalf of the Initial
Purchasers by ▇▇▇▇▇▇ Brothers Inc.
12. Persons Entitled to Benefit of Agreement. This Agreement shall inure
to the benefit of and be binding upon the Initial Purchasers, the Company and
their respective successors. This Agreement and the terms and provisions hereof
are for the sole benefit of only those persons, except that (A) the
representations, warranties, indemnities and agreements of the Company contained
in this Agreement shall also be deemed to be for the benefit of the officers and
employees of each Initial Purchaser and the person or persons, if any, who
control each Initial Purchaser within the meaning of Section 15 of the
Securities Act and (B) the indemnity agreement of the Initial Purchasers
contained in Section 8(b) hereof of this Agreement shall be deemed to be for the
benefit of directors, officers and employees of the Company and any person
controlling the Company within the meaning of Section 15 of the Securities Act.
Nothing in this Agreement is intended or shall be construed to give any person,
other than the persons referred to in this Section 12, any legal or equitable
right, remedy or claim under or in respect of this Agreement or any provision
contained herein.
13. Survival. The respective indemnities, representations, warranties and
agreements of the Company and the Initial Purchasers contained in this Agreement
or made by or on behalf of them, respectively, pursuant to this Agreement, shall
survive the delivery of and payment for the Securities and shall remain in full
force and effect, regardless of any investigation made by or on behalf of any of
them or any person controlling any of them.
14. Definition of the Terms "Business Day" and "Subsidiary". For purposes
of this Agreement, (a) "business day" means any day on which the New York Stock
Exchange, Inc. is open for trading and (b) "subsidiary" has the meaning set
forth in Rule 405 of the Rules and Regulations.
15. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of New York.
16. Counterparts. This Agreement may be executed in one or more
counterparts and, if executed in more than one counterpart, the executed
counterparts shall each be deemed to be an original but all such counterparts
shall together constitute one and the same instrument.
17. Headings. The headings herein are inserted for convenience of
reference only and are not intended to be part of, or to affect the meaning or
interpretation of, this Agreement.
-15-
If the foregoing correctly sets forth the agreement among the Company and
the Initial Purchasers, please indicate your acceptance in the space provided
for that purpose below.
Very truly yours,
▇▇▇▇▇▇ FINANCIAL, INC.
By: /s/ SIGNATURE
--------------------------
Its:
-------------------------
Accepted:
▇▇▇▇▇▇ BROTHERS INC.
By: /s/ SIGNATURE
------------------------
Its:
-----------------------
For itself and the several other
Initial Purchasers named in
Schedule I hereto
-16-
SCHEDULE I
Number of
Initial Purchasers Securities
------------------------------------------------------------ ------------
▇▇▇▇▇▇ Brothers Inc....................................... 500,000
Chase Securities Inc...................................... 500,000
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated........ 500,000
------------
Total................................................... 1,500,000
============
-1-
EXHIBIT A
FORM OF OPINION OF COUNSEL FOR
▇▇▇▇▇▇ FINANCIAL, INC., TO BE DELIVERED
PURSUANT TO SECTION 7(c)
1. The Company and each of its "significant subsidiaries" (as defined in
Rule 1-02(w) of Regulation S-X promulgated by the Commission) (the "Significant
Subsidiaries") have been duly incorporated and are validly existing as
corporations in good standing under the laws of their respective jurisdictions
of incorporation, are duly qualified to do business and are in good standing as
foreign corporations in each jurisdiction in which their respective ownership or
lease of property or the conduct of their respective businesses requires such
qualification (other than those jurisdictions in which the failure to so qualify
would not have a material adverse effect on the Company or the Company and its
subsidiaries taken as a whole), and have all power and authority necessary to
own or hold their respective properties and conduct the businesses in which they
are engaged.
2. Each of the Purchase Agreement and the Registration Rights Agreement has
been duly authorized, executed and delivered by the Company and constitutes a
valid and legally binding obligation of the Company, enforceable against the
Company in accordance with its terms, subject to the effects of bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and other similar
laws relating to or affecting creditors' rights generally, general equitable
principles (whether considered in a proceeding in equity or at law) and implied
covenant of good faith and fair dealing.
3. The Certificate of Designation has been duly authorized, executed and
filed with the Secretary of State of the State of Delaware, is in full force and
effect and conforms to all statements relating thereto contained in the
Memorandum.
4. The Amended Keep Well Agreement has been duly authorized, executed and
delivered by the Company and constitutes a valid and legally binding obligation
of the Company, enforceable against the Company in accordance with its terms,
subject to the effects of bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws relating to or affecting
creditors' rights generally, general equitable principles (whether considered in
a proceeding in equity or at law) and implied covenant of good faith and fair
dealing.
5. The execution, delivery and performance of the Purchase Agreement and
the Registration Rights Agreement by the Company and the consummation by the
Company of the transactions contemplated therein will not conflict with, or
constitute a material breach of, or constitute a default under, any material
indenture, mortgage, deed of trust, loan agreement or other agreement or
instrument to which the Company or any of its subsidiaries is a party or by
which the Company or any of its subsidiaries is bound or to which any of the
property or assets
A-1
of the Company or any of its subsidiaries is subject, nor will such actions
result in any violation of the provisions of the charter or by-laws of the
Company or any of its subsidiaries or any statute or any order, rule or
regulation of any court or governmental agency or body having jurisdiction over
the Company or any of its subsidiaries or any of their respective properties or
assets, the effects of which breach, violation or default would be material to
the Company and its subsidiaries taken as a whole.
6. All of the issued shares of capital stock of the Company and each
significant subsidiary (as such term is defined in the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), have been duly authorized and validly
issued and are fully paid and non-assessable; except as disclosed in the
Memorandum, all shares of each of the Significant Subsidiaries are owned by the
Company free and clear of any pledge, lien, security interest, charge, claim,
equitable right or encumbrance of any kind. The Securities, upon issuance and
delivery and payment therefor in the manner described in the Purchase Agreement,
and the Exchange Securities, upon issuance and delivery in the manner described
in the Registration Rights Agreement, will be duly authorized, validly issued,
fully paid and non-assessable.
7. No consent, approval, authorization, order, registration or
qualification of or which any Federal or state governmental agency or body or
any Delaware governmental agency or body acting pursuant to the Delaware General
Corporation Law or, to my knowledge, any Federal or state court or any Delaware
court acting pursuant to the Delaware General Corporation Law is required for
the issue and sale by the Company of the Securities, the issue by the Company of
the Exchange Securities, or the compliance by the Company with all of the
provisions of the Purchase Agreement and the Registration Rights Agreement,
except for such consents, approvals, authorizations, registrations or
qualifications as may be required under state securities or Blue Sky laws in
connection with the purchase and distribution of the Securities by the Initial
Purchasers and such consents, approvals, authorizations, registrations or
qualifications as may be required under the applicable federal or state
securities or Blue Sky laws in connection with the issuance of the Exchange
Securities.
8. The statements made in the Memorandum under the captions "Description of
the Offered Preferred Stock," "Description of Existing Preferred Stock," and
"Description of Common Stock," insofar as such statements purport to constitute
summaries of the terms of the Securities and the authorized capital stock of the
Company, constitute accurate summaries of the terms of the Securities and the
authorized capital stock of the Company, respectively.
9. All descriptions in the Memorandum (or the documents incorporated
therein by reference) of contracts and other documents which the Company or its
subsidiaries are a party, including (without limitation) the Amended Keep Well
Agreement, are accurate in all material respects; to the best of my knowledge,
there are no franchises, contracts, indentures, mortgages, loan agreements,
notes, leases or other instruments required to be described or referred to in
the Memorandum, or the documents incorporated by reference therein, other than
those described or referred to therein.
A-2
10. To my knowledge, there is not pending or threatened any legal or
governmental proceeding required to be described in the Memorandum, or the
documents incorporated by reference therein, which is not described as required.
11. Neither the Company nor any of its subsidiaries is required to be
registered as an "investment company" under the Investment Company Act of 1940,
as amended.
12. No registration of the Securities under the Securities Act of 1933, as
amended (the "Securities Act"), is required for the offer and sale of the
Securities by the Company to the Initial Purchasers or the initial reoffer and
resale of the Securities by the Initial Purchasers solely in the manner
contemplated by the Memorandum.
13. When the Securities are issued and delivered pursuant to this
Agreement, such securities will not be of the same class (within the meaning of
Rule 144A(d)(3) under the Securities Act) as any security of the Company that is
listed on a national securities exchange registered under Section 6 of the
Exchange Act or that is quoted in a United States automated interdealer
quotation system.
I have not independently verified the accuracy, completeness or fairness of
the statements made or included in the Memorandum or in the documents
incorporated by reference therein (the "Exchange Act Documents") and take no
responsibility therefor, except as and to the extent set forth in paragraphs
(7), (8) and (9) above. In the course of the preparation by the Company of the
Memorandum, I participated in conferences with certain officers and employees of
the Company, with representatives of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP and with counsel to the
Initial Purchasers. Based on my examination of the Memorandum and the Exchange
Act Documents, my investigations made in connection with the preparation of the
Memorandum and my participation in the conferences referred to above, I have no
reason to believe that the Memorandum, including the Exchange Act Documents
(except for the financial statements and schedules and other financial and
statistical data, as to which I express no opinion or belief), contains any
untrue statement of a material fact or omits to state any material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
A-3