Exhibit 4.1
PURCHASE AGREEMENT
by and among
LOCAL FINANCIAL CORPORATION,
FRIEDMAN, BILLINGS, XXXXXX & CO., INC.
and
EACH OF THE PURCHASERS REFERRED TO HEREIN
Dated as of September 8, 1997
TABLE OF CONTENTS
Page
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Article I. Definitions............................................................................1
Section 1.1 Definitions...................................................................1
Article II. Purchase and Sale of Securities........................................................6
Section 2.1 Purchase and Sale of Securities...............................................6
Section 2.2 Closing.......................................................................6
Article III. Representations and Warranties.........................................................6
Section 3.1 Representations and Warranties of the Company.................................6
Section 3.2 Representations and Warranties of the Purchasers.............................15
Article IV. Conditions Precedent to the Closing...................................................19
Section 4.1 Conditions to Obligations of the Parties.....................................19
Section 4.2 Conditions to Obligations of the Purchasers..................................19
Section 4.3 Conditions to Obligations of the Company.....................................21
Article V. Covenants.............................................................................22
Section 5.1 Investigation and Confidentiality............................................22
Section 5.2 Press Releases...............................................................23
Section 5.3 No Solicitation..............................................................23
Section 5.4 Use of Proceeds..............................................................24
Section 5.5 Rights of First Refusal......................................................25
Section 5.6 Rule 144 and Rule 144A Reporting.............................................28
Section 5.7 Stock Options................................................................29
Section 5.8 Warrants.....................................................................29
Section 5.9 Exchange of Securities.......................................................29
Article VI. Miscellaneous.........................................................................29
Section 6.1 Survival of Provisions.......................................................29
Section 6.2 Termination..................................................................30
Section 6.3 Waiver; Amendments...........................................................30
Section 6.4 Communications...............................................................31
Section 6.5 Costs, Expenses and Taxes....................................................31
Page
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Section 6.6 Execution in Counterparts....................................................32
Section 6.7 Binding Effect; Assignment...................................................32
Section 6.8 Governing Law................................................................32
Section 6.9 Severability of Provisions...................................................32
Section 6.10 Headings and Gender..........................................................33
Section 6.11 Integration..................................................................33
Exhibit A Form of Senior Note
Exhibit B Form of Registration Rights Agreement
ii
PURCHASE AGREEMENT
Purchase Agreement, dated as of September 8, 1997 (the "Agreement"), by
and among Local Financial Corporation, a Delaware corporation, the Placement
Agent, and the other parties named on the signature pages hereof (each of which
is acting severally and not jointly and as to itself only).
In consideration of the mutual covenants and agreements set forth
herein and for good and valuable consideration, the receipt of which is hereby
acknowledged, the parties agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1 Definitions. As used in this Agreement, and unless the
context requires a different meaning, the following terms have the meanings
indicated:
"Affiliate" means, with respect to any Person, any Person that,
directly or indirectly, controls, is controlled by or is under common control
with such Person. For the purposes of this definition, "control" (including,
with correlative meanings, the terms "controlled by" and "under common control
with") shall mean the possession, directly or indirectly, of the power to direct
or cause the direction of the management and policies of such Person, whether
through the ownership of voting securities, by contract or otherwise.
"Agreement" means this Purchase Agreement, as amended, supplemented or
modified from time to time.
"Banks" means Local Federal Bank, F.S.B., a federally-chartered savings
bank, and Local America Bank, F.S.B., a federally-chartered savings bank, in
each case together with their respective successors.
"Business Day" means any day except a Saturday, Sunday or other day on
which commercial banks and savings institutions in the State of Oklahoma are
authorized or obligated by law to close.
"Capital Securities" of any Person means Capital Stock of the Person
and Stock Equivalents of the Person.
"Capital Stock" of any Person means any and all shares of capital stock
or other equity interest of such Person.
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"Closing" has the meaning set forth in Section 2.2.
"Closing Date" has the meaning set forth in Section 2.2.
"Code" means the Internal Revenue Code of 1986, as amended (or any
successor statute in effect from time to time), and the rules and regulations
promulgated thereunder.
"Commission" means the Securities and Exchange Commission and any
successor thereto.
"Common Stock" means the Common Stock, par value $.01 per share, of the
Company.
"Company" means Local Financial Corporation, a Delaware corporation,
together with its successors.
"Environmental Claim" means any written notice from any governmental
authority or third party alleging potential liability (including without
limitation potential liability for investigating costs, cleanup costs,
governmental response costs, natural resource damages, property damages,
personal injuries or penalties) arising out of, based on, or resulting from the
presence, or release into the environment of any Materials of Environmental
Concern.
"Environmental Laws" means any law, statute, rule or regulation of any
governmental, judicial, legislative, executive, administrative or regulatory
authority of the United States, or of any state, local or foreign government or
any subdivision thereof or of any governmental body or other regulatory or
administrative agency or commission, domestic or foreign (a "Law"), relating to
pollution or protection of the environment (including ambient air, surface
water, groundwater, land surface or subsurface strata), including without
limitation the Comprehensive Environmental Response, Compensation and Liability
Act of 1980, as amended, the Resource Conservation and Recovery Act of 1976, as
amended, and other Laws relating to (i) emissions, discharges or releases of
pollutants, contaminants, chemicals, or industrial toxic or hazardous substances
or wastes (collectively known as "Polluting Substances") or (ii) the handling,
storage, disposal, reclamation, recycling or transportation of Polluting
Substances.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended (or any successor statute in effect from time to time).
"Escrow Agreement" means the Escrow Agreement to be entered into
effective as of the Closing between the Company, the Selling Shareholders and
The Bank of New York, as escrow agent, which agreement shall contain customary
terms and conditions.
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"Exchange Act" means the Securities Exchange Act of 1934, as amended
and in effect from time to time (or any successor statute in effect from time to
time), and the rules and regulations of the Commission promulgated thereunder.
"FDIA" means the Federal Deposit Insurance Act, as amended (or any
successor statute in effect from time to time).
"FDIC" means the Federal Deposit Insurance Corporation and any
successor thereto.
"HOLA" means the Home Owners' Loan Act, as amended (or any successor
statute in effect from time to time).
"Indenture" means the Indenture between the Company and The Bank of New
York, a New York banking corporation, as trustee, as the same may be amended
from time to time in accordance with the terms thereof, providing for the
issuance of the Senior Notes.
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
encumbrance, charge or security interest of any kind in respect of such asset.
"Management" means the following members of the senior management of
the Company: Chairman, President, Chief Executive Officer, Chief Financial
Officer and any Executive Vice President.
"Material Adverse Effect" means a material adverse effect on the
financial condition, business or results of operations of the Company and the
Company Subsidiaries, taken as a whole; provided, however, that Material Adverse
Effect shall not be deemed to include the impact of the transactions
contemplated by this Agreement or any Related Agreement, including the fees and
expenses to be paid in connection with the consummation of the transactions
contemplated by this Agreement and the Related Agreements or any impact or
effect on the Company resulting from actions taken by the Company after the
Closing.
"Materials of Environmental Concern" means pollutants, contaminants,
wastes, toxic substances, petroleum and petroleum products and any other
materials regulated under Environmental Laws.
"Non-performing Assets" means the following consolidated assets of the
Company: (i) loans, securities or other assets with respect to which the Company
or either of the Banks have ceased recognizing interest under generally accepted
accounting principles or as to which any payments of principal or interest are
past due 90 days or more as of the applicable date and (ii) Real Estate Owned;
and references herein to the amounts of Non- performing Assets shall mean and
refer to the aggregate carrying value of such assets as stated in the books and
financial statements of the Company and the Banks under generally accepted
accounting principles.
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"OTS" means the Office of Thrift Supervision and any successor thereto.
"Person" means an individual, a corporation, a partnership, an
association, a trust or any other entity or organization, including a government
or a political subdivision or an agency or instrumentality thereof.
"Placement Agent" means Friedman, Billings, Xxxxxx & Co., Inc., in its
capacity as private placement agent with respect to the offering of Securities
described in the Private Placement Memorandum.
"Preferred Stock" means the Preferred Stock, par value $.01 per share,
of the Company.
"Previously Disclosed" means disclosed either (i) in a letter dated the
date hereof delivered from the Company to each Purchaser or from a Purchaser to
the Company, as applicable, specifically referring to the appropriate section of
this Agreement and describing in reasonable detail the matters contained
therein, or (ii) in the Private Placement Memorandum.
"Private Placement Memorandum" means the Private Placement Memorandum,
dated August 25, 1997, with respect to the Securities referred to therein, as
amended or supplemented by the Company at any time prior to the Closing.
"Purchaser" means each Person (other than the Company) listed on the
signature pages of this Agreement, and its permitted successors and assigns as
provided herein, including any Person who becomes a party hereto by executing
and delivering a signature page hereto after the date of this Agreement.
"Real Estate Owned" means the consolidated properties of the Company
acquired by foreclosure on a loan or deed-in-lieu thereof or otherwise included
in the Company's real estate owned for purposes of reporting asset quality of
the Banks in their reports filed with the OTS.
"Redemption Agreement" means the agreement to be entered into among the
Company and the Selling Shareholders, whereby the Company will redeem all of the
issued and outstanding shares of Common Stock of the Company.
"Registration Rights Agreement" means the Registration Rights Agreement
to be entered into among the Company, the Placement Agent and the Purchasers,
substantially in the form of Exhibit B hereto, as amended, supplemented or
otherwise modified from time to time.
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"Related Agreements" means the Indenture, the Security Agreement, the
Escrow Agreement, the Registration Rights Agreement and the Redemption
Agreement, each of which shall be effective as of the Closing.
"SAIF" means the Savings Association Insurance Fund administered by the
FDIC, and any successor thereto.
"Securities" means (i) the Senior Notes and (ii) the Common Stock, in
each case, to be issued and sold by the Company and purchased by the Purchasers
pursuant to this Agreement.
"Securities Act" means the Securities Act of 1933, as amended (or any
successor statute thereto as in effect from time to time), and the rules and
regulations of the Commission promulgated thereunder.
"Security Agreement" means the Security Agreement to be entered into
between the Company and The Bank of New York, as trustee for the Indenture.
"Selling Shareholders" shall have the meaning set forth in the
Redemption Agreement.
"Senior Notes" means the Senior Notes due 2004 to be issued and sold by
the Company and purchased by the Purchasers pursuant to this Agreement,
substantially in the form of Exhibit A hereto, as amended, supplemented or
otherwise modified from time to time.
"State" means each of the states of the United States, the District of
Columbia and the Commonwealth of Puerto Rico.
"Stock Equivalents" means, with respect to any Person, options,
warrants, calls, contracts or other rights entered into or issued by such Person
which confer upon the holder thereof the right (whether or not contingent) to
acquire any Capital Stock, voting securities or securities convertible into or
exchangeable for Capital Stock or voting securities of such Person.
"Stock Option Plan" means the Stock Option Plan to be adopted by the
Company in September 1997.
"Subsidiary" of any Person means any entity of which securities or
other ownership interests having ordinary voting power to elect a majority of
the board of directors or other persons performing similar functions are owned
directly or indirectly by such Person.
"Taxes" means all taxes, charges, fees, levies or other governmental
assessments, including, without limitation, all net income, gross income, gross
receipts, sales, use, ad
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valorem, transfer, franchise, profits, license, withholding, payroll,
employment, excise, estimated, severance, stamp, occupation, property or other
taxes, customs, dues, fees, assessments or charges of any kind whatsoever,
together with any interest and any penalties, additions to tax or additional
amounts imposed by any taxing authority (domestic or foreign).
"Tax Returns" means all foreign, federal, State and local returns
relating to Taxes.
ARTICLE II
PURCHASE AND SALE OF SECURITIES
Section 2.1 Purchase and Sale of Securities. Subject to the terms and
conditions hereof and the representations and warranties contained herein, at
the Closing (as defined below), the Company agrees that it will issue and sell
to each Purchaser and each such Purchaser agrees, severally and not jointly and
as to itself only, that it will purchase from the Company (i) the number of
shares of Common Stock (at a price per share of $10.00), (ii) the aggregate
principal amount of Senior Notes or (iii) a combination of Common Stock and
Senior Notes, in each case as set forth below each such Purchaser's name on the
Investor Signature Page to this Agreement.
Section 2.2 Closing. The purchase and sale of the Securities will take
place at a closing (the "Closing") to be held at the offices of the Placement
Agent, Arlington, Virginia, at 10:00 a.m., Eastern Time, on September 8, 1997,
or on such earlier date as all of the conditions to the parties' obligations
hereunder specified in Article IV of this Agreement (other than the delivery of
certificates, opinions and other instruments and documents to be delivered at
the Closing) have been satisfied or waived, or at such other location, and on
such other Business Day and time as the parties hereto shall mutually agree. The
date on which the Closing is to occur is referred to herein as the "Closing
Date."
ARTICLE III
REPRESENTATIONS AND WARRANTIES
Section 3.1 Representations and Warranties of the Company. Except as
Previously Disclosed, the Company represents and warrants to, and covenants and
agrees with, the Placement Agent and each of the Purchasers as follows:
(a) Capital Structure. As of the date hereof, the authorized capital
stock of the Company consists of 2,000 shares of Common Stock and 1,000 shares
of Preferred Stock. Immediately prior to the Closing, the Company shall amend
its Certificate of Incorporation in order to increase its authorized capital
stock to 25,000,000 shares of Common Stock and
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5,000,000 shares of Preferred Stock. As of the date hereof, there were (i) 60
shares of Common Stock issued and outstanding and (ii) no shares of Preferred
Stock issued and outstanding. Immediately prior to the Closing on the Closing
Date, the Company's outstanding Capital Stock will be as set forth in the
preceding sentence. As of the date hereof, all outstanding shares of Common
Stock have been duly authorized and validly issued and are fully paid and
nonassessable and none of the outstanding shares of Common Stock has been issued
in violation of the preemptive rights of any Person. There are no Stock
Equivalents authorized, issued or outstanding with respect to the Capital Stock
of the Company as of the date hereof.
(b) Organization, Standing and Authority of the Company. The Company is
a corporation duly organized, validly existing and in good standing under the
laws of the State of Delaware with full corporate power and authority to own or
lease all of its properties and assets and to carry on its business as now
conducted and is duly licensed or qualified to do business and is in good
standing in each jurisdiction in which its ownership or leasing of property or
the conduct of its business requires such licensing or qualification, except
where the failure to be so licensed, qualified or in good standing would not
have a Material Adverse Effect. The Company is duly registered as a savings and
loan holding company under the HOLA and the regulations of the OTS thereunder.
The Company has heretofore delivered true and complete copies of the Certificate
of Incorporation and Bylaws of the Company as in effect as of the date hereof to
each Purchaser which has made a written request directly to the Company for the
same.
(c) Ownership of the Company Subsidiaries. The only direct or indirect
Subsidiaries of the Company consist of Local Federal Bank, F.S.B., Local America
Inc., Local America Bank of Tulsa, F.S.B., Local Acceptance Company of Florida,
Star Financial Services Corporation, Local Mortgage Corporation, Star
Properties, Inc., Service Corporation of Tulsa Inc., and Oklahoma Financial
Services Corporation. Except for (i) Capital Stock of the Company Subsidiaries,
(ii) stock in the Federal Home Loan Bank of Topeka and (iii) securities and
other interests taken in consideration of debts previously contracted, the
Company does not own or have the right to acquire, directly or indirectly, any
outstanding Capital Stock or other voting securities or ownership interests of
any corporation, bank, savings association, partnership, joint venture or other
organization. The outstanding shares of Capital Stock of the Company
Subsidiaries have been duly authorized and validly issued, are fully paid and
nonassessable, and are directly or indirectly owned by the Company free and
clear of all Liens. No Stock Equivalents are authorized, issued or outstanding
with respect to the Capital Stock of the Company Subsidiaries and there are no
agreements, understandings or commitments relating to the right of the Company
to vote or to dispose of such Capital Stock.
(d) Organization, Standing and Authority of the Company Subsidiaries.
The Banks are federally-chartered savings banks duly organized, validly existing
and in good standing under the laws of the United States, and the other Company
Subsidiaries are corporations duly organized, validly existing and in good
standing under the laws of their
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respective jurisdictions of incorporation. The deposit accounts of the Banks are
insured by the SAIF to the maximum extent permitted by the FDIA, and the Banks
have paid all premiums and assessments required by the FDIA and the regulations
thereunder. Each of the Company Subsidiaries has full power and authority to own
or lease all of its respective properties and assets and to carry on its
respective business as now conducted and is duly licensed or qualified to do
business and is in good standing in each jurisdiction in which its ownership or
leasing of property or the conduct of its business requires such qualification,
except where the failure to be so licensed, qualified or in good standing would
not have a Material Adverse Effect. The Company has heretofore delivered true
and complete copies of the Articles of Incorporation, Charter and Bylaws of each
of the Company Subsidiaries as in effect as of the date hereof to each Purchaser
which has made a written request directly to the Company for the same.
(e) Authority. The Company has full corporate power and authority to
perform its obligations under this Agreement and each of the Related Agreements
to which it will become a party, and the execution, delivery and performance by
the Company of this Agreement and each Related Agreement to which it will become
a party have been or, prior to the Closing, will have been, duly authorized by
all necessary corporate action on the part of the Company.
(f) Due Execution. This Agreement constitutes, and each of the Related
Agreements to which the Company will become a party, when duly authorized,
executed and delivered by the Company, will constitute a valid and binding
obligation of the Company enforceable against the Company in accordance with its
terms, except (i) rights to indemnity and contribution under the Registration
Rights Agreement may be limited by applicable law, (ii) enforceability may be
limited by bankruptcy, insolvency, moratorium and similar laws affecting
creditors' rights generally and (iii) rights of acceleration and the
availability of equitable remedies may be limited by equitable principles of
general applicability.
(g) No Conflict. The execution, delivery and performance of this
Agreement and each of the Related Agreements by the Company will not conflict
with or constitute a breach of, or a default under (i) the Certificate of
Incorporation, Articles of Incorporation or Charter, as the case may be, or the
Bylaws of the Company or any of the Company Subsidiaries, (ii) any obligation,
agreement, indenture, bond, debenture, note, instrument or any other evidence of
indebtedness to which the Company or any of the Company Subsidiaries is a party
or as to which any of their assets are subject, or (iii) any law, ordinance,
order, license, rule or other regulation or demand of any court or governmental
agency, arbitration panel or authority applicable to the Company or any of the
Company Subsidiaries, except, in the case of clauses (ii) and (iii) above, for
such conflicts, breaches or defaults which would not, individually or in the
aggregate, have a Material Adverse Effect. Except for compliance with applicable
federal and State securities laws in connection with this Agreement and the
performance by the Company of its obligations under the Registration Rights
Agreement, no consent, approval, order or other authorization of any
governmental, administrative or regulatory body or agency is legally required by
or
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on behalf of the Company or the Company Subsidiaries in connection with the
execution, delivery and performance of this Agreement and each of the Related
Agreements to which the Company is or will become a party. The representations
and warranties set forth in clause (iii) of the second preceding sentence and in
the preceding sentence, insofar as it relates to federal and state securities
law and antitrust requirements are made in reliance on the representations and
warranties of the Purchasers contained in this Agreement.
(h) Status of Securities. The shares of Common Stock and the Senior
Notes issuable pursuant to this Agreement have been authorized by all necessary
corporate action on the part of the Company. When the Common Stock is delivered
to the Purchasers at the Closing against payment therefor as provided herein,
the Common Stock will be duly authorized, validly issued and fully paid and
nonassessable, and will not be issued in violation of the preemptive rights of
any Person. At the Closing Date, the Senior Notes will have been duly executed
by the Company and, when authenticated in the manner provided for in the
Indenture and delivered by the Company to the Purchasers against payment
therefor as described in the Private Placement Memorandum, will constitute valid
and binding obligations of the Company, enforceable against the Company in
accordance with their terms, except to the extent that (A) enforceability may be
limited by bankruptcy, insolvency (including without limitation, all laws
relating to fraudulent transfers), moratorium and similar laws affecting
creditors' rights generally and (B) enforcement thereof is subject to general
principles of equity (regardless of whether enforcement is considered in a
proceeding in equity or at law).
(i) Regulatory Reports. The Company and each of the Banks has duly
filed with the OTS and the FDIC, as the case may be, in correct form the reports
required to be filed under applicable laws and regulations and such reports were
in all material respects complete and accurate and in compliance with the
requirements of applicable laws and regulations, provided that information as of
a later date shall be deemed to modify information as of an earlier date; and
the Company has previously delivered or made available to each Purchaser which
has requested the same in writing directly to the Company accurate and complete
copies of all such reports. In connection with the examination of the Company
and the Banks by the OTS completed on or about November 11, 1996, neither the
Company nor either of the Banks were required to correct or change any action,
procedure or proceeding which the Company or the Banks believe has not been
substantially corrected or changed as required.
(j) Financial Statements.
(i) The Private Placement Memorandum includes (x) consolidated
statements of financial condition of the Company as of June 30, 1996 and 1995
and consolidated statements of income, stockholders' equity and cash flows of
the Company for each of the years ended June 30, 1996, 1995 and 1994,
accompanied by the related audit report of Xxxxxx Xxxxxxxx LLP, and (y) an
unaudited consolidated statement of financial condition of the Company as of May
31, 1997 and an unaudited consolidated statement of
9
income of the Company for the eleven months ended May 31, 1997. The foregoing
financial statements, including the related notes where applicable (collectively
the "Company Financial Statements"), fairly present (subject, in the case of the
unaudited Company Financial Statements at and for the eleven months ended May
31, 1997, to audit adjustments recognized in connection with the fiscal 1997
audit, provided such audit adjustments, either individually or in the aggregate,
do not have a Material Adverse Effect) the consolidated financial condition of
the Company as of the respective dates set forth therein, and the consolidated
results of operations, stockholders' equity and cash flows of the Company for
the respective periods or as of the respective dates set forth therein, except
that no consolidated statements of stockholders' equity or cash flows were
presented for the eleven months ended May 31, 1997.
(ii) Each of the Company Financial Statements has been
prepared in accordance with generally accepted accounting principles
consistently applied during the periods involved, except as stated therein, and
except that the unaudited Company Financial Statements need not contain all of
the footnote and line item disclosures that would be required for financial
statements prepared in accordance with generally accepted accounting principles.
The books and records of the Company and the Company Subsidiaries are being
maintained in material compliance with applicable legal and accounting
requirements, and such books and records accurately reflect in all material
respects all dealings and transactions in respect of the business, assets,
liabilities and affairs of the Company and the Company Subsidiaries, provided,
however, that the Company makes no representation or warranty regarding the
accuracy or completeness of the books and records of the Company's automobile
finance subsidiaries.
(k) Material Adverse Change. Since May 31, 1997, (i) neither the
Company nor any of the Company Subsidiaries has incurred any material liability
(on a consolidated basis), except in the ordinary course of business consistent
with past practice (excluding the incurrence of expenses or obligations in
connection with this Agreement, any Related Agreement or any of the transactions
contemplated hereby or thereby) and except for such liability or liabilities as
would not, individually or in the aggregate, have a Material Adverse Effect, and
(ii) no events or developments involving the Company or the Company Subsidiaries
have occurred which, individually or in the aggregate, (A) have had a Material
Adverse Effect, or (B) materially impair the ability of the Company to perform
its obligations under this Agreement, any Related Agreement to which it will
become a party or any of the Securities.
(l) Environmental Matters.
(i) To the knowledge of the Company, the Company and the
Company Subsidiaries are in compliance with all Environmental Laws, except for
any violations of any Environmental Law which would not, individually or in the
aggregate, have a Material Adverse Effect. Neither the Company nor any Company
Subsidiary has received any communication alleging that the Company or any
Company Subsidiary is not in such
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compliance and, to the knowledge of the Company, there are no present
circumstances that would prevent or interfere with the continuation of such
compliance.
(ii) To the knowledge of the Company, none of the properties
owned, leased or operated by the Company or the Company Subsidiaries has been or
is in violation of or liable under any Environmental Law, except for any such
violations or liabilities which would not individually or in the aggregate have
a Material Adverse Effect.
(iii) To the knowledge of the Company, there are no past or
present actions, activities, circumstances, conditions, events or incidents that
would reasonably form the basis of any Environmental Claim or other claim or
action or governmental investigation that would result in the imposition of any
liability arising under any Environmental Law against the Company or any Company
Subsidiary or against any Person whose liability for any Environmental Claim the
Company or any Company Subsidiary has or may have retained or assumed either
contractually or by operation of law, except such as would not have a Material
Adverse Effect.
(m) Tax Matters. The Company and the Company Subsidiaries have timely
filed all Tax Returns required by applicable law to be filed by them (including,
without limitation, estimated tax returns, income tax returns, information
returns and withholding and employment tax returns) and have paid, or where
payment is not required to have been made, have set up an adequate reserve or
accrual for the payment of, all Taxes required to be paid in respect of the
periods covered by such Tax Returns, except in all cases where the failure to
have timely filed such Tax Returns or have paid or have set up an adequate
reserve or accrual for the payment of all such Taxes would not have a Material
Adverse Effect. As of the date hereof, there is no audit examination, assessed
deficiency, deficiency litigation or refund litigation with respect to any Taxes
of the Company or any of the Company Subsidiaries. All Taxes due with respect to
completed and settled examinations or concluded litigation relating to the
Company have been paid in full or adequate provision has been made for any such
Taxes on the Company's consolidated statement of financial condition in
accordance with generally accepted accounting principles, except where the
failure to have paid in full or have made an adequate provision for the payment
of all such Taxes would not have a Material Adverse Effect. The Company has not
executed an extension or waiver of any statute of limitations on the assessment
or collection of any material tax due that is currently in effect.
(n) Allowance for Loan Losses. Notwithstanding anything in this
Agreement to the contrary, it is acknowledged and agreed that the Company makes
no representation or warranty with respect to the collectibility of the
Company's indirect automobile receivables portfolio or that the loan loss
reserves in respect to such portfolio as of May 31, 1997 are sufficient to cover
the losses that may be realized with respect to such portfolio.
(o) ERISA. Each "employee benefit plan" (as defined in Section 3(3) of
the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), other
than any
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"multiemployer plan" (as defined in Section 3(37) or Section 4001(a)(3) of
ERISA)) that is sponsored, maintained or contributed to by the Company (a
"Company Plan") is in compliance in all material respects with all presently
applicable provisions of ERISA, except where any such noncompliance would not
reasonably be expected to have a Material Adverse Effect; no "reportable event"
(as defined in Section 4043 of ERISA or the regulations thereunder), other than
an event as to which the 30-day statutory notice period is waived by regulation,
has occurred with respect to any Company Plan that is a "pension plan" (as
defined in Section 3(2) of ERISA (each such Company Plan, a "Company Pension
Plan"); the Company has not incurred and does not expect to incur any material
liability with respect to any Company Pension Plan under (i) Title IV of ERISA
(with respect to the termination of, or withdrawal from, any such plan) or (ii)
Sections 412 or 4971 of the Code; and each Company Pension Plan has received a
determination letter from the Internal Revenue Service regarding the
qualification of such plan under Section 401(a) of the Code, and to the
knowledge of the Company, nothing has occurred, whether by action or by failure
to act, that would cause the loss of such qualification.
(p) Litigation. Except for the FDIC Dispute, there are no actions,
suits, investigations or legal proceedings pending against, or to the knowledge
of the Company, threatened against, or affecting the Company or any of the
Company Subsidiaries or their respective properties before any court or
governmental body or agency which would reasonably be expected to have a
Material Adverse Effect or which in any manner challenge the legality, validity
or enforceability of this Agreement, any of the Related Agreements or any of the
Securities, or which would reasonably be expected to materially impair the
ability or obligation of the Company to perform fully on a timely basis its
obligations under this Agreement, any Related Agreement to which it will become
a party or any of the Securities.
(q) Compliance with Laws. Each of the Company and the Company
Subsidiaries has all permits, licenses, certificates of authority, orders and
approvals of, and has made all filings, applications and registrations with,
federal, State, local and foreign governmental or regulatory bodies that are
necessary in order to permit it to carry on its business as it is presently
being conducted and the absence of which would have a Material Adverse Effect;
all such permits, licenses, certificates of authority, orders and approvals are
in full force and effect; and to the knowledge of the Company, no suspension or
cancellation of any of the same is threatened.
(r) No Default or Violation. Neither the Company nor any of the Company
Subsidiaries currently is in violation of its Certificate of Incorporation,
Articles of Incorporation or Charter, as the case may be, its Bylaws, or of any
applicable federal, state or local law or ordinance or any order, rule or
regulation of any federal, state, local or other governmental agency or body
(including, without limitation, all banking, securities, safety, health,
environmental, zoning, anti-discrimination, antitrust, and wage and hour laws,
ordinances, orders, rules and regulations), or in default with respect to any
order, writ, injunction or decree of any court, or in default under any order,
license, regulation or demand of any governmental agency, where any of such
violations or defaults would,
12
individually or in the aggregate, reasonably be expected (i) to have a Material
Adverse Effect or (ii) materially adversely impair the ability of the Company to
perform on a timely basis any obligation which it has under this Agreement, any
Related Agreement to which it will become a party or any of the Securities and
neither the Company nor any of the Company Subsidiaries has received any notice
or communication from any federal, state or local governmental authority
asserting that the Company or such Company Subsidiary is in violation of any of
the foregoing which would reasonably be expected to have any effect set forth in
clauses (i) or (ii) above. Neither the Company nor any of the Company
Subsidiaries is subject to any regulatory or supervisory cease and desist order,
agreement, written directive, memorandum of understanding or written commitment,
and none of them has received any written communication requesting that they
enter into any of the foregoing.
(s) Certain Contracts. Except for matters which are the subject of the
FDIC Dispute (as to which no representation or warranty is made hereby) neither
the Company nor any Company Subsidiary is in default or in non-compliance, which
default or non-compliance would reasonably be expected to have a Material
Adverse Effect, under any contract, agreement, commitment, arrangement, lease,
insurance policy or other instrument to which it is a party or by which its
assets, business or operations may be bound or affected, whether entered into in
the ordinary course of business or otherwise and whether written or oral, and
there has not occurred any event that with the lapse of time or the giving of
notice, or both, would constitute such a default or non-compliance.
(t) Insurance. Except with respect to the Company's automobile finance
subsidiaries, as to which the Company makes no representations or warranty, the
Company and each Company Subsidiary is insured for reasonable amounts with
financially sound and reputable insurance companies against such risks as
companies engaged in a similar business would, in accordance with good business
practice, customarily be insured and has maintained all insurance required by
applicable laws and regulations, except where the failure to be so insured would
not have a Material Adverse Effect. Except with respect to the Company's
automobile finance subsidiaries, as to which the Company makes no
representations or warranty, neither the Company nor any of the Company
Subsidiaries has received any notice of cancellation or notice of a material
amendment of any such insurance policy or bond or is in default under such
policy or bond, no coverage thereunder is being disputed and all material claims
thereunder have been filed in a timely fashion, except where any such
cancellation, default or dispute would not, individually or in the aggregate,
have a Material Adverse Effect.
(u) Properties. All real and personal property owned by the Company or
any of the Company Subsidiaries or presently used by any of them in their
respective business is in an adequate condition (ordinary wear and tear
excepted) and is sufficient to carry on the business of the Company and the
Company Subsidiaries in the ordinary course of business consistent with their
past practices. The Company and the Company Subsidiaries have good and
marketable title free and clear of all Liens to all of the material properties
and assets, real and personal, reflected on the consolidated statement of
financial condition of the
13
Company as of May 31, 1997 included in the Company Financial Statements or
acquired after such date, except (i) for Liens for current taxes not yet due or
payable, (ii) for pledges to secure deposits and other Liens incurred in the
ordinary course of its banking business, (iii) for such Liens, if any, which
would not, individually or in the aggregate, have a Material Adverse Effect and
(iv) as reflected on the consolidated statement of financial condition of the
Company as of May 31, 1997 included in the Company Financial Statements. All
real and personal property which is material to the Company's business on a
consolidated basis and leased or licensed by the Company or any Company
Subsidiary is held pursuant to leases or licenses which are valid and
enforceable in accordance with their respective terms and such leases will not
terminate or lapse prior to the Closing Date, except where such invalidity,
unenforceability, termination or lapse would not, individually or in the
aggregate, have a Material Adverse Effect.
(v) Certain Fees. Except for fees and expenses payable to the Placement
Agent, no fees or commissions will be payable by the Company or any of the
Company Subsidiaries to brokers, finders, investment bankers or banks pursuant
to any agreement entered into by the Company or any of the Company Subsidiaries
with respect to the offer and sale of the Securities or any of the other
transactions contemplated hereby. Notwithstanding the foregoing, the parties
acknowledge and agree that the Company and Bear, Xxxxxxx & Co. Inc. ("Bear
Xxxxxxx") have entered into a letter agreement, dated June 10, 1996 (the "Bear
Xxxxxxx Engagement Letter"). The Selling Shareholders have agreed in the
Redemption Agreement that they will pay all fees and expenses required to be
paid to Bear Xxxxxxx in connection with the transactions contemplated by the
Redemption Agreement and this Agreement under the Bear Xxxxxxx Engagement
Letter.
(w) Certain Assets. The Company has Previously Disclosed a true and
correct listing of the following assets of the Company and the Company
Subsidiaries as of May 31, 1997: (i) all Non-performing Assets, (ii) all loans,
securities or other assets as to which any payments of principal or interest are
past due 60 or more days and (iii) all loans, securities or other assets not
included in the foregoing which have been classified special mention,
substandard, doubtful or loss by management of the Company or the Company
Subsidiaries or regulatory examiners.
(x) Hedging Contracts. Attached hereto as Schedule I is a true and
correct listing as of May 31, 1997 of all open futures contracts, option
contracts, interest rate caps, interest rate floors, interest rate exchange or
swap agreements or any other open agreements to which the Company is a party or
which are being utilized by the Company for purposes of hedging the exposure of
its interest-earning assets and interest-bearing liabilities to changes in
interest rates.
(y) No Debt. Except (i) for a promissory note payable to Xxxxxx Xxxxxxx
Read with an outstanding principal balance of $7,010,009 million as of the date
hereof, plus accrued and unpaid interest, and (ii) for the Senior Notes to be
issued pursuant to this Agreement,
14
the Company, on an unconsolidated basis, does not have any outstanding
Indebtedness (as defined in Section 1.01 of the Indenture).
(z) Private Offering. Neither the Company nor any Person authorized to
act on its behalf, has taken or will take any action which might subject the
offering, issuance or sale of the Securities to the registration requirements of
the Securities Act or comparable provisions of any applicable State securities
laws.
(aa) Certain Information. The Company has reviewed the historical
information with respect to the Company and the Company Subsidiaries, financial
and otherwise, contained in the Private Placement Memorandum and, to the extent
such information relates to the Company and the Company Subsidiaries, as of the
date or dates thereof, none of such information contained an untrue statement of
a material fact or omitted to state a material fact necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading.
(bb) Certain May 31, 1997 Balance Sheet Information. At May 31, 1997,
the Company had (i) not less than $105,780,778 of consolidated stockholders'
equity; (ii) established reserves of not less than $12,785,314 with respect to
its potential liability to the FDIC regarding certain tax benefits previously
received under an Assistance Agreement with the Federal Savings and Loan
Insurance Corporation; and (ii) on a consolidated basis $1,307,886,382 of
adjustable-rate collateralized mortgage obligations with interest rate
adjustments tied to the Federal Home Loan Bank Eleventh District Cost of Funds
Index, subject in the case of each of clauses (i), (ii) and (iii) to audit
adjustments recognized in connection with the fiscal 1997 audit, provided such
audit adjustments, either individually or in the aggregate, do not have a
Material Adverse Effect.
Section 3.2 Representations and Warranties of the Purchasers.
(a) Investment Intent. Each Purchaser, severally and not jointly and as
to itself only, represents and warrants to, and covenants and agrees with, the
Company and the Placement Agent that the Securities to be acquired by it
hereunder are being acquired for its own account for investment and with no
intention of distributing or reselling such Securities or any part thereof or
interest therein in any transaction which would be in violation of the
securities laws of the United States of America or any State, without prejudice,
however, to a Purchaser's right, subject to the provisions of this Agreement and
the Registration Rights Agreement, at all times to sell or otherwise dispose of
all or any part of such Securities under an effective registration statement
under the Securities Act and other applicable State securities laws or under an
exemption from such registration requirements, and subject, nevertheless, to the
disposition of a Purchaser's property being at all times within its control.
Each Purchaser, severally and not jointly and as to itself only, further
represents and warrants to the Company that such Purchaser has no present
agreement, understanding, plan or intent to transfer the Securities to be
purchased by it to any transferee.
15
(b) Transfer Restrictions. If a Purchaser should decide to dispose of
any of the Securities, such Purchaser understands and agrees that it may do so
only pursuant to an effective registration statement under the Securities Act or
as set forth below: (i) to the Company, (ii) to any Person reasonably believed
by such Purchaser to be a "qualified institutional buyer" (as defined in Rule
144A under the Securities Act) in compliance with Rule 144A under the Securities
Act, (iii) pursuant to an exemption from registration set forth in Rule 144
under the Securities Act, (iv) to any Person who is reasonably believed by such
Purchaser to be an "accredited investor" (as defined in Rule 501(a) under the
Securities Act) and who, prior to such transfer, furnishes to the Purchaser and
the Company a signed letter confirming its status as an accredited investor and
agreeing to the restrictions on transfer of the Securities set forth in this
Agreement or (v) to any Affiliate of such Purchaser pursuant to an applicable
exemption under the Securities Act. In connection with any transfer of any
Securities other than (i) any transfer pursuant to an effective registration
statement or (ii) any transfer by a qualified institutional buyer, the Company
may require that the transferor of any such Securities provide to the Company an
opinion of counsel experienced in the area of United States securities laws
selected by the transferor (which may include in-house counsel of a transferor),
which counsel shall be and the form and substance of which opinion shall be,
reasonably satisfactory to the Company, to the effect that such transfer does
not require registration of such Securities under the Securities Act or any
State securities laws. In connection with any transfer pursuant to clause (ii)
above, the Company may request reasonable certification as to the status of the
transferor's transferee as a qualified institutional buyer.
(c) Stop Transfer Instructions. Each Purchaser agrees that the Company
shall be entitled to make a notation on its records and give instructions to any
transfer agent of the Securities in order to implement the restrictions on
transfer set forth in Section 3.2(b) of this Agreement.
(d) Accredited Investor. Each Purchaser, severally and not jointly and
as to itself only, represents and warrants to, and covenants and agrees with,
the Company that (i) at the time it was offered the Securities, it was, (ii) at
the date hereof, it is, and (iii) at the Closing, it will be, an "accredited
investor" as defined in Rule 501(a) under the Securities Act, and has such
knowledge, sophistication and experience in business and financial matters so as
to be capable of evaluating the merits and risks of the prospective investment
in the Securities, and has so evaluated the merits and risks of such investment,
is able to bear the economic risk of such investment and, at the present time,
is able to afford a complete loss of such investment.
(e) Due Execution. Each Purchaser, severally and not jointly and as to
itself only, represents and warrants to the Company and the Placement Agent that
this Agreement has been, and each Related Agreement to which it will become a
party will be, duly executed and delivered by it or on its behalf and
constitutes, or will constitute, as applicable, a valid and binding obligation
of such Purchaser, enforceable against the Purchaser in accordance with its
terms, except that (i) rights to indemnity and contribution under the
Registration
16
Rights Agreement may be limited by applicable law, (ii) enforceability may be
limited by bankruptcy, insolvency, moratorium and similar laws affecting
creditors' rights generally and (iii) rights of acceleration and the
availability of equitable remedies may be limited by equitable principles of
general applicability.
(f) No Conflict. Each Purchaser, severally and not jointly and as to
itself only, represents and warrants to the Company and the Placement Agent that
(i) the execution, delivery and performance of this Agreement and each of the
Related Agreements to which it will become a party do not and will not, as
applicable, conflict with or constitute a breach or a default under (i) its
articles of incorporation, charter or other organizational document or bylaws,
as applicable, (ii) any obligation, agreement, indenture, bond, debenture, note,
instrument or any other evidence of indebtedness to which it is a party or as to
which its assets are subject or (iii) any law, ordinance, order, license, rule
or other regulation or demand of any court or governmental agency, arbitration
panel or authority applicable to it.
(g) Access to Information. Each Purchaser acknowledges receipt of the
Private Placement Memorandum and further acknowledges that prior to the date
hereof and, subject to the Company's compliance with its obligations pursuant to
Section 5.1(a) hereof, on and subsequent to the date hereof, it has been
afforded (i) the opportunity to ask such questions as it has deemed necessary
of, and to receive answers from, representatives of the Company concerning the
terms and conditions of the offering of the Securities and the merits and risks
of investing in the Securities and (ii) access to information about the Company
and the Company's financial condition, results of operations, business,
properties, management and prospects sufficient to enable it to evaluate its
investment in the Securities. Each Purchaser also acknowledges that all
information, financial or otherwise, included in the Private Placement
Memorandum (both preliminary and final) has been provided by the Company for
evaluation by prospective Purchasers. Each Purchaser further acknowledges that
the information relating to the Company and the Company Subsidiaries is the sole
responsibility of the Company. Each Purchaser agrees and acknowledges that the
Placement Agent has made no recommendation or warranty and assumes no
responsibility as to the accuracy or completeness of any such information.
(h) Reliance of Others on Purchasers' Representations. Each Purchaser
understands and acknowledges that (i) the Securities are being offered and sold
without registration under the Securities Act in a private placement that is
exempt from the registration provisions of the Securities Act and (ii) such
exemption depends in part on, and that the Company, its counsel and the
Placement Agent will rely upon, the accuracy and truthfulness of the
representations and warranties of such Purchaser set forth in this Agreement,
and such Purchaser hereby consents to such reliance.
17
(i) Governmental Authorization.
(i) Except for any required compliance by a Purchaser with
applicable federal and State securities laws, each Purchaser, severally
and not jointly and as to itself only, represents and warrants to the
Company that no consent, approval, order or other authorization of any
governmental, administrative or regulatory body or agency is legally
required by or on behalf of the Purchaser in connection with the
execution, delivery and performance of this Agreement and each Related
Agreement to which it will become a party.
(ii) Each Purchaser, severally and not jointly and as to
itself only, represents and warrants that upon consummation of the
transactions contemplated by Section 2.1 hereof, (A) it will not,
directly or indirectly, through one or more subsidiaries or
transactions or by acting in concert with one or more persons or
companies, be in control of the Company or the Banks, as defined in 12
C.F.R. Section 574.4(a), and will not be subject to a rebuttable
determination of control under 12 C.F.R. Section 574.4(b); and (B) it
does not have any agreements or understandings, written or tacit, with
respect to the exercise of control, directly or indirectly, over the
management or policies of the Company or the Banks, including
agreements (except for this Agreement) relating to voting, acquisition
or disposition of the Company's or the Bank's Capital Stock. Each
Purchaser acknowledges that if such Purchaser is deemed to be so acting
in concert with one or more persons or companies or to have such an
agreement or understanding, then such Purchaser could be in violation
of certain federal statutes and regulations, including, without
limitation, bank regulatory and antitrust laws, and such Purchaser
could be subject to fines and other penalties in respect of such
violation.
(j) Information Provided. Each Purchaser represents and warrants that,
in considering its investment in the Local Securities, such Purchaser has not
relied, and such Purchaser acknowledges and agrees that it is not entitled to
rely, on any information which is not contained in the Private Placement
Memorandum. Without limiting the generality of the foregoing, such Purchaser
acknowledges and agrees that it is not entitled to rely on (i) the Confidential
Information Memorandum dated May 1997 prepared by Bear, Xxxxxxx & Co. Inc., (ii)
any information provided by the Placement Agent, including but not limited to
the Preliminary Private Placement Memorandum dated August 8, 1997, or (iii) any
information provided by Xx. Xxxxxx X. Xxxxxxxx or any person or entity acting on
Xx. Xxxxxxxx'x behalf.
18
ARTICLE IV
CONDITIONS PRECEDENT TO THE CLOSING
Section 4.1 Conditions to Obligations of the Parties. The respective
obligations of each of the parties hereto to fulfill their obligations under
Section 2.1 hereof at the Closing shall be subject to the satisfaction or waiver
prior to the Closing of the following conditions:
(a) All requirements prescribed by law which are necessary to
the consummation of the transactions contemplated by this Agreement
shall have been satisfied.
(b) No party hereto shall be subject to any order, decree or
injunction of a court or agency of competent jurisdiction which enjoins
or prohibits the consummation of any of the transactions contemplated
by this Agreement.
(c) No statute, rule or regulation shall have been enacted,
entered, promulgated, interpreted, applied or enforced by any
governmental authority which prohibits, restricts or makes illegal
consummation of any of the transactions contemplated by this Agreement.
(d) The Company shall have completed the sale of the
Securities as contemplated by this Agreement and shall have received
gross proceeds from the sale of the Senior Notes and the Common Stock
of at least $70.0 million and $190.0 million, respectively.
(e) Each of the parties hereto shall have received (i) a
counterpart to this Agreement, duly executed and delivered by the
parties hereto, and (ii) a counterpart of each Related Agreement (other
than the Senior Notes) to which it is a party, in form and substance
satisfactory to the parties, which shall have been duly executed and
delivered by each of the applicable parties.
Section 4.2 Conditions to Obligations of the Purchasers. The
obligations of each of the Purchasers to fulfill its obligations under Section
2.1 hereof shall be subject to the satisfaction or waiver prior to the Closing
of the following conditions:
(a) Each of the representations and warranties of the Company
contained in this Agreement shall be true and correct in all material
respects as of the date of this Agreement and as of the Closing Date as
if made on the Closing Date (or on the date when made in the case of
any representation or warranty which specifically relates to an earlier
date); the Company shall have performed, in all material respects, each
of its covenants and agreements contained in this Agreement to be
19
performed prior to the Closing; and the Placement Agent shall have
received a certificate signed by the Chief Executive Officer and the
Chief Financial Officer of the Company, dated the Closing Date, to the
foregoing effect.
(b) Each of the representations and warranties of the Selling
Shareholders contained in the Redemption Agreement shall be true and
correct in all material respects as of the date of such agreement and
as of the Closing Date as if made on the Closing Date (or on the date
when made in the case of any representation or warranty which
specifically relates to an earlier date); the Selling Shareholders
shall have performed, in all material respects, each of their covenants
and agreements contained in the Redemption Agreement to be performed
prior to the Closing; and the Company shall have received a certificate
signed by the Shareholder Representative, dated the Closing Date, to
the foregoing effect.
(c) The Company shall have delivered to each Purchaser a
Senior Note and/or a certificate evidencing shares of Common Stock, as
the case may be, in each case registered in the name of the Purchaser,
sufficient to evidence the Securities to be issued and sold by the
Company and purchased by the Purchaser, against payment therefor to the
Company, as such investment has been identified on the Investor
Signature Page to this Agreement.
(d) The Company and the Selling Shareholders shall have
executed such Redemption Agreement.
(e) The Company shall have obtained the requisite stockholder
approval of an amendment to its Certificate of Incorporation to
increase its authorized Common Stock to 25,000,000 shares and its
authorized Preferred Stock to 5,000,000 shares and shall have filed
with the Secretary of State of the State of Delaware the appropriate
documentation in order to effect such amendment.
(f) The Company shall have delivered to the Placement Agent a
certificate signed by its Chief Executive Officer, dated as of the
Closing Date, certifying on behalf of the Company that the undersigned
has reviewed on behalf of the Company the information, financial or
otherwise, contained in the Private Placement Memorandum and, to the
best knowledge of the undersigned, as of the respective dates thereof,
none of such information (except for the information covered by Section
4.2(g)(iii) as to which such certificate shall not speak) contained an
untrue statement of a material fact or omitted to state a material fact
necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading.
(g) Xx. Xxxxxx X. Xxxxxxxx shall have delivered to the Company
and the Placement Agent a certificate signed by Xx. Xxxxxxxx, the
Chairman elect of the
20
Board of Directors and proposed Chief Executive Officer of the Company,
dated as of the Closing Date, certifying that:
(i) the Company has assumed the provisions of the
letter agreement, dated as of February 3, 1997, as amended on
August 6, 1997, between the Placement Agent and Xxxxxx X.
Xxxxxxxx (the "Letter Agreement"), and has accepted and agreed
to all of the obligations set forth in such Letter Agreement,
including without limitation, the provisions regarding fees
and expenses, indemnification and contribution and Post
Offering Engagement, as defined in the Letter Agreement; and
(ii) Xx. Xxxxxxxx has read the Private Placement
Memorandum; and
(iii) to the best knowledge of Xx. Xxxxxxxx, the
information set forth in the Private Placement Memorandum
regarding Xx. Xxxxxxxx and the information which the Private
Placement Memorandum describes as having been provided by Xx.
Xxxxxxxx, including, without limitation, information regarding
the future plans of the Company or its new management or board
of directors, does not contain an 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.
(h) Xxxxxx X. Xxxxxxxx shall have delivered a certificate to
the Company and the Selling Shareholders, dated as of the Closing Date,
certifying as to the written information provided to prospective
Purchasers in connection with the offer and sale of the Securities.
(i) Effective upon consummation of the Offering (i) all of the
current directors of the Company shall have resigned, the directors of
the Banks shall have tendered letters of resignation to the Company and
(ii) Xxxxxx X. Xxxxx, Xxx X. Xxxxxx and Xxxxxx X. Xxxxxxxx shall have
been elected directors of the Company for terms expiring at the next
annual meeting of stockholders of the Company.
(j) The Placement Agent shall have received such other
certificates, documents and instruments related to the transactions
contemplated hereby as may have been reasonably required by it and are
customary for transactions of this type, and all corporate and other
proceedings, and all documents, instruments and other legal matters in
connection with the transactions contemplated by this Agreement, shall
be reasonably satisfactory in form and substance to it and its counsel.
Section 4.3 Conditions to Obligations of the Company. The obligations
of the Company to fulfill its obligations under this Agreement, including
without limitation the
21
obligations set forth in Section 2.1 hereof, shall be subject to the
satisfaction or waiver prior to the Closing of the following conditions:
(a) Each of the representations and warranties of the
Purchasers contained in this Agreement shall be true and correct in all
material respects as of the date of this Agreement and as of the
Closing Date as if made on the Closing Date. Payment by each Purchaser
of the applicable consideration for each of the Securities to be issued
and sold by the Company shall be deemed an affirmation by each such
Purchaser of the representations and warranties set forth in Section
3.2 of this Agreement.
(b) Each Purchaser shall have delivered to the Company the
applicable consideration for each of the Securities to be issued and
sold by the Company and purchased by the Purchaser pursuant to this
Agreement, as set forth on the Investor Signature Page to this
Agreement, such amount to be payable by wire transfer of immediately
available funds to an account with a bank designated by the Company, by
notice to each of the Purchasers to be provided no later than two
Business Days prior to the Closing Date.
(c) No party to this Agreement (other than the Company) shall
be in material breach of this Agreement unless such breach shall have
been waived in writing by each of the other parties to this Agreement.
(d) The conditions set forth in Section 4.2(g) and (h) shall have been
satisfied.
ARTICLE V
COVENANTS
Section 5.1 Investigation and Confidentiality.
(a) Prior to the Closing, the Company shall permit each Purchaser and
its representatives reasonable access to its properties and personnel, and shall
disclose and make available to each Purchaser all books, papers and records
relating to the assets, stock ownership, properties, operations, obligations and
liabilities of the Company and the Company Subsidiaries, including, but not
limited to, all books of account (including the general ledger), tax records,
minute books of meetings of boards of directors (and any committees thereof) and
shareholders, organizational documents, bylaws, material contracts and
agreements, filings with any regulatory authority, accountants' work papers,
litigation files, loan files, plans affecting employees, and any other business
activities or prospects in which a Purchaser may have a reasonable interest,
provided that such access shall be reasonably related to the transactions
contemplated hereby and not unduly interfere with normal operations, and
provided further that in the event that any of the foregoing are in the control
of any third party, the Company shall use its best efforts to cause such third
22
party to provide access to such materials to each Purchaser who shall request
the same. In the event that the Company is prohibited by law from providing any
of the access referred to in the preceding sentence to a Purchaser, it shall use
its best efforts to obtain promptly waivers thereof so as to permit such access.
The Company shall make the directors, officers, employees and agents and
authorized representatives (including counsel and independent public
accountants) of the Company and the Company Subsidiaries available to confer
with a Purchaser and its representatives, provided that such access shall be
reasonably related to the transactions contemplated hereby and not unduly
interfere with normal operations.
(b) All information furnished to a Purchaser by the Company previously
in connection with the transactions contemplated by this Agreement or pursuant
hereto shall be treated as the sole property of the Company and each Purchaser
covenants, severally and not jointly and as to itself only, that it shall use
its best efforts to keep confidential all such information and shall not
directly or indirectly use such information for any competitive or other
commercial purposes. The obligation to keep such information confidential shall
continue for five years from the date hereof but shall not apply to (i) any
information which (x) a Purchaser can establish by convincing evidence was
already in its possession prior to the disclosure thereof by the Company; (y)
was then generally known to the public; or (z) became known to the public
through no fault of a Purchaser; or (ii) disclosures pursuant to a legal
requirement or in accordance with an order of a court of competent jurisdiction,
provided that a Purchaser shall use its best efforts to give the Company at
least ten Business Days prior notice thereof and shall limit such disclosure to
the minimum amount required by such legal requirement or court order.
Section 5.2 Press Releases. The Company and the Placement Agent shall
agree with each other as to the form and substance of any press release related
to this Agreement or the transactions contemplated hereby, and consult with each
other as to the form and substance of other public disclosures which may relate
to the transactions contemplated by this Agreement, provided, however, that
nothing contained herein shall prohibit any party, following notification to
such other parties, from making any disclosure which it determines in good faith
is required by law or regulation.
Section 5.3 No Solicitation. Between the time of execution of this
Agreement and the earlier of (i) the Closing or (ii) termination of this
Agreement in accordance with Section 6.2 hereof, neither the Company nor any
Company Subsidiary, nor any of the shareholders, directors, officers, employees,
representatives or agents of the Company or other persons controlled by the
Company, shall (i) execute any agreement, letter or undertaking of any kind
whatsoever with respect to any acquisition, lease or purchase of all or a
substantial portion of the assets of, or any equity interest in, the Company or
any Company Subsidiary or any business combination with the Company or any
Company Subsidiary (an "Acquisition Transaction"), other than as contemplated by
this Agreement, including specifically with an Alternative Bidder (as defined
below) or (ii) except with respect to such persons or parties with whom the
Company shall have received a written proposal with respect to an Acquisition
Transaction as of a date prior to the date hereof (an
23
"Alternative Bidder"), solicit or encourage inquiries or proposals with respect
to, furnish any information relating to, or participate in any negotiations or
discussions concerning, an Acquisition Transaction. With respect to any
Alternative Bidder, as of the date hereof through the Closing, neither the
Company, any Company Subsidiary, nor any of the shareholders, directors,
officers, employees, representatives or agents of the Company or other persons
controlled by the Company shall (i) communicate any information, written or
oral, with respect to the transactions contemplated by this Agreement and any
Related Agreement or (ii) take any steps whatsoever with respect to negotiation
of any agreement with respect to such Alternative Bidder's Acquisition
Transaction. Other than as set forth herein, the Company will immediately notify
the Placement Agent orally and in writing if any such inquiries or proposals are
received by, and such information is required from, or any such negotiations or
discussions are sought to be initiated with, the Company or any Company
Subsidiary. Notwithstanding anything in this Agreement to the contrary, if the
Placement Agent shall have failed to deliver to the Company by 5:00 p.m.,
Eastern Time, on September 2, 1997, valid executed and delivered signature pages
to this Agreement reflecting binding and enforceable commitments (subject to the
terms of this Agreement) on the part of Purchasers to purchase at least $70.0
million of Senior Notes and $190.0 million of Common Stock, then from and after
such time, this Section 5.3 shall be inapplicable.
Section 5.4 Use of Proceeds. On the Closing Date, the Company shall
apply the net proceeds from the sale of Securities pursuant to this Agreement as
follows:
(i) $154.0 million of such net proceeds shall be utilized to
fund the redemption of all of the issued and outstanding shares of Common Stock
of the Company as of the date hereof pursuant to the terms of the Redemption
Agreement;
(ii) the amount of such net proceeds required to prepay the
outstanding principal balance (in the amount of $7,010,000) of the promissory
note payable to the order of Xxxxxx Xxxxxxx Read, plus all accrued and unpaid
interest to the date of prepayment, shall be utilized to pay such principal and
interest;
(iii) an amount of such net proceeds equal to the first two
full semi-annual interest payments which become due on the Senior Notes shall be
used to establish and maintain the Interest Reserve Account required by Section
10.18 of the Indenture; and
(iv) with respect to any amount remaining after the amounts in
clauses (i) through (iii) are paid, to make capital contributions to Local
Federal Bank, F.S.B. and Local America Bank, F.S.B. in an amount sufficient to
cause each of the Banks to be classified "adequately capitalized" pursuant to 12
U.S.C. Section 1831o and 12 C.F.R. Part 565 immediately following consummation
of the transactions contemplated by this Agreement and the Related Agreements
and following the liquidation of the interest rate contracts and the additional
writedowns and reserves the Company intends to recognize as described in the
section entitled "Capitalization" in the Private Placement Memorandum.
24
Section 5.5 Rights of First Refusal. (a) Subject to subsection (g)
hereof, for so long as a Purchaser is a holder of Common Stock (an "Eligible
Purchaser"), the Company agrees not to issue any of its Capital Securities or to
permit the Banks to issue any of their Capital Securities (such Capital
Securities of the Company and the Banks hereinafter are deemed to be jointly
covered by the term "Capital Securities") to any Person or Persons, other than
in the case of Capital Securities of the Banks to the Company (a "Third Party
Purchaser"), without first offering or causing the Banks to offer, as
applicable, to such Eligible Purchasers the opportunity to purchase all or part
of such Capital Securities being issued at the same purchase price and on the
same terms as are proposed to be offered to a Third Party Purchaser. For this
purpose, the Company shall deliver a written notice, or cause the Banks to
deliver a written notice, as applicable (in each case a "Notice"), to each
Eligible Purchaser of any proposed issuance of Capital Securities which shall
contain all of the material terms of the proposed issuance, including, without
limitation, the purchase price and total amount of Capital Securities proposed
to be issued, which terms, including, without limitation, the purchase price and
any conversion price or rate of such Capital Securities, may to the extent
necessary be expressed in the form of good faith estimates by the Board of
Directors of the Company.
(b) Upon receipt of the Notice, each Eligible Purchaser will have the
right to subscribe for all or part of the Capital Securities on the same terms
set forth in the Notice, by delivery of written notice to the Company or the
Banks, as applicable ("Acceptance Notice"), in accordance with the instructions
set forth in the Notice, within 20 days from the date of its receipt of the
Notice (the "Offer Period"). The Acceptance Notice shall specify the amount (not
exceeding all) of the Capital Securities being offered with respect to which the
Eligible Purchaser wishes to exercise its subscription rights.
(c) An Acceptance Notice, once given by an Eligible Purchaser in
accordance with subsection (b), shall become irrevocable at the end of the Offer
Period unless it is withdrawn prior to the expiration of the Offer Period (any
such Acceptance Notice which so becomes irrevocable being called an "Irrevocable
Acceptance" and the Eligible Purchaser giving such notice being an "Accepting
Eligible Purchaser").
(d) (i) In the event that any Eligible Purchaser fails to have
delivered an Irrevocable Acceptance with respect to any Notice on or prior to
the last day of the Offer Period with respect to such Notice, such Eligible
Purchaser will have no further right to subscribe for the Capital Securities
proposed to be issued in such Notice during a Free Sale Period commencing on the
date immediately following the end of the Offer Period with respect to such
Notice.
(ii) In the event that no Eligible Purchasers shall have
delivered an Irrevocable Acceptance with respect to a Notice on or
prior to the last day of the Offer Period with respect to such Notice,
the Company or the Banks, as applicable, will be entitled to a Free
Sale Period with respect to the Capital Securities proposed
25
to be issued in such Notice commencing on the date immediately
following the end of the Offer Period with respect to such notice.
(iii) In the event that Accepting Eligible Purchasers deliver
Irrevocable Acceptances relating to an amount of Capital Securities in
the aggregate in excess of the amount of Capital Securities proposed to
be issued pursuant to the Notice, the amount of Capital Securities
which each Accepting Eligible Purchaser shall be obligated to purchase
will be such Eligible Purchaser's Purchaser Percentage of the Capital
Securities proposed to be issued pursuant to such Notice (provided
that, if one or more Accepting Eligible Purchasers deliver Irrevocable
Acceptances to subscribe for less than such Eligible Purchaser's
Purchaser Percentage, then the Capital Securities that would have been
allocated to such Eligible Purchaser or Purchasers pursuant to this
subsection (d)(iii) shall be allocated to the other Accepting Eligible
Purchasers in accordance with their respective Purchaser Percentages,
except that no Accepting Eligible Purchaser shall be required to
purchase any Capital Securities in an amount greater than the amount
elected to be subscribed for by such Accepting Eligible Purchaser
pursuant to its Irrevocable Acceptance).
(iv) In the event that Accepting Eligible Purchasers exercise
their option to purchase, pursuant to the foregoing provisions of this
Section 5.5, in the aggregate, all (or, if the Company or the Banks, as
applicable, shall so elect, more than 90%) of the Capital Securities
proposed to be issued in the Notice, all such Eligible Purchasers and
the Company or the Banks, as applicable, shall complete the purchase of
the Capital Securities on the terms set forth in the Notice within 30
days of the expiration of the Offer Period, or within such longer
period (not to exceed six months from the date of the expiration of the
Offer Period) as may be required for such Accepting Eligible Purchaser
to obtain any applicable regulatory approvals that such Accepting
Eligible Purchaser is making a good faith effort to obtain. If an
Accepting Eligible Purchaser does not complete the purchase of Capital
Securities as set forth above, other than as a result of the
negligence, bad faith or willful misconduct of the Company or the Banks
or any action or omission made by the Company or the Banks that would
prevent such an Accepting Eligible Purchaser from completing its
purchase, the Company or the Banks, as applicable, will be entitled to
a Free Sale Period commencing on the 31st day following the expiration
of the Offer Period, subject to extension as set forth in the
immediately preceding sentence.
(v) Other than as set forth in subsection (vi) below (and
subject to subsection (iv) above), in the event that Accepting Eligible
Purchasers shall have delivered Irrevocable Acceptances for all or less
than all of the Capital Securities set forth in the Notice, each
Accepting Eligible Purchaser shall purchase, within the applicable
period set forth in subsection (iv) above or subsection (vi) below, as
the case may be, the amount of Capital Securities set forth in its
Irrevocable Acceptance.
26
(vi) In the event that Accepting Eligible Purchasers elect to
subscribe for, in the aggregate, less than all (or if the Company or
the Banks, as applicable, shall so elect, 90%) of the Capital
Securities proposed to be offered pursuant to the Notice, the Company
or the Banks, as applicable, shall have a Free Sale Period commencing
on the date immediately following the end of the Offer Period with
respect to the Capital Securities offered pursuant to such Notice as to
which Accepting Eligible Purchasers do not elect to subscribe and the
Company agrees to sell, or to cause the Banks to sell, as applicable,
and the Accepting Eligible Purchasers shall be obligated to purchase,
the Capital Securities for which they subscribed substantially
simultaneously (or, with respect to any Accepting Eligible Purchaser,
within such longer period (not to exceed four months from the relevant
purchase by the Third Party Purchaser) as may be required for such
Accepting Eligible Purchaser to obtain any applicable regulatory
approvals that such Accepting Eligible Purchaser is making a good faith
effort to obtain) with the purchase by the Third Party Purchaser of the
balance of the Capital Securities proposed to be offered pursuant to
such Notice, it being understood that if such balance of Capital
Securities is not so purchased on the terms set forth in the Notice, no
Eligible Purchaser will be required or entitled to purchase such
Capital Securities as to which its Irrevocable Acceptance applied.
(e) If at any time during a Free Sale Period the terms of a proposed
issuance shall have changed in any material respect from the terms set forth in
the Notice, the Company or the Banks, as applicable, shall give notice (the
"Alteration Notice") to the Eligible Purchasers describing the changes in terms.
Upon receipt of any Alteration Notice, each Eligible Purchaser will have the
right to subscribe for all or part of the Capital Securities on the terms set
forth in the Alteration Notice, by delivery of an Acceptance Notice to the
Company or the Banks, as applicable, in accordance with the instructions set
forth in the Alteration Notice, within 20 days from the date of receipt of the
Alteration Notice (the "Altered Offer Period"), stating the amount (not
exceeding all) of Capital Securities proposed to be offered as to which such
Eligible Purchaser wishes to exercise its right to subscribe. In any such case,
the procedures set forth in subsection (d), to the extent applicable, shall be
followed.
(f) The failure of an Eligible Purchaser to respond to any particular
Notice or Alteration Notice will not constitute a waiver of such Eligible
Purchaser's rights with respect to any proposed issuance of Capital Securities
pursuant to a subsequent Notice or Alteration Notice.
(g) Subsections (a)-(f) shall not apply to the issuance of Capital
Securities pursuant to or in connection with (i) the purchase and sale of the
Securities contemplated by this Agreement, (ii) the issuance of Placement Agent
Warrants to the Placement Agent pursuant to Section 5.8 hereof, or in connection
with the receipt of the Company's Capital Securities upon the exercise of such
Placement Agent Warrants, (iii) a reorganization, merger or consolidation of the
Company or the Banks or a sale, disposition or other transfer
27
of all or substantially all of the assets of the Company or the Banks to any
Person or any Person to the Company or the Banks pursuant to one transaction or
series of related transactions, (iv) any conversion or exchange of any Capital
Securities in accordance with the terms of such securities or of the instruments
relating to or governing the issuance of such Capital Securities, (v) any
employee benefit plans, including the Stock Option Plan or any subsequently
adopted stock option plan, or any similar plan of the Company, (vi) any stock
dividends, or pro rata (as to any class) split-ups, combinations or exchanges of
or similar transactions involving Capital Securities, (vi) any bona fide public
offering of Capital Securities which is registered under the Securities Act, and
(viii) any issuance of Capital Securities to Xxxxxx X. Xxxxxxxx or Xxx X. Xxxxxx
pursuant to the terms of a letter agreement among the Company and Messrs.
Xxxxxxxx and Norton which provides for, among other things, the sale of Green
Country Banking Corporation.
(i) For the purposes of this Section 5.5,
"Purchaser Percentage" means, at any time of determination
with respect to an Accepting Eligible Purchaser, the aggregate number
of shares of Common Stock (including shares of Common Stock which may
be acquired upon exercise of outstanding Stock Equivalents, whether or
not then exercisable) then held by such Accepting Eligible Purchaser
divided by the aggregate number of shares of Common Stock (including
shares of Common Stock which may be acquired upon exercise of
outstanding Stock Equivalents, whether or not then exercisable) then
held by all Accepting Eligible Purchasers, expressed as a percentage,
with fractional percentages of .5 or more and less than .5 rounded up
and down, respectively.
"Free Sale Period" means a period of three months (or such
longer period of time, not in excess of one year, required to obtain
any regulatory approvals, consents or other actions necessary to
consummate a sale to a Third Party Purchaser which has agreed in
writing (subject to such regulatory approvals, consents or actions and
other reasonable closing conditions) to purchase Capital Securities on
or prior to the end of such three-month period), during which the
Company or the Banks, as applicable, shall be permitted to issue the
Capital Securities which were proposed to be issued pursuant to a
Notice or Alteration Notice to a Third Party Purchaser on terms no more
favorable to the Third Party Purchaser than those set forth in such
Notice or Alteration Notice, as the case may be.
Section 5.6 Rule 144 and Rule 144A Reporting.
With a view to making available to holders of Securities the benefits
of certain rules and regulations of the Commission which may permit the sale of
the Securities to the public without registration, the Company agrees from and
after the Closing at all times to:
28
(a) make and keep public information available, as those terms
are understood and defined in Rules 144 and 144A under the Securities
Act (or any successors thereto); and
(b) use its best efforts to file with the Commission in a
timely manner all reports and other documents required of the Company
under the Securities Act and the Exchange Act.
Section 5.7 Stock Options. Immediately following the Closing, the
Company shall adopt the Stock Option Plan and shall grant to members of
Management options under the Stock Option Plan to purchase up to an aggregate of
7.0% of the shares of Common Stock issued in the Offering as described in the
Private Placement Memorandum, which options shall (i) have a per share exercise
price equal to $10.00 and (ii) become vested and exercisable in three equal
annual installments commencing on the first annual anniversary of the date of
grant.
Section 5.8 Warrants. In accordance with the terms of the Letter
Agreement, immediately following the Closing, the Company shall issue warrants
to the Placement Agent entitling the Placement Agent to purchase from the
Company, for a period of five years after the Closing Date, an aggregate amount
of shares of Common Stock of the Company equal to 3.0% of the Common Stock
issued in the offering described in the Private Placement Memorandum, at a per
share exercise price equal to $10.00.
Section 5.9 Exchange of Securities. The Company will, at its expense,
promptly upon surrender of (i) any Senior Note or (ii) any certificate
evidencing shares of Common Stock, at the office of the Company referred to in,
or designated pursuant to, Section 6.4, respectively execute and deliver to the
Purchaser (i) a new Senior Note or Senior Notes in aggregate principal amounts
specified by the Purchaser (subject to the minimum denomination of the Senior
Notes) for an aggregate principal amount equal to the Senior Note or Senior
Notes surrendered and/or (ii) a new certificate or certificates in denominations
specified by the Purchaser for an aggregate number of shares of Common Stock
equal to the number of shares of such stock represented by the certificate or
certificates surrendered.
ARTICLE VI
MISCELLANEOUS
Section 6.1 Survival of Provisions. The representations, warranties and
covenants of the Company and the Purchasers made herein and each of the
provisions of Articles V and VI shall remain operative and in full force and
effect regardless of (i) any investigation made by or on behalf of any Purchaser
or the Company, as the case may be, (ii) acceptance of any of the Securities and
payment by the Purchasers therefor and retirement thereof or,
29
(iii) the transfer of any Securities or interest therein by any Purchaser,
provided that no transferee may claim the benefit of any such representation or
warranty; provided, however, that the representations and warranties of the
Company and the Purchasers hereunder shall have no further force and effect as
of the close of business on the date which is six months from the date of this
Agreement. Each of the Purchasers expressly acknowledge that the Company is the
only party to this Agreement making the Company's representations and warranties
and, to the extent that any recovery is sought against the Company for breach of
a representation or warranty hereunder, such recovery would impact such
stockholder to the extent such recovery reduced the Company's stockholders'
equity.
Section 6.2 Termination. This Agreement may be terminated (as between
the party electing so to terminate it and the counterparty to which termination
is directed) by giving written notice of termination to the applicable
counterparty at any time prior to the Closing:
(a) By the Company (i) if any of the conditions specified in
Sections 4.1 and 4.3 of this Agreement has not been met or waived by it
pursuant to the terms of this Agreement by 5:00 p.m., Eastern Time on
September 8, 1997 or (ii) if the Placement Agent shall have failed to
deliver to the Company by 5:00 p.m., Eastern Time, on September 2,
1997, validly executed and delivered signature pages to this Agreement
reflecting binding and enforceable commitments (subject to the terms of
this Agreement) on the part of Purchasers to purchase at least $70.0
million of Senior Notes and $190.0 million of Common Stock; provided,
however, that no such commitment from any single purchaser or group of
purchasers acting in concert to purchase Common Stock shall be for a
number of shares of Common Stock which exceeds 9.9% of the aggregate
number of shares of Common Stock for which such signature pages are
delivered; or
(b) By any Purchaser if any of the conditions specified in
Sections 4.1 and 4.2 of this Agreement has not been met or waived by
such Purchaser pursuant to the terms of this Agreement by 5:00 p.m.,
Eastern Time, on September 8, 1997.
Section 6.3 Waiver; Amendments.
(a) No failure or delay on the part of the Company or any Purchaser in
exercising any right, power or remedy hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right, power or
remedy preclude any other or further exercise thereof or the exercise of any
other right, power or remedy. The remedies provided for herein are cumulative
and are not exclusive of any remedies that may be available to the Company or
any Purchaser at law or in equity. No waiver of or consent to any departure by
the Company or any Purchaser from any provision of this Agreement shall be
effective unless signed in writing by the party entitled to the benefit thereof.
Except as otherwise provided herein, no amendment, modification or termination
of any provision of this Agreement shall be effective unless signed in writing
by or on behalf of the Company and each Purchaser. Any amendment, supplement or
modification of or to any of this
30
Agreement, any waiver of any provision of this Agreement, and any consent to any
departure from the terms of any provision of this Agreement, shall be effective
only in the specific instance and for the specific purpose for which made or
given. Except where notice is specifically required by this Agreement, no notice
to or demand on any party hereto in any case shall entitle another party hereto
to any other or further notice or demand in similar or other circumstances.
(b) The Company shall not, directly or indirectly, pay or cause to be
paid any remuneration, whether by way of dividends, redemption premiums, fees or
otherwise, to any holder of any Securities as consideration for or as an
inducement to any consent, waiver or amendment of any of the terms and
provisions of this Agreement unless such remuneration is paid to all Purchasers;
provided, however, that this Section 6.3(b) does not restrict the Company's
ability to deal individually with any Purchaser or any subsequent holder with
respect to any settlement of a dispute or in the ordinary course of business.
Section 6.4 Communications. All notices, demands and other
communications provided for or permitted hereunder shall be made in writing by
hand-delivery, registered first-class mail, telex, telecopier, or air courier
guaranteeing overnight delivery:
(i) if to any Purchaser, initially at the address set forth
below its name on the Investor Signature Page to this Agreement, and
thereafter at such other address, notice of which is given in
accordance with this Section 6.4;
(ii) if to the Company, initially at 0000 XX 00xx Xxxxxx,
Xxxxxxxx Xxxx, Xxxxxxxx 00000-0000, Attention: Chairman, with copies to
the selling shareholders identified in the Redemption Agreement c/o
Xxxxx Xxxxxxx, 0000 Xxxxxxx Xxxxx Xxxxx, Xxxxxx, Xxxxxxx 00000 and to
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP, 000 Xxxxx Xxxxxx, Xxx Xxxx,
Xxx Xxxx 00000, Attention: Xxxxxxx Xxxxxxxxxx; and thereafter at such
other address notice of which is given in accordance with this Section
6.4; and
(iii) if to the Placement Agent, initially at Potomac Tower,
0000 00xx Xxxxxx Xxxxx, Xxxxxxxxx, Xxxxxxxx 00000-0000, Attention:
Xxxxxx X. Xxxxxxx; and thereafter at such other address notice of which
is given in accordance with this Section 6.4.
All such notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; five Business
Days after being sent by certified mail, return receipt requested, if mailed;
when answered back, if telexed; when receipt is acknowledged, if telecopied; and
on the next Business Day if timely delivered to an air courier guaranteeing
overnight delivery.
Section 6.5 Costs, Expenses and Taxes. The Company agrees to pay all
reasonable costs and expenses incurred by it in connection with the negotiation,
preparation, typing, reproduction, execution, delivery and performance of this
Agreement and the Related
31
Agreements and any amendment or supplement or modification hereof or thereof
(except to the extent otherwise provided in the Registration Rights Agreement),
including without limitation, attorneys fees and expenses and all reasonable
costs and expenses incurred by it in connection with the Company's
administration of this Agreement and any Related Agreement. The Company shall
pay all reasonable costs and expenses (including, without limitation, attorneys'
fees and expenses), if any, incurred by the Purchasers in connection with any
waiver, amendment or modification of any provision of this Agreement or any
Related Agreement with respect to an obligation of, or requested by, the
Company. In addition, the Company shall pay any and all stamp, transfer and
other similar taxes payable in connection with the execution and delivery of
this Agreement or the original issuance of any Securities, and shall save and
hold each Purchaser harmless from and against any and all liabilities with
respect to or resulting from any delay in paying, or omission to pay, such
taxes. Without limiting the foregoing, the Company agrees to pay the fees and
expenses of Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP ("Xxxxxxx Xxxx"). Xxxxxxx
Xxxx shall be a third party beneficiary of the preceding sentence.
Section 6.6 Execution in Counterparts. This Agreement may be executed
in any number of counterparts and by different parties hereto on separate
counterparts, each of which counterparts, when so executed and delivered, shall
be deemed to be an original and all of which counterparts, taken together, shall
constitute but one and the same Agreement.
Section 6.7 Binding Effect; Assignment. Prior to the Closing, the
rights and obligations of any Purchaser under this Agreement may not be assigned
to any other Person except with the prior written consent of the Company, and
after the Closing the rights and obligations of any Purchaser may be assigned by
such Purchaser to any Person purchasing Securities from the Purchaser
contemporaneously with such assignment (provided the rights so assigned shall
apply to the Securities so purchased), subject to the provisions of Section
3.2(b), provided that the rights of a Purchaser pursuant to Section 5.5 hereof
may not be assigned to any Person other than an Affiliate of such Purchaser. The
rights and obligations of the Company under this Agreement may not be assigned
by the Company without the consent of each Purchaser. Except as expressly
provided in this Agreement, this Agreement shall not be construed so as to
confer any right or benefit upon any Person other than the parties to this
Agreement, and their respective successors and permitted assigns. This Agreement
shall be binding upon the Company and each Purchaser, and their respective
successors and permitted assigns.
Section 6.8 Governing Law. This Agreement shall be deemed to be a
contract made under the laws of the State of Delaware, and for all purposes
shall be construed in accordance with the laws of said state, without regard to
principles of conflict of laws.
Section 6.9 Severability of Provisions. Any provision of this Agreement
which is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability only without invalidating the remaining
32
provisions hereof or affecting the validity or enforceability of such provision
in any other jurisdiction.
Section 6.10 Headings and Gender. The Article and Section headings and
Table of Contents used or contained in this Agreement are for convenience of
reference only and shall not affect the construction of this Agreement. Use of a
particular gender herein shall be considered to represent the masculine,
feminine or neuter gender whenever appropriate.
Section 6.11 Integration. This Agreement (including documents delivered
pursuant hereto) and the Related Agreements (other than the Redemption Agreement
and the Escrow Agreement) constitute the entire agreement among the parties with
respect to the subject matter thereof and there are no promises or undertakings
with respect thereto not expressly set forth or referred to herein or therein.
33
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first above written.
LOCAL FINANCIAL CORPORATION
By: /s/Xxxxx X. Xxxxxxx
---------------------------------
Name: Xxxxx X. Xxxxxxx
Title: President
FRIEDMAN, BILLINGS, XXXXXX & CO., INC.
By: /s/ Xxxxxx X. Xxxxxxx
---------------------------------
Name: Xxxxxx X. Xxxxxxx
--------------------------
Title: Senior Vice President
--------------------------
34
Investor Signature Page to the Purchase Agreement
--------------------------
Name of Investor
By:
--------------------------
Name:
Title:
Address:
-----------------
--------------------------
--------------------------
Number of Shares of Common Stock proposed to be purchased
(at $10.00 per share) ______ shares
Aggregate principle amount of Senior Notes proposed to be
purchased $______
35
