2,000,000
Capital Securities
FIDBANK Capital Trust I
UNDERWRITING AGREEMENT
__________, 1998
Wheat First Securities, Inc.
as Representative of the Several Underwriters
c/o Wheat First Securities, Inc.
000 Xxxx Xxxx Xxxxxx
Xxxxxxxx, Xxxxxxxx 00000
Ladies and Gentlemen:
FIDBANK Capital Trust I (the "Trust"), a statutory business trust created
under the Business Trust Act (the "Delaware Act") of the State of Delaware
(Chapter 38, Title 12, of the Delaware Code, 12 Del. (Sections 3801, ET SEQ.))
and Fidelity BancShares (N.C.), Inc., a Delaware corporation (the "Company" and
together with the Trust, the "Offerors"), confirm their agreement (the
"Agreement") with Wheat First Securities, Inc. ("Wheat First") and each of the
other Underwriters named in Schedule A hereto (collectively, the "Underwriters,"
which term shall also include any underwriter substituted as hereinafter
provided in Section 10 hereof) for whom Wheat First is acting as representative
(in such capacity, Wheat First will be referred to as the "Representative"),
with respect to the issue and sale by the Trust and the purchase by the
Underwriters, acting severally and not jointly, of the respective number set
forth in Schedule A of 2,000,000 _____% Capital Securities (liquidation amount
of $10.00 per security) of the Trust. Said aggregate of 2,000,000 Capital
Securities are herein referred to as the "Firm Capital Securities." In addition,
the Company proposes to grant to the Underwriters an option to purchase up to
300,000 additional ______% Capital Securities (the "Optional Capital
Securities"), as provided in Section 2 hereof. The Firm Capital Securities and,
to the extent such option is exercised, the Optional Capital Securities are
hereinafter collectively referred to as the "Capital Securities." The Capital
Securities will be guaranteed by the Company, to the extent described in the
Prospectus, with respect to distributions and payments upon liquidation,
redemption and otherwise pursuant to the Guarantee Agreement (the "Guarantee"),
to be dated as of _______, 1998, between the Company and Bankers Trust Company,
as Trustee (the "Guarantee Trustee"). The Capital Securities issued in
book-entry form will be issued to Cede & Co. as nominee of The Depository Trust
Company ("DTC") pursuant to a letter agreement, to be dated as of
the First Closing Date (as defined herein) or the Second Closing Date (as
defined herein), as the case may be, (the "DTC Agreement"), among the Trust, the
Property Trustee (as defined below) and DTC.
The entire proceeds from the sale of the Capital Securities in the Offering
will be combined with the entire proceeds from the sale by the Trust to the
Company of its common securities (the "Common Securities") to purchase
$3,092,790 aggregate principal amount (plus up to an additional $20,618,560
aggregate principal amount if the Underwriters' over-allotment option is
exercised) of ____% Subordinated Debentures due _______, 2028 (the "Subordinated
Debentures") issued by the Company. The Capital Securities and the Common
Securities will be issued pursuant to the amended and restated trust agreement,
to be dated as of ________, 1998 (the "Trust Agreement"), among the Company, as
depositor, and _____________ and ______________ as administrators (the
"Administrators"), Bankers Trust Company, as property trustee (the "Property
Trustee"), and Bankers Trust Company (Delaware), as Delaware trustee (the
"Delaware Trustee," and, together with the Property Trustee and the
Administrators, the "Trustees"), and the holders, from time to time, of
undivided beneficial interests in the assets of the Trust. The Subordinated
Debentures will be issued pursuant to an indenture, to be dated as of _______,
1998 (the "Indenture"), between the Company and Bankers Trust Company, as
trustee (the "Debenture Trustee").
The Capital Securities, the Guarantee and the Subordinated Debentures are
hereinafter collectively referred to as the "Securities."
The Indenture, the Trust Agreement, the Guarantee, the DTC Agreement, and
this Agreement are hereinafter referred to collectively as the "Operative
Documents."
The Offerors have filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-1 (File No. 333-______)
containing a preliminary prospectus relating to the Offering under the
Securities Act of 1933, as amended (the "1933 Act"), and have filed such
amendments thereto and such amended preliminary prospectuses as may have been
required by the Commission on or prior to the date hereof and will file such
additional amendments to the registration statement and such amended
prospectuses relating to the Offering (pursuant to the Securities Exchange Act
of 1934, as amended (the "1934 Act"), the rules and regulations of the
Commission thereunder (the "1934 Act Regulations"), the 1933 Act, the rules and
regulations of the Commission under the 1933 Act (the "1933 Act Regulations") or
otherwise) as may hereafter be required by the Commission or pursuant to the
terms of this Agreement. Such registration statement, as amended, at the time
such registration statement becomes effective and, in the event any
post-effective amendment thereto becomes effective prior to the First Closing
Date (as hereinafter defined), at the time such post-effective amendment becomes
effective, and the prospectus relating to the Offering constituting a part
thereof (including, in the case of such registration statement, as amended, and
in the case of such prospectus, all financial statements, schedules and exhibits
thereto and the
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information, if any, deemed to be a part thereof pursuant to Rule 430A(b) of the
1933 Act Regulations), as from time to time amended or supplemented pursuant to
the 1934 Act, the 1934 Act Regulations, the 1933 Act, the 1933 Act Regulations
or otherwise, are referred to herein as the "Registration Statement" and the
"Prospectus," respectively, except that if any revised prospectus relating to
the Offering shall be provided to the Underwriters by the Offerors for use in
the Offering which differs from the prospectus relating to the Offering on file
at the Commission at the time of such use (whether or not such revised
prospectus is required to be filed by the Offerors pursuant to Rule 424(b) of
the 1933 Act Regulations), the term "Prospectus" shall refer to such revised
prospectus from and after the time it is first provided to the Underwriters for
such use. The term "Preliminary Prospectus" means the preliminary prospectus
dated ______, 1998 distributed by the Underwriters prior to the date hereof.
The Offerors understand that the Underwriters propose to make the Offering
of the Securities as soon as the Representative deems advisable after the
Registration Statement becomes effective and after the Trust Agreement, the
Indenture and the Guarantee have been qualified under the Trust Indenture Act of
1939, as amended (the "1939 Act").
SECTION 1. Representations and Warranties.
(a) The Offerors jointly and severally represent and warrant to each
Underwriter as of the date hereof and as of each of the First Closing Date and
the Second Closing Date, and agree with each Underwriter as follows:
(i) The Registration Statement and any Rule 462(b) Registration
Statement have been declared effective by the Commission under the
Securities Act. The Company has complied with the Commission's
satisfaction with all requests of the Commission for additional and
supplemental information. No stop order suspending the effectiveness of
the Registration Statement, or any other amendment thereto and no cease
and desist order or temporary order under Section 8A of the 1933 Act has
been issued, and no proceeding for such purpose has been instituted or is
pending or threatened by the Commission. No order preventing or suspending
the use of any Prospectus or any Preliminary Prospectus has been issued by
the Commission, and each Preliminary Prospectus, at the time of filing
thereof, conformed in all material respects to the requirements of the
1933 Act and the 1933 Act Regulations and did not contain an untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading;
provided, however, that this representation and warranty shall not apply
to any statements or omissions made in reliance upon and in conformity
with the "Underwriter Information" (as defined in Section 6(a) hereof)
relating to the Underwriters furnished in writing to the Company by or on
behalf of the Underwriters expressly for use therein.
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(ii) At the time the Registration Statement and any amendment
thereto becomes effective, the Registration Statement and any amendment
thereto, and the Prospectus and any further amendment or supplement
thereto, will conform in all material respects to the requirements of the
1933 Act and the 1933 Act Regulations and will not, as of effective date
of each of the Registration Statement, and any amendment thereto, and as
of the applicable filing date of the Prospectus and any amendment or
supplement thereto, contain an untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances under which
they were made, not misleading; provided, however, that this
representation and warranty shall not apply to any statements or omissions
made in reliance upon and in conformity with the Underwriter Information.
(iii) KPMG Peat Marwick LLP, and PriceWaterhouseCoopers which has
audited certain financial statements of the Company, are independent
public accountants with respect to the Company and its subsidiaries, as
required by the 1933 Act, the 1933 Regulations, the 1934 Regulations and
Commission Regulation S-X.
(iv) The consolidated financial statements, together with the
related schedules and notes, included in the Registration Statement and
the Prospectus present fairly the consolidated financial position of the
Company and its subsidiaries at the dates indicated and the consolidated
results of operations and cash flows of the Company and its subsidiaries
for the periods specified; said financial statements have been prepared in
conformity with generally accepted accounting principles ("GAAP") applied
on a consistent basis throughout the periods involved, except as disclosed
in the notes to such financial statements. The supporting schedules, if
any, included in the Registration Statement and the Prospectus present
fairly, in all material respects, the information required to be stated
therein. The summary financial data included in the Registration Statement
and the Prospectus present fairly, in all material respects, the
information shown therein and have been compiled on a basis consistent
with that of the audited financial statements included in the Registration
Statement and the Prospectus.
(v) Since the respective dates as of which information is given in
the Registration Statement and the Prospectus, except as otherwise stated
therein or contemplated thereby and, except for normal recurring dividends
on the capital stock of the Company, there has not been (A) any material
adverse change in the condition (financial or otherwise), earnings,
business affairs or business prospects of the Trust, or the Company and
its subsidiaries, considered as one enterprise, whether or not arising in
the ordinary course of business, (B) any transaction entered into by the
Trust, the Company or any subsidiary, other than in the
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ordinary course of business, that is material to the Trust, or the Company
and its subsidiaries, considered as one enterprise, or (C) any dividend or
distribution of any kind declared, paid or made by the Company on its
capital stock.
(vi) The Company is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware and has the
corporate power and authority under such laws to own, lease and operate
its properties and to conduct its business as described in the
Registration Statement and the Prospectus; and the Company is duly
qualified as a foreign corporation to transact business and is in good
standing in each jurisdiction in which it owns or leases property of a
nature, or transacts business of a type, that would make such
qualification necessary, except to the extent that the failure to so
qualify or be in good standing would not have a material adverse effect on
the condition (financial or otherwise), earnings, business affairs or
business prospects of the Company and its subsidiaries, considered as one
enterprise.
(vii) The Fidelity Bank is a duly organized and validly existing
state-chartered bank under the laws of the State of North Carolina and
continues to hold a valid certificate to do business as such and has full
power and authority to conduct its business as such. The Fidelity Bank is
referred to herein as the "Significant Subsidiary". The Significant
Subsidiary has the authority under its jurisdiction of organization to
own, lease and operate its properties and to conduct its business and is
duly authorized to transact business and is in good standing in each
jurisdiction in which it owns or leases property of a nature, or transacts
business of a type, that would make such qualification necessary, except
to the extent that the failure to so qualify or to be in good standing
would not have a material adverse effect on the condition (financial or
otherwise), earnings, business affairs or business prospects of the
Company and its subsidiaries, considered as one enterprise.
(viii) The Company does not have any subsidiaries which are material
to its business, except to the extent that the Significant Subsidiary may
be deemed to be so material.
(ix) (a) The Company had at the date indicated a duly authorized and
outstanding capitalization as set forth in the Registration Statement and
the Prospectus, (b) all of the outstanding shares of capital stock of the
Company have been duly authorized and validly issued and are fully paid
and non-assessable, and (c) none of the outstanding shares of capital
stock of the Company was issued in violation of the preemptive rights of
any stockholder of the Company.
(x) The Trust has been duly created and is validly existing in good
standing as a business trust under the Delaware Act with the power and
authority to own property and to conduct its business as described in the
Registration
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Statement and the Prospectus and to enter into and perform its obligations
under the Operative Documents, as applicable, and the Capital Securities;
the Trust is not a party to or otherwise bound by any material agreement
other than those described in the Registration Statement and the
Prospectus; and based on an opinion of counsel, the Company believes the
Trust is and will, under current law, be classified for United States
federal income tax purposes as a grantor trust and not as an association
taxable as a corporation.
(xi) The Common Securities have been duly authorized by the Trust
Agreement and, when issued and delivered by the Trust to the Company
against payment therefor as described in the Registration Statement and
the Prospectus, will be validly issued and will represent undivided
beneficial interests in the assets of the Trust; the issuance of the
Common Securities is not subject to preemptive or other similar rights;
and at the First Closing Date and at the Second Closing Date, as the case
may be, all of the issued and outstanding Common Securities of the Trust
will be directly owned by the Company free and clear of any security
interest, mortgage, pledge, lien, encumbrance, claim or equitable right.
(xii) As of the First Closing Date and at the Second Closing Date,
as the case may be, the Capital Securities will have been duly authorized
by the Trust Agreement and, when issued and delivered against payment
therefor in accordance with the Trust Agreement, as provided herein, will
be validly issued and fully paid and non-assessable undivided beneficial
interests in the assets of the Trust and will conform in all material
respects to the description thereof contained in the Prospectus and the
issuance of the Capital Securities will not be subject to preemptive or
other similar rights.
(xiii) This Agreement has been duly authorized, executed and
delivered by the Offerors.
(xiv) The Trust Agreement has been duly authorized by the Company
and, at the First Closing Date and at the Second Closing Date, will have
been duly executed and delivered by the Company and the Trustees, and
assuming due authorization, execution and delivery of the Trust Agreement
by the Trustees, the Trust Agreement will, at the First Closing Date and
at the Second Closing Date, be a valid and binding obligation of the
Company, enforceable against the Company in accordance with its terms,
except to the extent that enforcement thereof may be limited by the
receivership, conservatorship and supervisory powers of bank regulatory
agencies generally as well as to bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting creditors' rights generally or
by general principles of equity (regardless of whether enforcement is
considered in a proceeding at law or in equity) and the availability of
equitable remedies (collectively, the "Enforceability Exceptions").
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(xv) The Guarantee has been duly authorized by the Company and, at
the First Closing Date and at the Second Closing Date, the Guarantee will
have been duly executed and delivered by the Company, and will constitute
a valid and binding agreement of the Company, enforceable against the
Company in accordance with its terms, except to the extent that
enforcement thereof may be limited by the Enforceability Exceptions.
(xvi) The Indenture has been duly authorized by the Company and, at
the First Closing Date and at the Second Closing Date, will have been duly
executed and delivered by the Company and will constitute a valid and
binding agreement of the Company, enforceable against the Company in
accordance with its terms, except to the extent that enforcement thereof
may be limited by the Enforceability Exceptions; and at the First Closing
Date, the Indenture will have been duly qualified under the 1939 Act.
(xvii) The Subordinated Debentures have been duly authorized by the
Company and, at the First Closing Date and at the Second Closing Date,
will have been duly executed by the Company and, when authenticated in the
manner provided for in the Indenture and delivered against payment
therefor as described in the Registration Statement and the Prospectus,
will constitute valid and binding obligations of the Company, enforceable
against the Company in accordance with their terms, except as enforcement
thereof may be limited by the Enforceability Exceptions; and the
Subordinated Debentures will be in the form contemplated by, and entitled
to the benefits of, the Indenture and will conform in all material
respects to the description thereof in the Prospectus.
(xix) Each of the Administrators of the Trust is an officer of the
Company and has been duly authorized by the Company to execute and deliver
the Trust Agreement.
(xx) The Trust is not, and following consummation of the
transactions contemplated hereby will not be, an "investment company" or a
company "controlled" by an "investment company" which is required to be
registered under the Investment Company Act of 1940, as amended (the "1940
Act").
(xxi) The Operative Documents described in the Registration
Statement and the Prospectus conform in all material respects to the
summary descriptions thereof contained in the Registration Statement and
the Prospectus.
(xxii) None of the Trust, the Company nor the Significant Subsidiary
is 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 it is a party or by which it may be bound or to which any of its
properties may be subject, except for
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such defaults that would not have a material adverse effect on the
condition (financial or otherwise), earnings, business affairs or business
prospects of the Company and its subsidiaries, considered as one
enterprise; the execution and delivery of the Operative Documents by the
Trust or the Company, as the case may be, the issuance and delivery of the
Securities, the consummation by the Offerors of the transactions
contemplated in the Operative Documents, and compliance by the Offerors
with the terms of the Operative Documents to which they are a party have
been duly authorized by all necessary corporate action on the part of the
Company, and do not and will not result in any violation of the charter or
by-laws of the Company or of the Significant Subsidiary or the Trust
Agreement or the certificate of trust of the Trust filed with the State of
Delaware on July 14, 1998 (the "Trust Certificate"), and do not and will
not conflict with, or result in a breach of any of the terms or provisions
of, or constitute a default under, or result in the creation or imposition
of any lien, charge or encumbrance upon any property or assets of the
Trust, the Company or any of the Significant Subsidiary under (A) any
indenture, mortgage, loan agreement, note, lease or other agreement or
instrument to which the Trust, the Company or the Significant Subsidiary is
a party or by which it may be bound or to which any of its properties may
be subject, except for such conflicts, breaches or defaults or liens,
charges or encumbrances that would not have a material adverse effect on
the condition (financial or otherwise), earnings, business affairs or
business prospects of the Trust, or the Company and its subsidiaries
considered as one enterprise or (B) any existing applicable law, rule,
regulation, judgment, order or decree of any government, governmental
instrumentality or court, domestic or foreign, having jurisdiction over the
Trust, the Company or the Significant Subsidiary or any of its properties,
except for such defaults that would not have a material adverse effect on
the condition (financial or otherwise), earnings, business affairs or
business prospects of the Company and its subsidiaries, considered as one
enterprise.
(xxiii) No filing with, or authorization, approval, consent,
license, order, registration, qualification or decree of, any court or
governmental authority or agency, other than those that have been made or
obtained, is necessary or required for the performance by the Company or
the Trust of their obligations hereunder, in connection with the issuance
and sale of the Capital Securities or the consummation of the transactions
contemplated by the Operative Documents, except such as may be required by
the securities as "Blue Sky" laws of the various states in connection with
the offer and sale of the Capital Securities.
(xxiv) Except as disclosed in the Registration Statement and the
Prospectus, there is no action, suit or proceeding before or by any
government, governmental instrumentality or court, domestic or foreign,
now pending or, to the knowledge of the Company or the Trust, threatened
against or affecting the Trust, or the Company or the Significant
Subsidiary that is required to be disclosed in the Registration Statement
and the Prospectus or that, in the final outcome, could,
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in the judgment of the Company, result in any material adverse effect on
the condition (financial or otherwise), earnings or business of the Trust,
or the Company and its subsidiaries considered as one enterprise, or that
could materially and adversely affect the properties or assets of the
Trust, or the Company and its subsidiaries considered as one enterprise, or
that could adversely affect the consummation of the transactions
contemplated in the Operative Documents; the aggregate liability or loss,
if any, resulting from the final outcome of all pending legal or
governmental proceedings to which the Trust, the Company or any of the
Significant Subsidiaries is a party or which affect any of its properties
that are not described in the Registration Statement and the Prospectus,
including ordinary routine litigation incidental to its business, would not
have a material adverse effect on the condition (financial or otherwise),
earnings or business affairs of the Trust, or the Company and its
subsidiaries considered as one enterprise.
(xxv) There are no contracts or documents of a character required to
be described in the Registration Statement and the Prospectus that are not
described as required.
(xxvi) The Offerors and the Significant Subsidiary each owns or
possesses, or can acquire on reasonable terms, adequate patents, patent
licenses, trademarks, service marks and trade names necessary to carry on
their businesses as presently conducted, except where the failure to own,
procure or obtain any of the foregoing would not have a material adverse
effect on the condition (financial or otherwise), earnings, business
affairs or business prospects of the Company and its subsidiaries,
considered as one enterprise, and none of the Offerors nor the Significant
Subsidiary has received any notice of infringement of or conflict with
asserted rights of others with respect to any patents, patent licenses,
trademarks, service marks or trade names that, in the aggregate, if the
subject of an unfavorable decision, ruling or finding, would have a
material adverse effect on the condition (financial or otherwise),
earnings or business of the Trust, or the Company and its subsidiaries
considered as one enterprise.
(xxvii) The Offerors and the Significant Subsidiary each owns,
possesses or has obtained all material governmental licenses, permits,
certificates, consents, orders, approvals and other authorizations
necessary to own or lease, as the case may be, and to operate its
properties and to carry on its business as presently conducted, and
neither the Offerors nor any of the Significant Subsidiary has received
any notice of proceedings relating to revocation or modification of any
such licenses, permits, certificates, consents, orders, approvals or
authorizations that, in the aggregate, if the subject of an unfavorable
decision, ruling or finding, could materially adversely affect the
condition (financial or otherwise), earnings or business of the Trust, or
the Company and its subsidiaries considered as one enterprise.
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(xxix) The Offerors and the Significant Subsidiary each has good and
marketable title to all properties and assets described in the
Registration Statement and the Prospectus as owned by it, free and clear
of all liens, charges, encumbrances or restrictions, except such as (A)
are described in the Registration Statement and the Prospectus or (B) are
neither material in amount nor materially significant in relation to the
business of the Trust, or the Company and its subsidiaries considered as
one enterprise; and all of the leases and subleases material to the
business of the Trust, and the Company and its subsidiaries considered as
one enterprise, and under which the Offerors or the Significant Subsidiary
holds properties described in the Registration Statement and the
Prospectus, are in full force and effect, and neither the Offerors nor the
Significant Subsidiary has any notice of any material claim of any sort
that has been asserted by anyone adverse to the rights of the Offerors or
such Significant Subsidiary under any of the leases or subleases mentioned
above, or affecting or questioning the rights of such corporation to the
continued possession of the leased or subleased premises under any such
lease or sublease.
(xxx) The Company has not taken and will not take, directly or
indirectly, any action designed to, or that might be reasonably expected
to, cause or result in stabilization or manipulation of the price of the
Capital Securities or the Common Stock.
(xxxi) None of the Trust, the Company, or any of their affiliates,
as such term is defined in Rule 501(b) under the 1933 Act ("Affiliates"),
or any person acting on its or any of their behalf (other than the
Underwriters, as to whom the Offerors make no representation) has engaged
or will engage, in connection with the offering of the Capital Securities,
in any form of general solicitation or general advertising within the
meaning of Rule 502(c) under the 1933 Act.
(xxxii) There are no persons with registration or other similar
rights to have any securities registered pursuant to the Registration
Statement or otherwise registered by the Company under the 0000 Xxx.
(b) Any certificate signed by any Trustee of the Trust or any duly
authorized officer of the Company or the Significant Subsidiary and delivered to
the Representative or to counsel for the Underwriters shall be deemed only a
representation and warranty by the Trust or the Company, as the case may be, to
each Underwriter as to the matters covered thereby.
SECTION 2. Sale and Delivery to Underwriters; Closing.
(a) On the basis of the representations and warranties herein contained
and subject to the terms and conditions herein set forth, the Trust agrees to
sell to each
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Underwriter, severally and not jointly, and each Underwriter, severally and not
jointly, agrees to purchase from the Trust, at a price of $10.00 per Security,
the number of Firm Capital Securities set forth in Schedule A opposite the name
of such Underwriter, plus any additional Capital Securities which such
Underwriter may become obligated to purchase pursuant to the provisions of
Section 10 hereof.
(b) Deliveries of certificates for the Firm Capital Securities shall be
made at the office of Wheat First in Richmond, Virginia, and payment of the
purchase price for the Firm Capital Securities shall be made by Wheat First, on
behalf of the several Underwriters, to the Trust by wire transfer of immediately
available funds contemporaneous with closing at such place as shall be agreed
upon by Wheat First and the Offerors, at 10:00 A.M. on _________, 1998 (unless
postponed in accordance with the provisions of Section 10), or such other time
not later than ten business days after such date as shall be agreed upon by
Wheat First and the Offerors (such time and date of payment and delivery being
herein called the "First Closing Date").
(c) Payment for the Firm Capital Securities purchased by the Underwriters
shall be made to the Trust by wire transfer of immediately available funds,
against delivery for the respective accounts of the Underwriters of certificates
for the Firm Capital Securities. Certificates for the Firm Capital Securities
shall be in such denominations and registered in such names as the Underwriters
may request in writing at least one business day before the First Closing Date.
It is understood that each Underwriter has authorized Wheat First, for its
account, to accept delivery of, receipt for, and make payment of the purchase
price for, the Firm Capital Securities which it has agreed to purchase. Wheat
First, individually and not as representative of the Underwriters, may (but
shall not be obligated to) make payment of the purchase price for the Firm
Capital Securities, if any, to be purchased by any Underwriter whose funds have
not been received by the First Closing Date, but such payment shall not relieve
such Underwriter from its obligations hereunder. The certificates representing
the Firm Capital Securities shall be made available for examination and
packaging by the Underwriters in Richmond, Virginia not later than 10:00 A.M. on
the last business day prior to the First Closing Date.
(d) In addition, on the basis of the representations, warranties and
agreements herein contained, but subject to the terms and conditions herein set
forth, the Company hereby grants an option to the several Underwriters to
purchase, severally and not jointly, up to an aggregate of 300,000 Optional
Capital Securities at the purchase price per security to be paid for the Firm
Capital Securities, plus accumulated distributions thereon from the date of
issuance for use solely in covering any over-allotments made by the
representative for the account of the Underwriters in the sale and distribution
of the Firm Capital Securities. The option granted hereunder may be exercised at
any time (but not more than once) within 30 days after the first date that any
of the Capital Securities are released by the Representative for sale to the
public, upon
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notice by the Representative to the Company setting forth the aggregate number
of Optional Capital Securities as to which the Underwriters are exercising the
option, the names and denominations in which the certificates for such
securities are to be registered and the time and place at which such
certificates will be delivered. Such time of delivery (which may not be earlier
than the First Closing Date), being herein referred to as the "Second Closing
Date," shall be determined by the Representative, but if at any time other than
the First Closing Date shall not be earlier than three nor later than five full
business days after delivery of such notice of exercise. The number of Optional
Capital Securities to be purchased by each Underwriter shall be determined by
multiplying the number of Optional Capital Securities to be sold by the Company
pursuant to such notice of exercise by a fraction, the numerator of which is the
number of Firm Capital Securities to be purchased by such Underwriter as set
forth opposite its name in Schedule A and the denominator of which is 2,000,000
(subject to such adjustments to eliminate any fractional share purchases as the
Representative in its discretion may make). The manner of payment for and
delivery of the Capital Securities shall be the same as for the Firm Capital
Securities purchased from the Company as specified in the three preceding
paragraphs. At any time before lapse of the option, you may cancel such option
by giving written notice of such cancellation to the Company. If the option is
cancelled or expires unexercised in whole or in part, the Company will
deregister under the 1933 Act the number of Optional Capital Securities as to
which the option has not been exercised.
(e) As compensation to the Underwriters for their commitments hereunder
and in view of the fact that the proceeds of the sale of the Capital Securities
will be used to purchase Subordinated Debentures of the Company, the Company
hereby agrees to pay at the First Closing Date or the Second Closing Date, as
the case may be, to Wheat First in immediately available funds, for the accounts
of the several Underwriters, $____ per Capital Security to be delivered by the
Trust hereunder at the First Closing Date or the Second Closing Date, as the
case may be.
(f) The Underwriter will comply with all material applicable laws and
rules in connection with the sale of the Securities and the Underwriters are not
acting as an agent for the Company.
SECTION 3. Covenants of the Offerors. The Offerors covenant with each
Underwriter as follows:
(a) The Company will use its best efforts to cause the Registration
Statement and any post-effective amendments to the Registration Statement to be
declared effective by the Commission (as and when specified in the reasonable
request of the Representative) and will prepare the Prospectus in a form
reasonably approved by the
-12-
Representative and file such Prospectus pursuant to Rule 424(b) under the 1933
Act not later than the Commission's close of business on the second business day
following the execution and delivery of this Agreement or, if applicable, such
earlier time as may be required by Rule 430A(a)(3) under the 1933 Act. The
Company will make no further amendment or any supplement to the Registration
Statement or the Prospectus prior to any First Closing Date which shall be
reasonably disapproved by the Representative after reasonable notice thereof.
The Company will notify the Representative immediately and confirm the notice in
writing (i) when the Registration Statement or any post-effective amendment
thereto (and any other amendment thereto) has been declared effective by the
Commission, (ii) of the transmittal to the Commission for filing of any
amendment or supplement to the Prospectus, (iii) of the receipt by the Company
of any comments from the Commission or any state securities commission with
respect to the transactions contemplated by this Agreement, (iv) of any request
by the Commission or any state securities commission for any amendment or
supplement to the Registration Statement or the Prospectus, or for additional
information, (v) of the issuance by the Commissioner or any state securities
commission or court of competent jurisdiction of any order suspending either the
Offering or the use of either the Preliminary Prospectus or the Prospectus or of
the threat of any such action by any such entity, (vi) of the issuance by the
Commission of any stop order suspending the effectiveness of the Registration
Statement or any amendment thereto or of the receipt by the Company of any
notification with respect to the suspension of the registration, qualification
or exemption of the Capital Securities for offering or sale in any jurisdiction,
or the initiation or threatening of any proceeding for such purpose. In the
event of the issuance of any stop order or of any order preventing or suspending
the use of any Preliminary Prospectus or Prospectus or suspending any such
registration, qualification or exemption, the Company promptly will use its best
efforts to obtain its withdrawal.
(b) The Company will give the Representative notice of its intention to
file or prepare any amendment or supplement to the Registration Statement or any
amendment or supplement to the Prospectus (whether, in the case of the
Registration Statement and the Prospectus, by the filing of documents pursuant
to the 1934 Act, the 1933 Act or otherwise and, in the case of the Prospectus,
by amending or supplementing the Prospectus then being used by the
Underwriters).
(c) The Company has furnished or will deliver to the Representative and
counsel for the Underwriters, without charge, signed copies of the Registration
Statement as originally filed and of each amendment thereto (including exhibits
filed therewith) and signed copies of all consents and certificates of experts,
and will also deliver to the Representative a conformed copy of the Registration
Statement as originally filed and of each amendment thereto (without exhibits)
for each of the Underwriters.
(d) The Company will deliver to each Underwriter, without charge, from
time to time until the effective date of the Registration Statement, as many
copies of each Preliminary Prospectus as such Underwriter may reasonably
request, and the Company
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hereby consents to the use of such copies for purposes permitted by the 1933
Act. The Company will furnish to each Underwriter, without charge, from time to
time during the period when the Prospectus is required to be delivered under the
1933 Act or the 1934 Act, such number of copies of the Prospectus (as amended or
supplemented) as such Underwriter may reasonably request for the purposes
contemplated by the 1933 Act or the 1934 Act or the respective applicable rules
and regulations of the Commission thereunder.
(e) If any event shall occur or condition shall exist as a result of which
it is necessary, in the opinion of counsel for the Underwriters or for the
Company, to amend the Registration Statement or the Prospectus in order that the
Prospectus will not include any untrue statements of a material fact or omit to
state a material fact necessary in order to make the statements therein not
misleading in the light of the circumstances existing at the time it is
delivered to a purchaser, or if it shall be necessary, in the opinion of such
counsel, at any such time to amend the Registration Statement or the Prospectus
in order to comply with the requirements of the 1933 Act or the 1933 Act
Regulations, the Company will promptly prepare and file with the Commission,
subject to Section 3(b), such amendment or supplement as may be necessary to
correct such statement or omission or to make the Registration Statement or the
Prospectus comply with such requirements, and the Company will furnish to the
Underwriters such number of copies of such amendment or supplement as the
Underwriters may reasonably request.
(f) If, at the time that the Registration Statement or a post-effective
amendment thereto becomes effective, any information shall have been omitted
therefrom in reliance upon Rule 430A of the 1933 Act Regulations, then
immediately following effectiveness, the Company will prepare, and file or
transmit for filing with the Commission in accordance with such Rule 430A and
Rule 424(b) of the 1933 Act Regulations, copies of an amended Prospectus, or, if
required by such Rule 430A, a post-effective amendment to the Registration
Statement (including an amended Prospectus), containing all information so
omitted and will use its best efforts to cause any such post-effective amendment
to be declared effective as promptly as practicable.
(g) The Company will use its best efforts, in cooperation with the
Underwriters, to qualify the Capital Securities for offering and sale under the
applicable securities laws of such states and other jurisdictions of the United
States as the Representative may designate and to maintain such qualifications
in effect for a period of not less than one year from the effective date of the
Registration Statement; provided, however, that the Company shall not be
obligated to file any general consent to service of process or to qualify as a
foreign corporation or as a dealer in securities in any jurisdiction in which it
is not so qualified or to subject itself to taxation in respect of doing
business in any jurisdiction in which it is not otherwise so subject. In each
jurisdiction in which the Capital Securities have been so qualified the Company
will file such statements and reports as may be required by the laws of such
jurisdiction to continue such qualification
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in effect for a period of not less than one year from the effective date of the
Registration Statement.
(h) The Company will make generally available to its security holders as
soon as practicable, but not later than 90 days after the close of the period
covered thereby, an earnings statement (in form complying with the provisions of
Rule 158 of the 1933 Act Regulations) covering a 12-month period beginning not
later than the first day of the Company's fiscal quarter next following the
"effective date" (as defined in said Rule 158) of the Registration Statement.
(i) The Offerors will cooperate with the Underwriters and use their best
efforts to permit the Capital Securities to be eligible for clearance and
settlement through the facilities of DTC.
(j) The Trust will use the net proceeds received by it from the sale of
the Capital Securities, and the Company will use the proceeds received by it
from the sale of the Subordinated Debentures, in the manners specified in the
Prospectus under "Use of Proceeds."
(k) Prior to ____________, 1999, neither the Trust nor the Company will,
without the prior written consent of Wheat First, directly or indirectly, issue,
sell, offer or agree to sell, grant any option for the sale of, or otherwise
dispose of, any securities that are substantially similar to the Capital
Securities, any security convertible into exchangeable or exercisable for
Capital Securities or any equity security substantially similar to the Capital
Securities (except for the Securities issued pursuant to this Agreement or with
the prior written consent of Wheat First).
SECTION 4. Payment of Expenses.
The Company will pay all costs and expenses incident to the performance of
its obligations under this Agreement, whether or not the transactions
contemplated herein are consummated or this Agreement is terminated pursuant to
Section 9 hereof, including all costs and expenses incident to (i) the printing
or other production of documents, including the Operative Documents, with
respect to the transactions, including any costs of printing the Registration
Statement originally filed with respect to the Capital Securities and any
amendment thereto, any Rule 462(b) Registration Statement, and the Prospectus
and any amendment or supplement thereto, this Agreement and any blue sky
memoranda, (ii) all arrangements relating to the delivery to the Underwriters of
copies of the foregoing documents, (iii) the fees and disbursements of the
counsel, the accountants and any other experts or advisors retained by the
Company, (iv) preparation, issuance and delivery to the Underwriters of any
certificates evidencing the Capital Securities, including transfer agent's and
registrar's fees, (v) the qualification of the Capital Securities under state
securities and blue sky laws, including filing fees and fees and disbursements
of counsel for the Underwriters relating thereto, (vi) the filing fees of the
Commission
-15-
and the National Association of Securities Dealers, Inc. relating to the Capital
Securities, and (vii) the fees and expenses of any trustee appointed under any
of the Operative Documents, including the fees and disbursements of counsel for
such trustees in connection with the Operative Document. If the sale of the
Capital Securities provided for herein is not consummated because any condition
to the obligations of the Underwriters set forth in Section 5 hereof is not
satisfied, because this Agreement is terminated pursuant to Section 9 hereof or
because of any failure, refusal or inability on the part of the Company to
perform all obligations and satisfy all conditions on its part to be performed
or satisfied hereunder other than by reason of a default by any of the
Underwriters, the Company will reimburse the Representative upon demand for all
reasonable out-of-pocket expenses (including counsel fees and disbursements)
that shall have been incurred by it in connection with the proposed purchase and
sale of the Capital Securities. The Company shall not in any event be liable to
any of the Underwriters for the loss of anticipated profits from the
transactions covered by this Agreement.
SECTION 5. Conditions of Underwriters' Obligations. The obligations of the
several Underwriters hereunder are subject to the accuracy of the
representations and warranties of the Offerors contained in Section 1 hereof or
in certificates of any Trustee of the Trust, officer of the Company or any of
its subsidiaries delivered pursuant to the provisions hereof, to the performance
by the Offerors of their obligations hereunder, and to the following further
conditions:
(a) If the Registration Statement or any post-effective amendment to the
Registration Statement filed prior to the First Closing Date has not been
declared effective as of the time of execution hereof, the Registration
Statement or any such post-effective amendment, and, if the Company has elected
to rely upon Rule 462(b), the Rule 462(b) Registration Statement, shall have
been declared effective not later than the earlier of (i) 11:00 A.M., Eastern
Standard Time, on the first business day following the date on which this
Agreement is executed, and (ii) the time confirmations are sent or given as
specified by Rule 462(b) or, with respect to the Registration Statement, such
later time and date as shall have been consented to by the Representative; if
required, the Prospectus or any term sheet that constitutes a part thereof and
any amendment or supplement thereto shall have been filed with the Commission in
the manner and within the time period required by Rules 434 and 424(b) under the
Act; no stop order suspending the effectiveness of the Registration Statement or
any amendment thereto shall have been issued, and no proceedings for that
purpose shall have been instituted or threatened or, to the knowledge of the
Company or Wheat First, shall be contemplated by the Commission; and the Company
shall have complied with any request of the Commission for additional
information (to be included in the Registration Statement or the Prospectus or
otherwise).
(b) OPINION OF OUTSIDE COUNSEL FOR OFFERORS. At the Closing Date, the
Underwriters shall have received the favorable opinion, dated as of the Closing
Date, of Xxxx and Xxxxx, P.A., counsel for the Company, to the effect set forth
in Exhibit A
-16-
hereto. Such counsel may also state that, insofar as such opinion involves
factual matters, they have relied, to the extent they deem proper, upon
certificates of Trustees of the Trust, officers of the Company and its
subsidiaries and certificates of public officials.
(c) OPINION OF SPECIAL DELAWARE COUNSEL FOR OFFERORS. If the opinion
referred to in Section 5(b) does not cover applicable matters of Delaware law,
at the Closing Date, the Underwriters shall have received the favorable opinion,
dated as of the Closing Date, of special Delaware counsel to the Offerors, to
the effect set forth in Exhibit B hereto.
(d) OPINION OF COUNSEL FOR BANKERS TRUST COMPANY. At the Closing Date, the
Underwriters shall have received the favorable opinion, dated as of the Closing
Date, of White & Case, counsel to Bankers Trust Company, as Property Trustee
under the Trust Agreement, and Guarantee Trustee under the Guarantee Agreement,
to the effect set forth in Exhibit C hereto.
(e) OPINION OF SPECIAL TAX COUNSEL FOR THE OFFERORS. At the Closing Date,
the Underwriters shall have received an opinion, dated as of the Closing Date,
of Hunton & Xxxxxxxx, special tax counsel to the Offerors, that (i) the Trust
will be classified for United States federal income tax purposes as a grantor
trust and not as an association taxable as a corporation and (ii) although the
discussion set forth in the Prospectus under the heading "Certain Federal Income
Tax Consequences" does not purport to discuss all possible United States federal
income tax consequences of the purchase, ownership and disposition of the
Capital Securities, such discussion constitutes, in all material respects, a
fair and accurate summary of the United States federal income tax consequences
of the purchase, ownership and disposition of the Capital Securities under
current law. Such opinion may be conditioned on, among other things, the initial
and continuing accuracy of the facts, financial and other information, covenants
and representations set forth in certificates of officers of the Company and
other documents deemed necessary for such opinion.
(f) OPINION OF COUNSEL FOR UNDERWRITERS. At the Closing Date, the
Underwriters shall have received the favorable opinion, dated as of the Closing
Date, of Xxxxxx & Bird LLP, counsel for the Underwriters, with respect to the
incorporation and legal existence of the Company, the Capital Securities, the
Indenture, the Guarantee, this Agreement, and the Prospectus and other related
matters as the Underwriters may require. Such counsel may also state that,
insofar as such opinion involves factual matters, they have relied, to the
extent they deem proper, upon certificates of Trustees of the Trust, officers of
the Company and its subsidiaries and certificates of public officials. Such
counsel may rely as to matters of Delaware law on the opinions of counsel
furnished pursuant to subsection (c) of this Section.
(g) CERTIFICATES. At the Closing Date, there shall not have been, since
the date hereof or since the respective dates as of which information is given
in the Prospectus, any material adverse change in the condition, financial or
otherwise, or in the earnings,
-17-
business affairs or business prospects of the Trust, or the Company and its
subsidiaries considered as one enterprise, whether or not arising in the
ordinary course of business, and the Underwriters shall have received a
certificate of the Chairman, any Vice Chairman, the Chief Executive Officer, the
President or any Vice President of the Company and of the chief financial
officer or the chief accounting officer of the Company and a certificate of an
Administrative Trustee of the Trust, dated as of the Closing Date, to the effect
that (i) there has been no such material adverse change, (ii) the
representations and warranties in Section 1 hereof were true and correct, in all
material respects, when made and are true and correct, in all material respects,
with the same force and effect as though expressly made at and as of the Closing
Date, and (iii) 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.
(h) ACCOUNTANT'S COMFORT LETTER. At the time of the execution of this
Agreement, the Underwriters shall have received from KPMG Peat Marwick LLP a
letter, dated such date, in form and substance reasonably satisfactory to the
Underwriters, containing statements and information of the type ordinarily
included in accountants' "comfort letters" to Underwriters with respect to the
financial statements and certain financial information contained in the
Prospectus.
(i) BRING-DOWN COMFORT LETTER. At the Closing Date, the Underwriters shall
have received from KPMG Peat Marwick LLP a letter, dated as of the Closing Date,
to the effect that they reaffirm the statements made in the letter furnished
pursuant to subsection (h) of this Section, except that the specified date
referred to shall be a date not more than three business days prior to the
Closing Date.
(j) On or before the Closing Date, the Representative and counsel for the
Underwriters shall have received such further certificates, documents or other
information as they may have reasonably requested from the Company.
(k) TERMINATION OF AGREEMENT. If any condition specified in this Section
shall not have been fulfilled when and as required to be fulfilled, this
Agreement may be terminated by the Underwriters by notice to the Offerors at any
time at or prior to the Closing Date, and such termination shall be without
liability of any party to any other party except as provided in Section 4 and
except that Sections 6, 7 and 8 and this Section 5(l) shall survive any such
termination and remain in full force and effect.
All opinions, certificates, letters and documents delivered pursuant to
this Agreement will comply with the provisions hereof only if they are
reasonably satisfactory in all material respects to the Representative and
counsel for the Underwriters. The Company shall furnish to the Representative
such conformed copies of such opinions, certificates, letters and documents in
such quantities as the Representative and counsel for the Underwriters shall
reasonably request.
-18-
The respective obligations of the several Underwriters to purchase and pay
for any Optional Capital Securities shall be subject, in their discretion, to
each of the foregoing conditions to purchase the Firm Capital Securities, except
that all references to the Firm Capital Securities and the First Closing Date
shall be deemed to refer to such Optional Capital Securities and the related
Second Closing Date, respectively.
SECTION 6. Indemnification.
(a) INDEMNIFICATION OF UNDERWRITERS. The Offerors agree to jointly and
severally indemnify and hold harmless each Underwriter and each person, if any,
who controls any Underwriter within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act as follows:
(i) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of any untrue statement or alleged
untrue statement of a material fact included in the Registration Statement
or any amendment to the Registration Statement, including the information
deemed to be part of the Registration Statement pursuant to Rule 430A(b)
of the 1933 Act Regulations, if applicable, or the omission or alleged
omission therefrom of a material fact required to be stated therein or
necessary to make the statements therein not misleading or arising out of
any untrue statement or alleged untrue statement of a material fact
contained in any preliminary prospectus or prospectus, including the
Prospectus (or any amendment or supplement thereto), or the omission or
alleged omission therefrom of a material fact necessary in order to make
the statements therein, in the light of the circumstances under which they
were made, not misleading;
(ii) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission; provided that (subject to Section
6(d) below) any such settlement is effected with the written consent of
the Offerors; and
(iii) against any and all expense whatsoever, as incurred (including
the reasonable fees and disbursements of counsel chosen by Wheat First),
reasonably incurred in investigating, preparing or defending against any
litigation, or any investigation or proceeding by any governmental agency
or body, commenced or threatened, or any claim whatsoever based upon any
such untrue statement or omission, or any such alleged untrue statement or
omission, to the extent that any such expense is not paid under (i) or
(ii) above; PROVIDED, HOWEVER, that this Section 6(a) shall not apply to
any loss, liability, claim, damage or expense to the extent arising out of
any untrue statement or omission or alleged untrue statement
-19-
or omission made in reliance upon and in conformity with written
information furnished to the Offerors by any Underwriter through Wheat
First expressly for use in the Registration Statement or any amendment to
the Registration Statement or any preliminary prospectus or the Prospectus
(or any amendment or supplement thereto). Such written information provided
by the Underwriters is referred to as "Underwriter Information."
The foregoing indemnification with respect to any preliminary
prospectus shall not inure to the benefit of any Underwriter from whom the
person asserting any such losses, claims, damages or liabilities purchased
Capital Securities, or any person controlling such Underwriter, if a copy
of the Prospectus (as then amended or supplemented if the Offerors shall
have furnished any amendments or supplements thereto) was not sent or
given by or on behalf of such Underwriter to such person, if such is
required by law, at or prior to the written confirmation of the sale of
such shares to such person and if the Prospectus (as so amended or
supplemented) would have cured the defect giving rise to such loss, claim,
damage or liability.
(b) INDEMNIFICATION OF OFFERORS, DIRECTORS AND OFFICERS. Each Underwriter
severally agrees to indemnify and hold harmless the Company, its directors and
officers, the Trust, each of the Trustees and each person, if any, who controls
the Company within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act against any and all loss, liability, claim, damage and expense
described in the indemnity contained in subsection (a) of this Section, as
incurred, but only with respect to untrue statements or omissions, or alleged
untrue statements or omissions, made in the Registration Statement (or any
amendment thereto) or any preliminary prospectus or the Prospectus (or any
amendment or supplement thereto) in reliance upon and in conformity with written
information furnished to the Offerors by such Underwriter through the
Representative expressly for use in the Registration Statement (or any amendment
thereto) or such preliminary prospectus or the Prospectus (or any amendment or
supplement thereto).
(c) ACTIONS AGAINST PARTIES; NOTIFICATION. Each indemnified party shall
give notice as promptly as reasonably practicable to each indemnifying party of
any action commenced against it in respect of which indemnity may be sought
hereunder, but failure to so notify an indemnifying party shall not relieve such
indemnifying party from any liability hereunder to the extent it is not
materially prejudiced as a result thereof and in any event shall not relieve it
from any liability which it may have otherwise than on account of this indemnity
agreement. In the case of parties indemnified pursuant to Section 6(a) above,
counsel to the indemnified parties shall be selected by Wheat First, and, in the
case of parties indemnified pursuant to Section 6(b) above, counsel to the
indemnified parties shall be selected by the Offerors. An indemnifying party may
participate at its own expense in the defense of any such action; provided,
however, that counsel to the indemnifying party shall not (except with the
consent of the indemnified party) also be counsel to the indemnified party. In
no event shall the indemnifying parties
-20-
be liable for fees and expenses of more than one counsel (in addition to any
local counsel) separate from their own counsel for all indemnified parties in
connection with any one action or separate but similar or related actions in the
same jurisdiction arising out of the same general allegations or circumstances.
No indemnifying party shall, without the prior written consent of the
indemnified parties, settle or compromise or consent to the entry of any
judgment with respect to any litigation, or any investigation or proceeding by
any governmental agency or body, commenced or threatened, or any claim
whatsoever in respect of which indemnification or contribution could be sought
under this Section 6 or Section 7 hereof (whether or not the indemnified parties
are actual or potential parties thereto), unless such settlement, compromise or
consent (i) includes an unconditional release of each indemnified party from all
liability arising out of such litigation, investigation, proceeding or claim and
(ii) does not include a statement as to or an admission of fault, culpability or
a failure to act by or on behalf of any indemnified party.
SECTION 7. Contribution. In order to provide for just and equitable
contribution in circumstances under which the indemnification provided for in
Section 6 hereof is for any reason held to be unenforceable by an indemnified
party in respect of any losses, liabilities, claims, damages or expenses
referred to therein, then each indemnifying party shall contribute to the
aggregate amount of such losses, liabilities, claims, damages and expenses
incurred by such indemnified party, as incurred, (i) in such proportion as is
appropriate to reflect the relative benefits received by the Offerors on the one
hand and the Underwriters on the other hand from the offering of the Capital
Securities pursuant to this Agreement or (ii) if the allocation provided by
clause (i) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of the Company, on the one hand, and the
Underwriters, on the other hand, in connection with the statements or omissions
which resulted in such losses, liabilities, claims, damages or expenses, as well
as any other relevant considerations.
The relative benefits received by the Offerors on the one hand and the
Underwriters on the other hand in connection with the offering of the Capital
Securities pursuant to this Agreement shall be deemed to be in the same
respective proportions as the total net proceeds from the offering of the
Capital Securities pursuant to this Agreement (before deducting expenses)
received by the Offerors and the total commission received by the Underwriters
in the Preferred Offering, bear to the aggregate initial offering price of the
Capital Securities. The relative fault of the Company, on the one hand, and the
Underwriters, on the other hand, shall be determined by reference to, among
other things, whether any such untrue or alleged untrue statement of a material
fact or omission or alleged omission to state a material fact relates to
information supplied by the Company, on the one hand, or the Underwriters, on
the other hand, and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
-21-
The Offerors and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section 7 were determined by pro rata
allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to above in this Section 7. The aggregate
amount of losses, liabilities, claims, damages and expenses incurred by an
indemnified party and referred to above in this Section 7 shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue or alleged untrue
statement or omission or alleged omission.
Notwithstanding the provisions of this Section 7, no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the Capital Securities purchased by it and distributed to the
public were offered to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission.
No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the 0000 Xxx) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 7, each person, if any, who controls an
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act shall have the same rights to contribution as such Underwriter, and
each officer and director of the Company, and each person, if any, who controls
the Company within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act shall have the same rights to contribution as the Company. The
Underwriters' respective obligations to contribute pursuant to this Section 7
are several in proportion to the number of Securities set forth opposite their
respective names in Schedule A hereto and not joint.
SECTION 8. Representations, Warranties and Agreements to Survive Delivery.
All representations, warranties and agreements contained in this Agreement or in
certificates of officers of the Company or trustees of the Trust submitted
pursuant hereto, shall remain operative and in full force and effect, regardless
of any investigation made by or on behalf of any Underwriter or controlling
person, or by or on behalf of the Trust or the Company, and shall survive
delivery of the Capital Securities to the Underwriters.
SECTION 9. Termination of Agreement.
(a) TERMINATION; GENERAL. The Underwriters may terminate this Agreement
with respect to the Firm Capital Securities or any Optional Capital Securities,
by notice to the Offerors, at any time at or prior to the First Closing Date or
the Second Closing Date,
-22-
respectively (i) if there has been, since the time of execution of this
Agreement or since the respective dates as of which information is given in the
Prospectus, any material adverse change in the condition, financial or
otherwise, or in the earnings, business affairs or business prospects of the
Trust or the Company and its subsidiaries considered as one enterprise, whether
or not arising in the ordinary course of business, or (ii) if there has occurred
any material adverse change in the financial markets in the United States or any
outbreak of hostilities or escalation thereof or other calamity or crisis, in
each case the effect of which is such as to make it, in the judgment of the
Underwriters, impracticable to market the Capital Securities or to enforce
contracts for the sale of the Capital Securities, or (iii) if trading in any
securities of the Company has been suspended or limited by the Commission, or if
trading generally on the American Stock Exchange or the New York Stock Exchange
or in the Nasdaq National Market System has been suspended or limited, or
minimum or maximum prices for trading have been fixed, or maximum ranges for
prices have been required, by any of said exchanges or by such system or by
order of the Commission, the National Association of Securities Dealers, Inc. or
any other governmental authority, or (iv) if a banking moratorium has been
declared by either Federal or North Carolina authorities.
(b) LIABILITIES. If this Agreement is terminated pursuant to this Section,
such termination shall be without liability of any party to any other party
except as provided in Section 4 hereof, and provided further that Sections 6, 7,
and 8 and this Section 9 shall survive such termination and remain in full force
and effect.
SECTION 10. Default by One or More of the Underwriters. If one or more of
the Underwriters shall fail at the First Closing Date or at the Second Closing
Date to purchase the First Capital Securities or the Optional Capital
Securities, as the case may be, which it or they are obligated to purchase under
this Agreement (the "Defaulted Securities"), the Underwriters shall have the
right, within 24 hours thereafter, to make arrangements for one or more of the
non-defaulting Underwriters, or any other Underwriters, to purchase all, but not
less than all, of the Defaulted Securities in such amounts as may be agreed upon
and upon the terms herein set forth; if, however, the Underwriters shall not
have completed such arrangements within such 24-hour period, then:
(a) if the number of Defaulted Securities does not exceed 10% of the total
number of Securities to be purchased hereunder, each of the non-defaulting
Underwriters shall be obligated, severally and not jointly, to purchase the full
amount thereof in the proportions that their respective purchasing obligations
hereunder bear to the purchasing obligations of all non-defaulting Underwriters,
or
(b) if the number of Defaulted Securities exceeds 10% of the Securities to
be purchased hereunder, this Agreement shall terminate without liability on the
part of any non-defaulting Underwriter.
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No action taken pursuant to this Section shall relieve any defaulting
Underwriter from liability in respect of its default.
In the event of any such default which does not result in a termination of
this Agreement, either the Underwriters or the Company shall have the right to
postpone the First Closing Date or the Second Closing Date, as the case may be,
for a period not exceeding seven days in order to effect any required changes in
the Prospectus or in any other documents or arrangements. As used herein, the
term "Underwriter" includes any person substituted for an Underwriter under this
Section 10.
SECTION 11. Notices. All notices and other communications hereunder shall
be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the
Underwriters shall be directed to the Underwriters c/o Wheat First at 000 Xxxx
Xxxx Xxxxxx, Xxxxxxxx, Xxxxxxxx 00000, attention of Xxxxx X. Xxxxxxxx with a
copy to Xxxxxx & Bird LLP, 000 Xxxxxxxxxxxx Xxxxxx, X.X., Xxxxx Xxxxxxxx, 00xx
Xxxxx, Xxxxxxxxxx, X.X. 00000, attention of Xxxxx X. Xxxxxx III; notices to the
Offerors shall be directed to Fidelity BancShares (N.C.), Inc., 000 Xxxxx Xxxx
Xxxxxx, Xxxxxx-Xxxxxx, Xxxxx Xxxxxxxx 00000, attention of ____________,
_____________--, with a copy to Xxxx and Xxxxx, P.A., 0000 Xxxxxxx Xxxxx, Xxx
Xxxx, Xxxxx Xxxxxxxx 00000, attention of Xxxxxxx X. Xxxxxx, Xx..
SECTION 12. Parties. This Agreement shall inure to the benefit of and be
binding upon the Underwriters and the Offerors and their respective successors.
Nothing expressed or mentioned in this Agreement is intended or shall be
construed to give any person, firm or corporation, other than the Underwriters
and the Offerors and their respective successors and the controlling persons and
officers and directors referred to in Sections 6 and 7 and their heirs and legal
representatives, any legal or equitable right, remedy or claim under or in
respect of this Agreement or any provision herein contained. This Agreement and
all conditions and provisions hereof are intended to be for the sole and
exclusive benefit of the Underwriters and the Offerors and their respective
successors, and said controlling persons and officers and directors and their
heirs and legal representatives, and for the benefit of no other person, firm or
corporation. No purchaser of Capital Securities from any Underwriter shall be
deemed to be a successor by reason merely of such purchase.
SECTION 13. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE COMMONWEALTH OF VIRGINIA.
SECTION 14. Effect of Headings. The Article and Section headings herein and
the Table of Contents are for convenience only and shall not affect the
construction hereof.
-24-
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company a counterpart hereof, whereupon
this instrument, along with all counterparts, will become a binding agreement
between the Underwriters and the Offerors in accordance with its terms.
Very truly yours,
FIDELITY BANCSHARES (N.C.), INC.
By:_______________________________
Title:____________________________
FIDBANK CAPITAL TRUST I
By: Fidelity BancShares (N.C.), Inc.
By:________________________________
Title:_____________________________
CONFIRMED AND ACCEPTED,
as of the date first above written:
WHEAT FIRST SECURITIES, INC.
By: ___________________________
Xxxxx X. Xxxxxxxx
Managing Director
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SCHEDULE A
Number of
Capital Securities
------------------
Name of Underwriters
----------------------------------------------------
Wheat First Securities, Inc.
-----------
Total 2,000,000
-----------
EXHIBIT A
Form of Opinion of Xxxx and Xxxxx, P.A., Counsel for the Company, to be
delivered pursuant to Section 5(b) of this Agreement:
1. The Company is validly existing as a corporation under the laws of the
State of Delaware and has full corporate power and authority to own, lease and
operate its properties and to conduct its business as described in the
Registration Statement and in the Prospectus. The Company is duly authorized to
transact business and is in good standing in each jurisdiction in which it owns
or leases property of a nature, or transacts business of a type, that would make
such qualification necessary, except to the extent that the failure to so
qualify or to be in good standing would not have a material adverse effect on
the condition (financial or otherwise), earnings, business affairs or business
prospects of the Company and its subsidiaries, considered as one enterprise.
2. Based solely on a letter dated ____________ from ______________ of the
Federal Reserve, the Company is registered as a bank holding company under the
Bank Holding Company Act of 1956, as amended.
3. The Fidelity Bank is validly existing as a state-chartered bank under
the laws of the State of North Carolina and has full corporate power and
authority to own, lease and operate its properties and to conduct its business
as described in the Registration Statement and in the Prospectus The Fidelity
Bank being referred to herein as the "Significant Subsidiary." The Significant
Subsidiary is duly authorized to transact business and is in good standing in
each jurisdiction in which it owns or leases property of a nature, or transacts
business of a type, that would make such qualification necessary, except to the
extent that the failure to so qualify or to be in good standing would not have a
material adverse effect on the condition (financial or otherwise), earnings,
business affairs or business prospects of the Company and its subsidiaries,
considered as one enterprise.
4. All of the outstanding shares of capital stock of the Company have been
duly authorized and validly issued, are fully paid and non-assessable and have
not been issued in violation of the preemptive rights of any shareholder of the
Company.
5. Under the laws of the State of Delaware, its Certificate of
Incorporation and its Bylaws, the Company has the corporate power and authority
to execute and deliver, and to perform its obligations under, the Operative
Documents to which it is a party and to issue and perform its obligations under
the Subordinated Debentures.
6. This Agreement has been duly and validly authorized, executed and
delivered by the Company and constitutes a valid and binding agreement of the
Company, enforceable against the Company in accordance with its terms, except to
the extent that enforcement thereof may be limited by the Enforceability
Exceptions.
A-1
The Trust Agreement has been duly authorized, executed and delivered
by the Company.
The Guarantee has been duly and validly authorized, executed and
delivered by the Company, and constitutes a valid and binding agreement of the
Company, enforceable against the Company in accordance with its terms, except to
the extent that enforcement thereof may be limited by the Enforceability
Exceptions; and the Guarantee has been duly qualified under the 1939 Act.
The Indenture has been duly and validly authorized, executed and
delivered by the Company and constitutes a valid and binding agreement of the
Company, enforceable against the Company in accordance with its terms, except to
the extent that enforcement thereof may be limited by the Enforceability
Exceptions; and the Indenture has been duly qualified under the 1939 Act.
The Subordinated Debentures have been duly and validly authorized
for issuance by the Company, and when executed, authenticated and delivered in
the manner provided for in the Indenture and paid for in accordance with the
Subordinated Debenture Purchase Agreement, will constitute valid and binding
obligations of the Company entitled to the benefits of the Indenture and
enforceable against the Company in accordance with their terms, except to the
extent that enforcement thereof may be limited by the Enforceability Exceptions;
and the issuance of the Subordinated Debentures is not subject to preemptive or
other similar rights arising under the Certificate of Incorporation or Bylaws of
the Company, under the laws of the State of Delaware or, to our knowledge of
such counsel, otherwise.
Such counsel has reviewed the statements in the Prospectus under the
captions "Capitalization," "Description of the Capital Securities," "Description
of the Junior Subordinated Debentures," "Description of the Guarantee," and
"Relationship Among the Capital Securities, the Junior Subordinated Debentures
and the Guarantee" to the extent that such statements purport to summarize
certain provisions of the Capital Securities, the Subordinated Debentures, the
Guarantee, and the Indenturesuch statements fairly summarize such provisions in
all material respects and conform in all material respects to the instruments
defining the same.
Neither the Company nor the Trust is or, immediately following
consummation of the transactions contemplated by the Agreement, will be required
to be registered under the Investment Company Act of 1940, as amended.
13. Except as disclosed in the Registration Statement or the Prospectus,
to the knowledge of such counsel, there is no action, suit or proceeding before
or by any government, governmental instrumentality or court, domestic or
foreign, now pending or threatened against or affecting the Company or any
subsidiary that in the final outcome would in our judgment result in any
material adverse change in the condition (financial or otherwise), earnings,
business affairs or business prospects of the Company and its subsidiaries
considered as one enterprise, or that could materially and adversely affect the
properties or assets of the Company and its
A-2
subsidiaries considered as one enterprise, or that would adversely affect the
consummation of the transactions contemplated in the Operative Documents. To the
knowledge of such counsel, the aggregate liability or loss, if any, resulting
from the final outcome of all pending legal or governmental proceedings to which
the Company or any subsidiary is a party or which affect any of its properties
that are not described in the Registration Statement or the Prospectus,
including ordinary routine litigation incidental to its business, would not have
a material adverse effect on the condition, financial or otherwise, earnings,
business affairs or business prospects of the Company and its subsidiaries
considered as one enterprise.
14. The execution and delivery by the Company of the Operative Documents
to which it is a party, the issuance and delivery of the Capital Securities and
the Common Securities and the consummation by the Company of the transactions
contemplated by the Operative Documents do not and will not violate or conflict
with the Certificate of Incorporation or the Bylaws of the Company.
15. The execution and delivery by the Company of the Operative Documents
to which it is a party, the issuance and delivery of the Capital Securities and
the Common Securities and the consummation by the Company of the transactions
contemplated by the Operative Documents do not and will not conflict with or
result in a breach of any of the terms or provisions of, or constitute a default
under, or result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Company or any subsidiary under
(a) any indenture, mortgage, loan agreement, note, lease or other agreement or
instrument to which the Company or any subsidiary is a party or by which it may
be bound or to which any of its properties may be subject and which would have
been filed as an exhibit to the Company's Annual Report on Form 10-K for the
year ended December 31, 1997, if the Company had been required to file such a
report, or (b) to the knowledge of such counsel, any existing applicable law,
rule, regulation, qualification, judgment, order or decree of any governmental
instrumentality or court, domestic or foreign, having jurisdiction over the
Company or any subsidiary or any of its properties, except for such conflicts,
breaches or defaults or liens, charges or encumbrances that would not have a
material adverse effect on the condition (financial or otherwise), earnings,
business affairs or business prospects of the Company or its subsidiaries
considered as one enterprise.
16. No Governmental Approval which has not been made or obtained is
required for the execution or delivery by the Company of the Operative Documents
to which it is a party, or the consummation by the Company of the transactions
contemplated thereby, except approvals issued by the NASD and pursuant to the
securities or "blue sky" laws of the State of North Carolina, as to which such
counsel need express no opinions.
The Registration Statement and any post-effective amendments thereto
have become effective under the 1933 Act and, to
A-3
the knowledge of such counsel, no stop order suspending the effectiveness of the
Registration Statement or such amendments thereto has been issued under the 1933
Act, and no proceeding therefor has been instituted or is pending or threatened
by the Commission.
The Registration Statement and the Prospectus and any further
amendments and supplements thereto made by the Company prior to the Closing Date
(other than the financial statements and related notes thereto, related
schedules and financial and statistical data, and descriptions of accounting
treatment included therein, as to which such counsel need express no opinion)
comply as to form in all material respects with the requirements of the 1933 Act
and the 1933 Act Regulations.
19. In addition, such counsel shall state that they have participated in
the preparation of the Registration Statement and the Prospectus and, while they
are not passing upon and do not assume any responsibility for the accuracy,
completeness or fairness of the statements contained in the Registration
Statement or the Prospectus (except as specified above), or the basis of the
foregoing, no facts have come to the attention of such counsel to lead them to
believe that, as of the effective date of the Registration Statement or any
post-effective amendment thereto or the date of the Prospectus or as of the
Closing Date, either the Registration Statement, any post-effective amendment
thereto, or the Prospectus (or, as of its date, any further amendment or
supplement thereto made by the Company prior to the Closing Date) contained an
untrue statement of a material fact or omitted to state a material fact required
to be stated therein or necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading (except for the
financial statements and related notes thereto, related schedules and financial
and statistical data, and descriptions of accounting treatment included therein,
as to which such counsel need express no belief).
Such counsel does not know of any amendment or supplement to the
Registration Statement or any post-effective amendment thereto required to be
filed or of any contract, agreement, instrument, lease, license, arrangement or
understanding of a character required to be filed as an exhibit to, described
in, the Registration Statement, post-effective amendment thereto, or the
Prospectus, as amended or supplemented, which is not filed or described as
required.
A-4
EXHIBIT B
Form of Opinion of Xxxxxxxx, Xxxxxx & Finger, Special Delaware Counsel to
the Offerors, to be delivered pursuant to Section 5(c) of this Agreement:
1. The Trust has been duly created and is validly existing in good
standing as a statutory business trust under the Delaware Business Trust Act.
2. Under the Delaware Business Trust Act and the Trust Agreement, the
Trust has the trust power and authority to (a) execute and deliver, and to
perform its obligations under, the Operative Documents to which it is a party,
(b) issue and perform its obligations under the Capital Securities and the
Common Securities, and (c) conduct its business as described in the Registration
Statement, or the Prospectus.
The Trust Agreement constitutes a valid and binding obligation of
the Company and the Administrators, and is enforceable against the Company and
the Administrators, in accordance with its terms, except to the extent that
enforcement thereof may be limited by (i) bankruptcy, insolvency, moratorium,
receivership, reorganization, liquidation, fraudulent conveyance or transfer and
other similar laws relating to or affecting the rights and remedies of creditors
generally, (ii) principles of equity, including applicable law relating to
fiduciary duties (regardless of whether considered and applied in a proceeding
in equity or at law), and (iii) the effect of applicable public policy on the
enforceability of provisions relating to indemnification or contribution.
The Capital Securities have been duly authorized by the Trust
Agreement, and the Capital Securities, when duly issued, executed and
authenticated in accordance with the Trust Agreement and delivered and paid for
in accordance with the Agreement, will be, subject to the qualifications set
forth in paragraph 6 below, fully paid and nonassessable undivided beneficial
interests in the assets of the Trust and will be entitled to the benefits of the
Trust Agreement, except to the extent that enforcement thereof may be limited by
(i) bankruptcy, insolvency, moratorium, receivership, reorganization,
liquidation, fraudulent conveyance or transfer and other similar laws relating
to or affecting the rights and remedies of creditors generally, (ii) principles
of equity, including applicable law relating to fiduciary duties (regardless of
whether considered and applied in a proceeding in equity or at law), and (iii)
the effect of applicable public policy on the enforceability of provisions
relating to indemnification or contribution.
The Common Securities have been duly authorized for issuance by the
Trust Agreement and, when issued, executed and authenticated in accordance with
the Trust Agreement and delivered and paid for in accordance with the Common
Security Purchase Agreement, will be validly issued undivided beneficial
interests in the assets of the Trust. The issuance of the Common Securities is
not subject to preemptive rights under the Delaware Business Trust Act or the
Trust Agreement.
B-1
The holders of the Capital Securities will be entitled to the same
limitation of personal liability extended to stockholders of private
corporations for profit organized under the Delaware General Corporation Law. We
bring to your attention, however, that the holders of the Capital Securities may
be obligated, pursuant to the Trust Agreement, to (a) provide indemnity and/or
security in connection with, and pay taxes or governmental charges arising from,
transfers or exchange of Capital Securities and the issuance of replacement
Capital Securities Certificates and (b) provide security or indemnity in
connection with requests of or directions to the Property Trustee to exercise
its rights and powers under the Trust Agreement.
No authorization, approval, consent or order of any Delaware court
or any Delaware governmental authority or Delaware agency is required to be
obtained by the Trust solely in connection with the execution, delivery or
performance by the Trust of the Operative Documents to which it is a party, or
the consummation by the Trust of the transactions contemplated thereby or the
issuance and sale of the Capital Securities. We express no opinion in this
paragraph 7, however, as to any governmental approvals which may be required
under state securities or "blue sky" laws.
8. None of the execution and delivery by the Trust of the Operative
Documents, or the issuance and sale of the Capital Securities by the Trust in
accordance with the terms of the Agreement or the consummation by the Trust of
the other transactions contemplated thereby, (a) violate any applicable Delaware
laws, or (b) conflict with the Certificate of Trust or the Trust Agreement,
except that we express no opinion in this paragraph 8 with respect to (i) the
rights to indemnity and contribution contained in the Trust Agreement which may
be limited by state securities laws or the public policy underlying such laws or
(ii) any state securities or "blue sky" laws.
B-2
EXHIBIT C
Form of Opinion of _________, Special Counsel for the Property Trustee,
Guarantee Trustee, and Debenture Trustee to be delivered pursuant to Section
5(d) of this Agreement:
1. Bankers Trust Company is a New York banking corporation validly
existing under the laws of the State of New York.
2. The Indenture Trustee has the requisite power and authority to execute,
deliver and perform its obligations under the Indenture and has taken all
necessary action to authorize the execution, delivery and performance by it of
the Indenture.
3. The Guarantee Trustee has the requisite power and authority to execute,
deliver and perform its obligations under the Guarantee, and has taken all
necessary action to authorize the execution, delivery and performance by it of
the Guarantee.
4. The Property Trustee has the requisite power and authority to execute
and deliver the Trustee Agreement, and has taken all necessary action to
authorize the execution and delivery of the Trust Agreement.
5. Each of the Indenture and the Guarantee has been duly executed and
delivered by the Indenture Trustee and the Guarantee Trustee, respectively, and
constitutes a legal, valid and binding obligation of the Indenture Trustee and
the Guarantee Trustee, respectively, enforceable against the Indenture Trustee
and the Guarantee Trustee, respectively, in accordance with its respective
terms, except that certain payment obligations may be enforceable solely against
the assets of the Trust and except that such enforcement may be limited by
bankruptcy, insolvency, reorganization, moratorium, liquidation, or other
similar laws affecting the enforcement of creditors' rights generally, and by
general principles of equity, including, without limitation, concepts of
materiality, reasonableness, good faith and fair dealing (regardless of whether
such enforceability is considered in a proceeding in equity or at law).
6. The Securities delivered on the date hereof have been duly
authenticated by the Indenture Trustee in accordance with the terms of the
Indenture.
C-1
