Exhibit 10.1
STEWARDSHIP FINANCIAL CORPORATION
7,000 Capital Securities
Fixed/Floating Rate Capital Securities
(Liquidation Amount $1,000.00 per Capital Security)
PLACEMENT AGREEMENT
____________________
September 9, 2003
FTN Financial Capital Markets
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, Inc.
▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
Stewardship Financial Corporation, a New Jersey corporation (the
"Company"), and its financing subsidiary, Stewardship Statutory Trust I, a
Connecticut statutory trust (the "Trust," and hereinafter together with the
Company, the "Offerors"), hereby confirm their agreement (this "Agreement") with
you as placement agents (the "Placement Agents"), as follows:
Section 1. Issuance and Sale of Securities.
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1.1. Introduction.
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The Offerors propose to issue and sell at the Closing (as defined in
Section 2.3.1 hereof) 7,000 of the Trust's Fixed/Floating Rate Capital
Securities, with a liquidation amount of $1,000.00 per capital security (the
"Capital Securities"), to Preferred Term Securities XI, Ltd., a company with
limited liability established under the laws of the Cayman Islands (the
"Purchaser") pursuant to the terms of a Subscription Agreement entered into, or
to be entered into on or prior to the Closing Date (as defined in Section 2.3.1
hereof), between the Offerors and the Purchaser (the "Subscription Agreement"),
the form of which is attached hereto as Exhibit A and incorporated herein by
this reference.
1.2. Operative Agreements.
---------------------
The Capital Securities shall be fully and unconditionally guaranteed on a
subordinated basis by the Company with respect to distributions and amounts
payable upon liquidation, redemption or repayment (the "Guarantee") pursuant and
subject to the Guarantee Agreement (the "Guarantee Agreement"), to be dated as
of the Closing Date and executed and delivered by the Company and U.S. Bank
National Association ("U.S. Bank"), as trustee (the "Guarantee Trustee"), for
the benefit from time to time of the holders of the Capital Securities. The
entire proceeds from the sale by the Trust to the holders of the Capital
Securities shall be combined with the entire proceeds from the sale by the Trust
to the Company of its common securities (the "Common Securities"), and shall be
used by the Trust to purchase $7,217,000.00 in principal amount of the
Fixed/Floating Rate Junior Subordinated Deferrable Interest Debentures (the
"Debentures") of the Company. The Capital Securities and the Common Securities
for the Trust shall be issued pursuant to an Amended and Restated Declaration of
Trust among U.S. Bank, as institutional trustee (the "Institutional Trustee"),
the Administrators named therein, and the Company, to be dated as of the Closing
Date and in substantially the form heretofore delivered to the Placement Agents
(the "Trust Agreement"). The Debentures shall be issued pursuant to an Indenture
(the "Indenture"), to be dated as of the Closing Date, between the Company and
U.S. Bank, as indenture trustee (the "Indenture Trustee"). The documents
identified in this Section 1.2 and in Section 1.1 are referred to herein as the
"Operative Documents."
1.3. Rights of Purchaser.
--------------------
The Capital Securities shall be offered and sold by the Trust directly to
the Purchaser without registration of any of the Capital Securities, the
Debentures or the Guarantee under the Securities Act of 1933, as amended (the
"Securities Act"), or any other applicable securities laws in reliance upon
exemptions from the registration requirements of the Securities Act and other
applicable securities laws. The Offerors agree that this Agreement shall be
incorporated by reference into the Subscription Agreement and the Purchaser
shall be entitled to each of the benefits of the Placement Agents and the
Purchaser under this Agreement and shall be entitled to enforce obligations of
the Offerors under this Agreement as fully as if the Purchaser were a party to
this Agreement. The Offerors and the Placement Agents have entered into this
Agreement to set forth their understanding as to their relationship and their
respective rights, duties and obligations.
1.4. Legends.
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Upon original issuance thereof, and until such time as the same is no
longer required under the applicable requirements of the Securities Act, the
Capital Securities and Debentures certificates shall each contain a legend as
required pursuant to any of the Operative Documents.
Section 2. Purchase of Capital Securities.
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2.1. Exclusive Rights; Purchase Price.
--------------------------------
From the date hereof until the Closing Date (which date may be extended by
mutual agreement of the Offerors and the Placement Agents), the Offerors hereby
grant to the Placement Agents the exclusive right to arrange for the sale of the
Capital Securities to the Purchaser at a purchase price of $1,000.00 per Capital
Security.
2.2. Subscription Agreement.
---------------------
The Offerors hereby agree to evidence their acceptance of the subscription
by countersigning a copy of the Subscription Agreement and returning the same to
the Placement Agents.
2.3. Closing and Delivery of Payment.
--------------------------------
2.3.1. Closing; Closing Date.
----------------------
The sale and purchase of the Capital Securities by the Offerors to the
Purchaser shall take place at a closing (the "Closing") at the offices of ▇▇▇▇▇,
▇▇▇▇ & ▇▇▇▇▇▇▇▇, ▇.▇., at 10:00 a.m. (St. Louis time) on September 17, 2003, or
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such other business day as may be agreed upon by the Offerors and the Placement
Agents (the "Closing Date"); provided, however, that in no event shall the
Closing Date occur later than September 30, 2003 unless consented to by the
Purchaser. Payment by the Purchaser shall be payable in the manner set forth in
the Subscription Agreement and shall be made prior to or on the Closing Date.
2.3.2. Delivery.
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The certificate for the Capital Securities shall be in definitive form,
registered in the name of the Purchaser and in the aggregate amount of the
Capital Securities purchased by the Purchaser.
2.3.3. Transfer Agent.
---------------
The Offerors shall deposit the certificate representing the Capital
Securities with the Institutional Trustee or other appropriate party prior to
the Closing Date.
2.4. Placement Agents' Fees and Expenses.
------------------------------------
2.4.1. Placement Agents' Compensation.
-------------------------------
Because the proceeds from the sale of the Capital Securities shall be used
to purchase the Debentures from the Company, the Company shall pay an aggregate
of $30.00 for each $1,000.00 of principal amount of Debentures sold to the Trust
(excluding the Debentures related to the Common Securities purchased by the
Company). Of this amount, $15.00 for each $1,000.00 of principal amount of
Debentures shall be payable to FTN Financial Capital Markets and $15.00 for each
$1,000.00 of principal amount of Debentures shall be payable to ▇▇▇▇▇, ▇▇▇▇▇▇▇▇
& ▇▇▇▇▇, Inc. Such amount shall be delivered to the Trustee or such other person
designated by the Placement Agents on the Closing Date and shall be allocated
between and paid to the respective Placement Agents as directed by the Placement
Agents.
2.4.2. Costs and Expenses.
-------------------
Whether or not this Agreement is terminated or the sale of the Capital
Securities is consummated, the Company hereby covenants and agrees that it shall
pay or cause to be paid (directly or by reimbursement) all reasonable costs and
expenses incident to the performance of the obligations of the Offerors under
this Agreement, including all fees, expenses and disbursements of counsel and
accountants for the Offerors; all reasonable expenses incurred by the Offerors
incident to the preparation, execution and delivery of the Trust Agreement, the
Indenture, and the Guarantee; and all other reasonable costs and expenses
incident to the performance of the obligations of the Company hereunder and
under the Trust Agreement.
2.5. Failure to Close.
-----------------
If any of the conditions to the Closing specified in this Agreement shall
not have been fulfilled to the satisfaction of the Placement Agents or if the
Closing shall not have occurred on or before 10:00 a.m. (St. Louis time) on
September 30, 2003, then each party hereto, notwithstanding anything to the
contrary in this Agreement, shall be relieved of all further obligations under
this Agreement without thereby waiving any rights it may have by reason of such
nonfulfillment or failure; provided, however, that the obligations of the
parties under Sections 2.4.2, 7.5 and 9 shall not be so relieved and shall
continue in full force and effect.
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Section 3. Closing Conditions.
------------------
The obligations of the Purchaser and the Placement Agents on the Closing
Date shall be subject to the accuracy, at and as of the Closing Date, of the
representations and warranties of the Offerors contained in this Agreement, to
the accuracy, at and as of the Closing Date, of the statements of the Offerors
made in any certificates pursuant to this Agreement, to the performance by the
Offerors of their respective obligations under this Agreement, to compliance, at
and as of the Closing Date, by the Offerors with their respective agreements
herein contained, and to the following further conditions:
3.1. Opinions of Counsel.
--------------------
On the Closing Date, the Placement Agents shall have received the following
favorable opinions, each dated as of the Closing Date: (a) from ▇▇▇▇▇▇▇▇ &
English, LLP, counsel for the Offerors and addressed to the Purchaser and the
Placement Agents in substantially the form set forth on Exhibit B-1 attached
hereto and incorporated herein by this reference, (b) from ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
LLP, special Connecticut counsel to the Offerors and addressed to the Purchaser,
the Placement Agents and the Offerors, in substantially the form set forth on
Exhibit B-2 attached hereto and incorporated herein by this reference and (c)
from ▇▇▇▇▇, Rice & ▇▇▇▇▇▇▇▇, ▇.▇., special tax counsel to the Offerors, and
addressed to the Placement Agents and the Offerors, in substantially the form
set forth on Exhibit B-3 attached hereto and incorporated herein by this
reference, subject to the receipt by ▇▇▇▇▇, Rice & ▇▇▇▇▇▇▇▇, ▇.▇. of a
representation letter from the Company in the form set forth in Exhibit B-3
completed in a manner reasonably satisfactory to ▇▇▇▇▇, Rice & ▇▇▇▇▇▇▇▇, ▇.▇.
(collectively, the "Offerors' Counsel Opinions"). In rendering the Offerors'
Counsel Opinions, counsel to the Offerors may rely as to factual matters upon
certificates or other documents furnished by officers, directors and trustees of
the Offerors (copies of which shall be delivered to the Placement Agents and the
Purchaser) and by government officials, and upon such other documents as counsel
to the Offerors may, in their reasonable opinion, deem appropriate as a basis
for the Offerors' Counsel Opinions. Counsel to the Offerors may specify the
jurisdictions in which they are admitted to practice and that they are not
admitted to practice in any other jurisdiction and are not experts in the law of
any other jurisdiction. If the Offerors' counsel is not admitted to practice in
the State of New York, the opinion of Offerors' counsel may assume, for purposes
of the opinion, that the laws of the State of New York are substantively
identical, in all respects material to the opinion, to the internal laws of the
state in which such counsel is admitted to practice. Such Offerors' Counsel
Opinions shall not state that they are to be governed or qualified by, or that
they are otherwise subject to, any treatise, written policy or other document
relating to legal opinions, including, without limitation, the Legal Opinion
Accord of the ABA Section of Business Law (1991).
3.2. Officer's Certificate.
----------------------
At the Closing Date, the Purchaser and the Placement Agents shall have
received certificates from the Chief Executive Officer of the Company, dated as
of the Closing Date, stating that (i) the representations and warranties of the
Offerors set forth in Section 5 hereof are true and correct as of the Closing
Date and that the Offerors have complied with all agreements and satisfied all
conditions on their part to be performed or satisfied at or prior to the Closing
Date, (ii) since the date of this Agreement the Offerors have not incurred any
liability or obligation, direct or contingent, or entered into any material
transactions, other than in the ordinary course of business, which is material
to the Offerors, and (iii) covering such other matters as the Placement Agents
may reasonably request.
3.3. Administrator's Certificate.
----------------------------
At the Closing Date, the Purchaser and the Placement Agents shall have
received a certificate of one or more Administrators of the Trust, dated as of
the Closing Date, stating that the representations and warranties of the Trust
set forth in Section 5 are true and correct as of the Closing Date and that the
Trust has complied with all agreements and satisfied all conditions on its part
to be performed or satisfied at or prior to the Closing Date.
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3.4. Purchase Permitted by Applicable Laws; Legal Investment.
--------------------------------------------------------
The purchase of and payment for the Capital Securities as described in this
Agreement and pursuant to the Subscription Agreement shall (a) not be prohibited
by any applicable law or governmental regulation, (b) not subject the Purchaser
or the Placement Agents to any penalty or, in the reasonable judgment of the
Purchaser and the Placement Agents, other onerous conditions under or pursuant
to any applicable law or governmental regulation, and (c) be permitted by the
laws and regulations of the jurisdictions to which the Purchaser and the
Placement Agents are subject.
3.5. Consents and Permits.
---------------------
The Company and the Trust shall have received all consents, permits and
other authorizations, and made all such filings and declarations, as may be
required from any person or entity pursuant to any law, statute, regulation or
rule (federal, state, local and foreign), or pursuant to any agreement, order or
decree to which the Company or the Trust is a party or to which either is
subject, in connection with the transactions contemplated by this Agreement.
3.6. Sale of Purchaser Securities.
-----------------------------
The Purchaser shall have sold securities issued by the Purchaser in an
amount such that the net proceeds of such sale shall be (i) available on the
Closing Date and (ii) in an amount sufficient to purchase the Capital Securities
and all other capital or similar securities contemplated in agreements similar
to this Agreement and the Subscription Agreement.
3.7. Information.
-----------
Prior to or on the Closing Date, the Offerors shall have furnished to the
Placement Agents such further information, certificates, opinions and documents
addressed to the Purchaser and the Placement Agents, which the Placement Agents
may reasonably request, including, without limitation, a complete set of the
Operative Documents or any other documents or certificates required by this
Section 3; and all proceedings taken by the Offerors in connection with the
issuance, offer and sale of the Capital Securities as herein contemplated shall
be reasonably satisfactory in form and substance to the Placement Agents.
If any condition specified in this Section 3 shall not have been fulfilled
when and as required in this Agreement, or if any of the opinions or
certificates mentioned above or elsewhere in this Agreement shall not be
reasonably satisfactory in form and substance to the Placement Agents, this
Agreement may be terminated by the Placement Agents by notice to the Offerors at
any time at or prior to the Closing Date. Notice of such termination shall be
given to the Offerors in writing or by telephone or facsimile confirmed in
writing.
Section 4. Conditions to the Offerors' Obligations.
---------------------------------------
The obligations of the Offerors to sell the Capital Securities to the
Purchaser and consummate the transactions contemplated by this Agreement shall
be subject to the accuracy, at and as of the Closing Date, of the
representations and warranties of the Placement Agents contained in this
Agreement and to the following further conditions:
4.1. Executed Agreement.
-------------------
The Offerors shall have received from the Placement Agents an executed copy
of this Agreement.
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4.2. Fulfillment of Other Obligations.
--------------------------------
The Placement Agents shall have fulfilled all of their other obligations
and duties required to be fulfilled under this Agreement prior to or at the
Closing.
Section 5. Representations and Warranties of the Offerors.
----------------------------------------------
Except as set forth on the Disclosure Schedule (as defined in Section 11.1)
attached hereto, if any, the Offerors jointly and severally represent and
warrant to the Placement Agents and the Purchaser as of the date hereof and as
of the Closing Date as follows:
5.1. Securities Law Matters.
----------------------
(a)
Neither the Company nor the Trust, nor any of their "Affiliates" (as
defined in Rule 501(b) of Regulation D under the Securities Act ("Regulation
D")), nor any person acting on any of their behalf has, directly or indirectly,
made offers or sales of any security, or solicited offers to buy any security,
under circumstances that would require the registration under the Securities Act
of any of the Capital Securities, the Guarantee or the Debentures (collectively,
the "Securities") or any other securities to be issued, or which may be issued,
by the Purchaser.
(b)
Neither the Company nor the Trust, nor any of their Affiliates, nor any
person acting on its or their behalf has (i) other than the Placement Agents,
offered for sale or solicited offers to purchase the Securities, (ii) engaged or
will engage, in any "directed selling efforts" within the meaning of Regulation
S under the Securities Act ("Regulation S") with respect to the Securities, or
(iii) engaged in any form of offering, general solicitation or general
advertising (within the meaning of Regulation D) in connection with any offer or
sale of any of the Securities.
(c)
The Securities satisfy the eligibility requirements of Rule 144A(d)(3)
under the Securities Act.
(d)
Neither the Company nor the Trust is or, after giving effect to the
offering and sale of the Capital Securities and the consummation of the
transactions described in this Agreement, will be an "investment company" or an
entity "controlled" by an "investment company," in each case within the meaning
of Section 3(a) of the Investment Company Act of 1940, as amended (the
"Investment Company Act") without regard to Section 3(c) of the Investment
Company Act.
(e)
Neither the Company nor the Trust has paid or agreed to pay to any person
or entity (other than the Placement Agents) any compensation for soliciting
another to purchase any of the Securities.
5.2. Organization, Standing and Qualification of the Trust.
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The Trust has been duly created and is validly existing in good standing as
a statutory trust under the Connecticut Statutory Trust Act (the "Statutory
Trust Act") with the power and authority to own property and to conduct the
business it transacts and proposes to transact and to enter into and perform its
obligations under the Operative Documents. The Trust is duly qualified to
transact business as a foreign entity and is in good standing in each
jurisdiction in which such qualification is necessary, except where the failure
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to so qualify or be in good standing would not have a material adverse effect on
the Trust. The Trust is not a party to or otherwise bound by any agreement other
than the Operative Documents. The Trust is and will, under current law, be
classified for federal income tax purposes as a grantor trust and not as an
association taxable as a corporation.
5.3. Trust Agreement.
---------------
The Trust Agreement has been duly authorized by the Company and, on the
Closing Date, will have been duly executed and delivered by the Company and the
Administrators of the Trust, and, assuming due authorization, execution and
delivery by the Institutional Trustee, will be a valid and binding obligation of
the Company and such Administrators, enforceable against them in accordance with
its terms, subject to (a) applicable bankruptcy, insolvency, moratorium,
receivership, reorganization, liquidation and other laws relating to or
affecting creditors' rights generally, and (b) general principles of equity
(regardless of whether considered and applied in a proceeding in equity or at
law) ("Bankruptcy and Equity"). Each of the Administrators of the Trust is an
employee or a director of the Company or of a financial institution subsidiary
of the Company and has been duly authorized by the Company to execute and
deliver the Trust Agreement.
5.4. Guarantee Agreement and the Indenture.
--------------------------------------
Each of the Guarantee and the Indenture has been duly authorized by the
Company and, on the Closing Date will have been duly executed and delivered by
the Company, and, assuming due authorization, execution and delivery by the
Guarantee Trustee, in the case of the Guarantee, and by the Indenture Trustee,
in the case of the Indenture, will be a valid and binding obligation of the
Company enforceable against it in accordance with its terms, subject to
Bankruptcy and Equity.
5.5. Capital Securities and Common Securities.
-----------------------------------------
The Capital Securities and the Common Securities have been duly authorized
by the Trust Agreement and, when issued and delivered against payment therefor
on the Closing Date to the Purchaser, in the case of the Capital Securities, and
to the Company, in the case of the Common Securities, will be validly issued and
represent undivided beneficial interests in the assets of the Trust. None of the
Capital Securities or the Common Securities is subject to preemptive or other
similar rights. On the Closing Date, all of the issued and outstanding Common
Securities will be directly owned by the Company free and clear of any pledge,
security interest, claim, lien or other encumbrance.
5.6. Debentures.
-----------
The Debentures have been duly authorized by the Company and, at the Closing
Date, will have been duly executed and delivered to the Indenture Trustee for
authentication in accordance with the Indenture, and, when authenticated in the
manner provided for in the Indenture and delivered against payment therefor by
the Trust, will constitute valid and binding obligations of the Company entitled
to the benefits of the Indenture enforceable against the Company in accordance
with their terms, subject to Bankruptcy and Equity.
5.7. Power and Authority.
-------------------
This Agreement has been duly authorized, executed and delivered by the
Company and the Trust and constitutes the valid and binding obligation of the
Company and the Trust, enforceable against the Company and the Trust in
accordance with its terms, subject to Bankruptcy and Equity.
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5.8. No Defaults.
------------
The Trust is not in violation of the Trust Agreement or, to the knowledge
of the Administrators, any provision of the Statutory Trust Act. The execution,
delivery and performance by the Company or the Trust of this Agreement or the
Operative Documents to which it is a party, and the consummation of the
transactions contemplated herein or therein and the use of the proceeds
therefrom, will not conflict with or constitute a breach of, or a default under,
or result in the creation or imposition of any lien, charge or other encumbrance
upon any property or assets of the Trust, the Company or any of the Company's
Subsidiaries (as defined in Section 5.11 hereof) pursuant to any contract,
indenture, mortgage, loan agreement, note, lease or other instrument to which
the Trust, the Company or any of its Subsidiaries is a party or by which it or
any of them may be bound, or to which any of the property or assets of any of
them is subject, except for a conflict, breach, default, lien, charge or
encumbrance which could not, singly or in the aggregate, reasonably be expected
to have a Material Adverse Effect nor will such action result in any violation
of the Trust Agreement or the Statutory Trust Act or require the consent,
approval, authorization or order of any court or governmental agency or body. As
used herein, the term "Material Adverse Effect" means any one or more effects
that individually or in the aggregate are material and adverse to the Offeror's
ability to consummate the transactions contemplated herein or in the Operative
Documents or any one or more effects that individually or in the aggregate are
material and adverse to the condition (financial or otherwise), earnings,
affairs, business, prospects or results of operations of the Company and its
Subsidiaries taken as whole, whether or not occurring in the ordinary course of
business.
5.9. Organization, Standing and Qualification of the Company.
-------------------------------------------------------
The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of New Jersey, with all requisite
corporate power and authority to own its properties and conduct the business it
transacts and proposes to transact, and is duly qualified to transact business
and is in good standing as a foreign corporation in each jurisdiction where the
nature of its activities requires such qualification, except where the failure
of the Company to be so qualified would not, singly or in the aggregate, have a
Material Adverse Effect.
5.10. Subsidiaries of the Company.
----------------------------
Each of the Company's significant subsidiaries (as defined in Section
1-02(w) of Regulation S-X to the Securities Act (the "Significant
Subsidiaries")) is listed in Exhibit C attached hereto and incorporated herein
by this reference. Each Significant Subsidiary has been duly organized and is
validly existing and in good standing under the laws of the jurisdiction in
which it is chartered or organized, with all requisite power and authority to
own its properties and conduct the business it transacts and proposes to
transact, and is duly qualified to transact business and is in good standing as
a foreign entity in each jurisdiction where the nature of its activities
requires such qualification, except where the failure of any such Significant
Subsidiary to be so qualified would not, singly or in the aggregate, have a
Material Adverse Effect. All of the issued and outstanding shares of capital
stock of the Significant Subsidiaries (a) have been duly authorized and are
validly issued, (b) are fully paid and nonassessable, and (c) are wholly owned,
directly or indirectly, by the Company free and clear of any security interest,
mortgage, pledge, lien, encumbrance, restriction upon voting or transfer,
preemptive rights, claim, equity or other defect.
5.11. Permits.
---------
The Company and each of its subsidiaries (as defined in Section 1-02(x) of
Regulation S-X to the Securities Act) (the "Subsidiaries") have all requisite
power and authority, and all necessary authorizations, approvals, orders,
licenses, certificates and permits of and from regulatory or governmental
officials, bodies and tribunals, to own or lease their respective properties and
to conduct their respective businesses as now being conducted, except such
authorizations, approvals, orders, licenses, certificates and permits which, if
not obtained and maintained, would not, singly or in the aggregate, have a
Material Adverse Effect, and neither the Company nor any of its Subsidiaries has
received any notice of proceedings relating to the revocation or modification of
any such authorizations, approvals, orders, licenses, certificates or permits
which, singly or in the aggregate, if the failure to be so licensed or approved
is the subject of an unfavorable decision, ruling or finding, would, singly or
in the aggregate, have a Material Adverse Effect; and the Company and its
Subsidiaries are in compliance with all applicable laws, rules, regulations and
orders and consents, the violation of which would, singly or in the aggregate,
have a Material Adverse Effect.
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5.12. Conflicts, Authorizations and Approvals.
----------------------------------------
Neither the Company nor any of its Subsidiaries is in violation of its
respective articles or certificate of incorporation, charter or by-laws or
similar organizational documents or in default in the performance or observance
of any obligation, agreement, covenant or condition contained in any contract,
indenture, mortgage, loan agreement, note, lease or other agreement or
instrument to which either the Company or any of its Subsidiaries is a party, or
by which it or any of them may be bound or to which any of the property or
assets of the Company or any of its Subsidiaries is subject, the effect of which
violation or default in performance or observance would have, singly or in the
aggregate, a Material Adverse Effect.
5.13. Holding Company Registration and Deposit Insurance.
---------------------------------------------------
The Company is duly registered (i) as a bank holding company or financial
holding company under the Bank Holding Company Act of 1956, as amended, and the
regulations of the Board of Governors of the Federal Reserve System (the
"Federal Reserve") or (ii) as a savings and loan holding company under the Home
Owners' Loan Act of 1933, as amended, and the regulations of the Office of
Thrift Supervision (the "OTS"), and the deposit accounts of the Company's
Subsidiary depository institutions are insured by the Federal Deposit Insurance
Corporation ("FDIC") to the fullest extent permitted by law and the rules and
regulations of the FDIC, and no proceedings for the termination of such
insurance are pending or threatened.
5.14. Financial Statements.
---------------------
(a)
The consolidated balance sheets of the Company and all of its Subsidiaries
as of December 31, 2002 and December 31, 2001 and related consolidated income
statements and statements of changes in shareholders' equity for the 3 years
ended December 31, 2002 together with the notes thereto, and the consolidated
balance sheets of the Company and all of its Subsidiaries as of June 30, 2003
and the related consolidated income statements and statements of changes in
shareholders' equity for the 6 months then ended, copies of each of which have
been provided to the Placement Agents (together, the "Financial Statements"),
have been prepared in accordance with generally accepted accounting principles
applied on a consistent basis (except as may be disclosed therein) and fairly
present in all material respects the financial position and the results of
operations and changes in shareholders' equity of the Company and all of its
Subsidiaries as of the dates and for the periods indicated (subject, in the case
of interim financial statements, to normal recurring year-end adjustments, none
of which shall be material). The books and records of the Company and all of its
Subsidiaries have been, and are being, maintained in all material respects in
accordance with generally accepted accounting principles and any other
applicable legal and accounting requirements and reflect only actual
transactions.
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(b)
The information in the Company's most recently filed (i) FR Y-9C filed with
the Federal Reserve if the Company is a bank holding company, (ii) FR Y-9SP
filed with the Federal Reserve if the Company is a small bank holding company or
(iii) H-(b)11 filed with the OTS if the Company is a savings and loan holding
company (the "Regulatory Report"), previously provided to the Placement Agents
fairly presents in all material respects the financial position of the Company
and, where applicable, all of its Subsidiaries as of the end of the period
represented by such Regulatory Report.
(c)
Since the respective dates of the Financial Statements and the Regulatory
Report, there has been no material adverse change or development with respect to
the financial condition or earnings of the Company and all of its Subsidiaries,
taken as a whole.
(d)
The accountants of the Company who certified the Financial Statements are
independent public accountants of the Company and its Subsidiaries within the
meaning of the Securities Act and the rules and regulations thereunder.
5.15. Regulatory Enforcement Matters.
--------------------------------
Neither the Company nor any of its Subsidiaries is subject or is party to,
or has received any notice or advice that any of them may become subject or
party to, any investigation with respect to, any cease-and-desist order,
agreement, consent agreement, memorandum of understanding or other regulatory
enforcement action, proceeding or order with or by, or is a party to any
commitment letter or similar undertaking to, or is subject to any directive by,
or has been since January 1, 2000, a recipient of any supervisory letter from,
or since January 1, 2000, has adopted any board resolutions at the request of,
any Regulatory Agency (as defined below) that currently restricts in any
material respect the conduct of their business or that in any material manner
relates to their capital adequacy, their credit policies, their ability or
authority to pay dividends or make distributions to their shareholders or make
payments of principal or interest on their debt obligations, their management or
their business (each, a "Regulatory Agreement"), nor has the Company or any of
its Subsidiaries been advised since January 1, 2000, by any Regulatory Agency
that it is considering issuing or requesting any such Regulatory Agreement.
There is no material unresolved violation, criticism or exception by any
Regulatory Agency with respect to any report or statement relating to any
examinations of the Company or any of its Subsidiaries. As used herein, the term
"Regulatory Agency" means any federal or state agency charged with the
supervision or regulation of depository institutions, bank, financial or savings
and loan holding companies, or engaged in the insurance of depository
institution deposits, or any court, administrative agency or commission or other
governmental agency, authority or instrumentality having supervisory or
regulatory authority with respect to the Company or any of its Subsidiaries.
Neither the Company nor any of its Subsidiaries is restricted, prohibited or
otherwise limited, whether by statute or otherwise, in their ability or
authority to pay dividends or make distributions to their shareholders or make
payments of principal or interest on their debt obligations, and no event has
occurred or circumstance exists that would be reasonably likely to give rise to
or serve as the basis for any such restriction, prohibition or limitation.
5.16. No Material Change.
--------------------
Since December 31, 2002, there has been no material adverse change or
development with respect to the condition (financial or otherwise), earnings,
affairs, business, prospects or results of operations of the Company or its
Subsidiaries on a consolidated basis, whether or not arising in the ordinary
course of business.
10
5.17. No Undisclosed Liabilities.
---------------------------
Neither the Company nor any of its Subsidiaries has any material liability,
whether known or unknown, whether asserted or unasserted, whether absolute or
contingent, whether accrued or unaccrued, whether liquidated or unliquidated,
and whether due or to become due, including any liability for taxes (and there
is no past or present fact, situation, circumstance, condition or other basis
for any present or future action, suit, proceeding, hearing, charge, complaint,
claim or demand against the Company or its Subsidiaries giving rise to any such
liability), except (i) for liabilities set forth in the Financial Statements and
(ii) normal fluctuation in the amount of the liabilities referred to in clause
(i) above occurring in the ordinary course of business of the Company and all of
its Subsidiaries since the date of the most recent balance sheet included in the
Financial Statements.
5.18. Litigation.
----------
No charge, investigation, action, suit or proceeding is pending or, to the
knowledge of the Offerors, threatened, against or affecting the Company or its
Subsidiaries or any of their respective properties before or by any courts or
any regulatory, administrative or governmental official, commission, board,
agency or other authority or body, or any arbitrator, wherein an unfavorable
decision, ruling or finding could have, singly or in the aggregate, a Material
Adverse Effect.
5.19. Deferral of Interest Payments on Debentures.
---------------------------------------------
The Company has no present intention to exercise its option to defer
payments of interest on the Debentures as provided in the Indenture. The Company
believes that the likelihood that it would exercise its right to defer payments
of interest on the Debentures as provided in the Indenture at any time during
which the Debentures are outstanding is remote because of the restrictions that
would be imposed on the Company's ability to declare or pay dividends or
distributions on, or to redeem, purchase, acquire or make a liquidation payment
with respect to, any of the Company's capital stock and on the Company's ability
to make any payments of principal, interest or premium on, or repay, repurchase
or redeem, any of its debt securities that rank pari passu in all respects with,
or junior in interest to, the Debentures.
Section 6. Representations and Warranties of the Placement Agents.
------------------------------------------------------
Each Placement Agent represents and warrants to the Offerors as to itself
(but not as to the other Placement Agent) as follows:
6.1. Organization, Standing and Qualification.
----------------------------------------
(a)
FTN Financial Capital Markets is a division of First Tennessee Bank
National Association, a national banking association duly organized, validly
existing and in good standing under the laws of the United States, with full
power and authority to own, lease and operate its properties and conduct its
business as currently being conducted. FTN Financial Capital Markets is duly
qualified to transact business as a foreign corporation and is in good standing
in each other jurisdiction in which it owns or leases property or conducts its
business so as to require such qualification and in which the failure to so
qualify would, individually or in the aggregate, have a material adverse effect
on the condition (financial or otherwise), earnings, business, prospects or
results of operations of FTN Financial Capital Markets.
11
(b)
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, Inc. is a corporation duly organized, validly
existing and in good standing under the laws of the State of New York, with full
power and authority to own, lease and operate its properties and conduct its
business as currently being conducted. ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, Inc. is duly
qualified to transact business as a foreign corporation and is in good standing
in each other jurisdiction in which it owns or leases property or conducts its
business so as to require such qualification and in which the failure to so
qualify would, individually or in the aggregate, have a material adverse effect
on the condition (financial or otherwise), earnings, business, prospects or
results of operations of ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, Inc.
6.2. Power and Authority.
-------------------
The Placement Agent has all requisite power and authority to enter into
this Agreement, and this Agreement has been duly and validly authorized,
executed and delivered by the Placement Agent and constitutes the legal, valid
and binding agreement of the Placement Agent, enforceable against the Placement
Agent in accordance with its terms, subject to Bankruptcy and Equity and except
as any indemnification or contribution provisions thereof may be limited under
applicable securities laws.
6.3. General Solicitation.
--------------------
In the case of the offer and sale of the Capital Securities, no form of
general solicitation or general advertising was used by the Placement Agent or
its representatives including, but not limited to, advertisements, articles,
notices or other communications published in any newspaper, magazine or similar
medium or broadcast over television or radio or any seminar or meeting whose
attendees have been invited by any general solicitation or general advertising.
Neither the Placement Agent nor its representatives have engaged or will engage
in any "directed selling efforts" within the meaning of Regulation S with
respect to the Capital Securities.
6.4. Purchaser.
---------
The Placement Agent has made such reasonable inquiry as is necessary to
determine that the Purchaser is acquiring the Capital Securities for its own
account, that the Purchaser does not intend to distribute the Capital Securities
in contravention of the Securities Act or any other applicable securities laws,
and that the Purchaser is not a "U.S. person" as that term is defined under Rule
902 of the Securities Act.
6.5. Qualified Purchasers.
--------------------
The Placement Agent has not offered or sold and will not arrange for the
offer or sale of the Capital Securities except (i) in an offshore transaction
complying with Rule 903 of Regulation S, or (ii) to those the Placement Agent
reasonably believes are "accredited investors" (as defined in Rule 501 of
Regulation D), or (iii) in any other manner that does not require registration
of the Capital Securities under the Securities Act. In connection with each such
sale, the Placement Agent has taken or will take reasonable steps to ensure that
the Purchaser is aware that (a) such sale is being made in reliance on an
exemption under the Securities Act and (b) future transfers of the Capital
Securities will not be made except in compliance with applicable securities
laws.
6.6. Offering Circulars.
------------------
Neither the Placement Agent nor its representatives will include any
non-public information about the Company, the Trust or any of their affiliates
in any registration statement, prospectus, offering circular or private
placement memorandum used in connection with any purchase of Capital Securities
without the prior written consent of the Trust and the Company.
12
Section 7. Covenants of the Offerors.
--------------------------
The Offerors covenant and agree with the Placement Agents and the Purchaser
as follows:
7.1. Compliance with Representations and Warranties.
----------------------------------------------
During the period from the date of this Agreement to the Closing Date, the
Offerors shall use their best efforts and take all action necessary or
appropriate to cause their representations and warranties contained in Section 5
hereof to be true as of the Closing Date, after giving effect to the
transactions contemplated by this Agreement, as if made on and as of the Closing
Date.
7.2. Sale and Registration of Securities.
-----------------------------------
The Offerors and their Affiliates shall not nor shall any of them permit
any person acting on their behalf (other than the Placement Agents), to directly
or indirectly (i) sell, offer for sale or solicit offers to buy or otherwise
negotiate in respect of any security (as defined in the Securities Act) that
would or could be integrated with the sale of the Capital Securities in a manner
that would require the registration under the Securities Act of the Securities
or (ii) make offers or sales of any such Security, or solicit offers to buy any
such Security, under circumstances that would require the registration of any of
such Securities under the Securities Act.
7.3. Use of Proceeds.
---------------
The Trust shall use the proceeds from the sale of the Capital Securities to
purchase the Debentures from the Company.
7.4. Investment Company.
------------------
The Offerors shall not engage, or permit any Subsidiary to engage, in any
activity which would cause it or any Subsidiary to be an "investment company"
under the provisions of the Investment Company Act.
7.5. Reimbursement of Expenses.
-------------------------
If the sale of the Capital Securities provided for herein is not
consummated (i) because any condition set forth in Section 3 hereof is not
satisfied, or (ii) because of any refusal, inability or failure on the part of
the Company or the Trust to perform any agreement herein or comply with any
provision hereof other than by reason of a breach by the Placement Agents, the
Company shall reimburse the Placement Agents upon demand for all of their pro
rata share of out-of-pocket expenses (including reasonable fees and
disbursements of counsel) in an amount not to exceed $50,000.00 that shall have
been incurred by them in connection with the proposed purchase and sale of the
Capital Securities. Notwithstanding the foregoing, the Company shall have no
obligation to reimburse the Placement Agents for their out-of-pocket expenses if
the sale of the Capital Securities fails to occur because the condition set
forth in Section 3.6 is not satisfied or because either of the Placement Agents
fails to fulfill a condition set forth in Section 4.
7.6. Directed Selling Efforts, Solicitation and Advertising.
------------------------------------------------------
In connection with any offer or sale of any of the Securities, the Offerors
shall not, nor shall either of them permit any of their Affiliates or any person
acting on their behalf, other than the Placement Agents, to, (i) engage in any
"directed selling efforts" within the meaning of Regulation S, or (ii) engage in
any form of general solicitation or general advertising (as defined in
Regulation D).
13
7.7. Compliance with Rule 144A(d)(4) under the Securities Act.
--------------------------------------------------------
So long as any of the Securities are outstanding and are "restricted
securities" within the meaning of Rule 144(a)(3) under the Securities Act, the
Offerors will, during any period in which they are not subject to and in
compliance with Section 13 or 15(d) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), or the Offerors are not exempt from such reporting
requirements pursuant to and in compliance with Rule 12g3-2(b) under the
Exchange Act, provide to each holder of such restricted securities and to each
prospective purchaser (as designated by such holder) of such restricted
securities, upon the request of such holder or prospective purchaser in
connection with any proposed transfer, any information required to be provided
by Rule 144A(d)(4) under the Securities Act, if applicable. This covenant is
intended to be for the benefit of the holders, and the prospective purchasers
designated by such holders, from time to time of such restricted securities. The
information provided by the Offerors pursuant to this Section 7.7 will not, at
the date thereof, contain any untrue statement of a material fact or omit to
state any material fact necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading.
7.8. Quarterly Reports.
------------------
Within 50 days of the end of each calendar year quarter and within 100 days
of the end of each calendar year during which the Debentures are issued and
outstanding, the Offerors shall submit to The Bank of New York a completed
quarterly report in the form attached hereto as Exhibit D. The Offerors
acknowledge and agree that The Bank of New York and its successors and assigns
is a third party beneficiary of this Section 7.8
Section 8. Covenants of the Placement Agents.
----------------------------------
The Placement Agents covenant and agree with the Offerors that, during the
period from the date of this Agreement to the Closing Date, the Placement Agents
shall use their best efforts and take all action necessary or appropriate to
cause their representations and warranties contained in Section 6 to be true as
of Closing Date, after giving effect to the transactions contemplated by this
Agreement, as if made on and as of the Closing Date. The Placement Agents
further covenant and agree not to engage in hedging transactions with respect to
the Capital Securities unless such transactions are conducted in compliance with
the Securities Act.
Section 9. Indemnification.
-----------------
9.1. Indemnification Obligation.
--------------------------
The Offerors shall jointly and severally indemnify and hold harmless the
Placement Agents and the Purchaser and each of their respective agents,
employees, officers and directors and each person that controls either of the
Placement Agents or the Purchaser within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act, and agents, employees,
officers and directors or any such controlling person of either of the Placement
Agents or the Purchaser (each such person or entity, an "Indemnified Party")
from and against any and all losses, claims, damages, judgments, liabilities or
expenses, joint or several, to which such Indemnified Party may become subject
under the Securities Act, the Exchange Act or other federal or state statutory
law or regulation, or at common law or otherwise (including in settlement of any
litigation, if such settlement is effected with the written consent of the
Offerors), insofar as such losses, claims, damages, judgments, liabilities or
expenses (or actions in respect thereof) arise out of, or are based upon, or
relate to, in whole or in part, (a) any untrue statement or alleged untrue
statement of a material fact contained in any information (whether written or
oral) or documents executed in favor of, furnished or made available to the
Placement Agents or the Purchaser by the Offerors, or (b) any omission or
alleged omission to state in any information (whether written or oral) or
14
documents executed in favor of, furnished or made available to the Placement
Agents or the Purchaser by the Offerors a material fact required to be stated
therein or necessary to make the statements therein not misleading, and shall
reimburse each Indemnified Party for any legal and other expenses as such
expenses are reasonably incurred by such Indemnified Party in connection with
investigating, defending, settling, compromising or paying any such loss, claim,
damage, judgments, liability, expense or action described in this Section 9.1.
In addition to their other obligations under this Section 9, the Offerors hereby
agree that, as an interim measure during the pendency of any claim, action,
investigation, inquiry or other proceeding arising out of, or based upon, or
related to the matters described above in this Section 9.1, they shall reimburse
each Indemnified Party on a quarterly basis for all reasonable legal or other
expenses incurred in connection with investigating or defending any such claim,
action, investigation, inquiry or other proceeding, notwithstanding the absence
of a judicial determination as to the propriety and enforceability of the
possibility that such payments might later be held to have been improper by a
court of competent jurisdiction. To the extent that any such interim
reimbursement payment is so held to have been improper, each Indemnified Party
shall promptly return such amounts to the Offerors together with interest,
determined on the basis of the prime rate (or other commercial lending rate for
borrowers of the highest credit standing) announced from time to time by First
Tennessee Bank National Association (the "Prime Rate"). Any such interim
reimbursement payments which are not made to an Indemnified Party within 30 days
of a request for reimbursement shall bear interest at the Prime Rate from the
date of such request.
9.2. Conduct of Indemnification Proceedings.
--------------------------------------
Promptly after receipt by an Indemnified Party under this Section 9 of
notice of the commencement of any action, such Indemnified Party shall, if a
claim in respect thereof is to be made against the Offerors under this Section
9, notify the Offerors in writing of the commencement thereof; but, subject to
Section 9.4, the omission to so notify the Offerors shall not relieve them from
any liability pursuant to Section 9.1 which the Offerors may have to any
Indemnified Party unless and to the extent that the Offerors did not otherwise
learn of such action and such failure by the Indemnified Party results in the
forfeiture by the Offerors of substantial rights and defenses. In case any such
action is brought against any Indemnified Party and such Indemnified Party seeks
or intends to seek indemnity from the Offerors, the Offerors shall be entitled
to participate in, and, to the extent that they may wish, to assume the defense
thereof with counsel reasonably satisfactory to such Indemnified Party;
provided, however, if the defendants in any such action include both the
Indemnified Party and the Offerors and the Indemnified Party shall have
reasonably concluded that there may be a conflict between the positions of the
Offerors and the Indemnified Party in conducting the defense of any such action
or that there may be legal defenses available to it and/or other Indemnified
Parties which are different from or additional to those available to the
Offerors, the Indemnified Party shall have the right to select separate counsel
to assume such legal defenses and to otherwise participate in the defense of
such action on behalf of such Indemnified Party. Upon receipt of notice from the
Offerors to such Indemnified Party of their election to so assume the defense of
such action and approval by the Indemnified Party of counsel, the Offerors shall
not be liable to such Indemnified Party under this Section 9 for any legal or
other expenses subsequently incurred by such Indemnified Party in connection
with the defense thereof unless (i) the Indemnified Party shall have employed
such counsel in connection with the assumption of legal defenses in accordance
with the proviso in the preceding sentence (it being understood, however, that
the Offerors shall not be liable for the expenses of more than one separate
counsel representing the Indemnified Parties who are parties to such action), or
(ii) the Offerors shall not have employed counsel reasonably satisfactory to the
Indemnified Party to represent the Indemnified Party within a reasonable time
after notice of commencement of the action, in each of which cases the fees and
expenses of counsel of such Indemnified Party shall be at the expense of the
Offerors.
15
9.3. Contribution.
-------------
If the indemnification provided for in this Section 9 is required by its
terms, but is for any reason held to be unavailable to or otherwise insufficient
to hold harmless an Indemnified Party under Section 9.1 in respect of any
losses, claims, damages, liabilities or expenses referred to herein or therein,
then the Offerors shall contribute to the amount paid or payable by such
Indemnified Party as a result of any losses, claims, damages, judgments,
liabilities or expenses referred to herein (i) in such proportion as is
appropriate to reflect the relative benefits received by the Offerors, on the
one hand, and the Indemnified Party, on the other hand, from the offering of
such Capital Securities, or (ii) if the allocation provided by clause (i) above
is not permitted by applicable law, in such proportion as is appropriate to
reflect not only the relative benefits referred to in clause (i) above but also
the relative fault of the Offerors, on the one hand, and the Placement Agents,
on the other hand, in connection with the statements or omissions or
inaccuracies in the representations and warranties herein or other breaches
which resulted in such losses, claims, damages, judgments, liabilities or
expenses, as well as any other relevant equitable considerations. The respective
relative benefits received by the Offerors, on the one hand, and the Placement
Agents, on the other hand, shall be deemed to be in the same proportion, in the
case of the Offerors, as the total price paid to the Offerors for the Capital
Securities sold by the Offerors to the Purchaser (net of the compensation paid
to the Placement Agents hereunder, but before deducting expenses), and in the
case of the Placement Agents, as the compensation received by them, bears to the
total of such amounts paid to the Offerors and received by the Placement Agents
as compensation. The relative fault of the Offerors and the Placement Agents
shall be determined by reference to, among other things, whether the untrue
statement or alleged untrue statement of a material fact or the omission or
alleged omission of a material fact or the inaccurate or the alleged inaccurate
representation and/or warranty relates to information supplied by the Offerors
or the Placement Agents and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The provisions set forth in Section 9.2 with respect to notice of commencement
of any action shall apply if a claim for contribution is made under this Section
9.3; provided, however, that no additional notice shall be required with respect
to any action for which notice has been given under Section 9.2 for purposes of
indemnification. The Offerors and the Placement Agents agree that it would not
be just and equitable if contribution pursuant to this Section 9.3 were
determined by pro rata allocation or by any other method of allocation that does
not take account of the equitable considerations referred to in this Section
9.3. The amount paid or payable by an Indemnified Party as a result of the
losses, claims, damages, judgments, liabilities or expenses referred to in this
Section 9.3 shall be deemed to include, subject to the limitations set forth
above, any legal or other expenses reasonably incurred by such Indemnified Party
in connection with investigating or defending any such action or claim. In no
event shall the liability of the Placement Agents hereunder be greater in amount
than the dollar amount of the compensation (net of payment of all expenses)
received by the Placement Agents upon the sale of the Capital Securities giving
rise to such obligation. No person found guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not found guilty of such fraudulent
misrepresentation.
9.4. Additional Remedies.
--------------------
The indemnity and contribution agreements contained in this Section 9 are
in addition to any liability that the Offerors may otherwise have to any
Indemnified Party.
9.5. Additional Indemnification.
--------------------------
The Company shall indemnify and hold harmless the Trust against all loss,
liability, claim, damage and expense whatsoever, as due from the Trust under
Sections 9.1 through 9.4 hereof.
Section 10. Rights and Responsibilities of Placement Agents.
-----------------------------------------------
16
10.1. Reliance.
----------
In performing their duties under this Agreement, the Placement Agents shall
be entitled to rely upon any notice, signature or writing which they shall in
good faith believe to be genuine and to be signed or presented by a proper party
or parties. The Placement Agents may rely upon any opinions or certificates or
other documents delivered by the Offerors or their counsel or designees to
either the Placement Agents or the Purchaser.
10.2. Rights of Placement Agents.
----------------------------
In connection with the performance of their duties under this Agreement,
the Placement Agents shall not be liable for any error of judgment or any action
taken or omitted to be taken unless the Placement Agents were grossly negligent
or engaged in willful misconduct in connection with such performance or
non-performance. No provision of this Agreement shall require the Placement
Agents to expend or risk their own funds or otherwise incur any financial
liability on behalf of the Purchaser in connection with the performance of any
of their duties hereunder. The Placement Agents shall be under no obligation to
exercise any of the rights or powers vested in them by this Agreement.
Section 11. Miscellaneous.
--------------
11.1. Disclosure Schedule.
---------------------
The term "Disclosure Schedule," as used herein, means the schedule, if any,
attached to this Agreement that sets forth items the disclosure of which is
necessary or appropriate as an exception to one or more representations or
warranties contained in Section 5 hereof; provided, that any item set forth in
the Disclosure Schedule as an exception to a representation or warranty shall be
deemed an admission by the Offerors that such item represents an exception,
fact, event or circumstance that is reasonably likely to result in a Material
Adverse Effect. The Disclosure Schedule shall be arranged in paragraphs
corresponding to the section numbers contained in Section 5. Nothing in the
Disclosure Schedule shall be deemed adequate to disclose an exception to a
representation or warranty made herein unless the Disclosure Schedule identifies
the exception with reasonable particularity and describes the relevant facts in
reasonable detail. Without limiting the generality of the immediately preceding
sentence, the mere listing (or inclusion of a copy) of a document or other item
in the Disclosure Schedule shall not be deemed adequate to disclose an exception
to a representation or warranty made herein unless the representation or
warranty has to do with the existence of the document or other item itself.
Information provided by the Company in response to any due diligence
questionnaire shall not be deemed part of the Disclosure Schedule and shall not
be deemed to be an exception to one or more representations or warranties
contained in Section 5 hereof unless such information is specifically included
on the Disclosure Schedule in accordance with the provisions of this Section
11.1.
11.2. Legal Expenses.
---------------
At Closing, the Placement Agents shall provide a credit for the Offerors'
transaction-related legal expenses in the amount of $10,000.00.
11.3. Notices.
---------
Prior to the Closing, and thereafter with respect to matters pertaining to
this Agreement only, all notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivery, first-class mail,
telex, telecopier or overnight air courier guaranteeing next day delivery:
17
if to the Placement Agents, to:
FTN Financial Capital Markets
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopier: ▇▇▇-▇▇▇-▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
and
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, Inc.
▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telecopier: ▇▇▇-▇▇▇-▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, General Counsel
with a copy to:
▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇▇▇, ▇.▇.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopier: ▇▇▇-▇▇▇-▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇, Esq.
and
Sidley ▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇ LLP
▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telecopier: 212-839-5599
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Esq.
if to the Offerors, to:
Stewardship Financial Corporation
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Telecopier: ▇▇▇-▇▇▇-▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇ Ext. 7125
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇▇ & English, LLP
Four Gateway Center
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Telecopier: ▇▇▇-▇▇▇-▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇. Poland, Esq.
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All such notices and communications shall be deemed to have been duly given
(i) at the time delivered by hand, if personally delivered, (ii) five business
days after being deposited in the mail, postage prepaid, if mailed, (iii) when
answered back, if telexed, (iv) the next business day after being telecopied, or
(v) the next business day after timely delivery to a courier, if sent by
overnight air courier guaranteeing next day delivery. From and after the
Closing, the foregoing notice provisions shall be superseded by any notice
provisions of the Operative Documents under which notice is given. The Placement
Agents, the Company, and their respective counsel, may change their respective
notice addresses from time to time by written notice to all of the foregoing
persons.
11.4. Parties in Interest, Successors and Assigns.
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Except as expressly set forth herein, this Agreement is made solely for the
benefit of the Placement Agents, the Purchaser and the Offerors and any person
controlling the Placement Agents, the Purchaser or the Offerors and their
respective successors and assigns; and no other person shall acquire or have any
right under or by virtue of this Agreement. This Agreement shall inure to the
benefit of and be binding upon the successors and assigns of each of the
parties.
11.5. Counterparts.
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This Agreement may be executed by the parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute one and the same agreement.
11.6. Headings.
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The headings in this Agreement are for convenience of reference only and
shall not limit or otherwise affect the meaning hereof.
11.7. Governing Law.
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THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
INTERNAL LAWS (AND NOT THE LAWS PERTAINING TO CONFLICTS OF LAWS) OF THE STATE OF
NEW YORK.
11.8. Entire Agreement.
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This Agreement, together with the Operative Documents and the other
documents delivered in connection with the transactions contemplated by this
Agreement, is intended by the parties as a final expression of their agreement
and intended to be a complete and exclusive statement of the agreement and
understanding of the parties hereto in respect of the subject matter contained
herein and therein. There are no restrictions, promises, warranties or
undertakings, other than those set forth or referred to herein and therein. This
Agreement, together with the Operative Documents and the other documents
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delivered in connection with the transaction contemplated by this Agreement,
supersedes all prior agreements and understandings between the parties with
respect to such subject matter.
11.9. Severability.
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In the event that any one or more of the provisions contained herein, or
the application thereof in any circumstances, is held invalid, illegal or
unenforceable in any respect for any reason, the validity, legality and
enforceability of any such provision in every other respect and of the remaining
provisions hereof shall not be in any way impaired or affected, it being
intended that all of the Placement Agents' and the Purchaser's rights and
privileges shall be enforceable to the fullest extent permitted by law.
11.10. Survival.
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The Placement Agents and the Offerors, respectively, agree that the
representations, warranties and agreements made by each of them in this
Agreement and in any certificate or other instrument delivered pursuant hereto
shall remain in full force and effect and shall survive the delivery of, and
payment for, the Capital Securities.
Signatures appear on the following page
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If this Agreement is satisfactory to you, please so indicate by signing the
acceptance of this Agreement and deliver such counterpart to the Offerors
whereupon this Agreement will become binding between us in accordance with its
terms.
Very truly yours,
STEWARDSHIP FINANCIAL CORPORATION
By: /s/ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
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Title: President / CEO
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STEWARDSHIP STATUTORY TRUST I
By: /s/ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
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Title: Administrator
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CONFIRMED AND ACCEPTED,
as of the date first set forth above
FTN FINANCIAL CAPITAL MARKETS,
a division of First Tennessee Bank National Association,
as a Placement Agent
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Title: Senior Vice President
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▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, INC.,
a New York corporation, as a Placement Agent
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
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Title: Managing Director
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