EXHIBIT 10-8
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PURCHASE AGREEMENT
among
Southcoast Financial Corporation,
Southcoast Capital Trust II
and
TRAPEZA CDO II, LLC
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Dated as of December 16, 2002
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PURCHASE AGREEMENT
($7,000,000 Trust Preferred Securities)
THIS PURCHASE AGREEMENT, dated as of December 16, 2002, is entered
into among Southcoast Financial Corporation, a South Carolina corporation (the
"Company"), and Southcoast Capital Trust II, a Delaware statutory trust (the
"Trust", and together with the Company, the "Sellers"), and Trapeza CDO II, LLC
or its assignee. (the "Purchaser").
WITNESSETH:
WHEREAS, the Sellers propose to issue and sell 7,000 Floating Rate
Preferred Securities of the Trust, having a stated liquidation amount of $1,000
per security, bearing a variable rate, reset quarterly, equal to LIBOR (as
defined in the Indenture (as defined below)) plus 3.35%; provided, that the
applicable interest rate may not exceed 12% through the interest payment date in
December 2007 (the "Preferred Securities");
WHEREAS, the Preferred Securities will be guaranteed by the Company
(the "Guarantee") pursuant to the Guarantee Agreement (the "Guarantee
Agreement"), dated as of the Closing Date (defined below), and executed and
delivered by the Company and The Bank of New York, a New York banking
corporation, as trustee (in such capacity, the "Guarantee Trustee"), for the
benefit of the holders from time to time of the Preferred Securities;
WHEREAS, the entire proceeds from the sale of the Preferred
Securities will be combined with the entire proceeds from the sale by the Trust
to the Company of its common securities (the "Common Securities"), and will be
used by the Trust to purchase Seven Million Two Hundred Twenty Thousand Dollars
($7,220,000) in principal amount of the unsecured junior subordinated deferrable
interest notes of the Company (the "Junior Subordinated Notes");
WHEREAS, the Preferred Securities and the Common Securities for the
Trust will be issued pursuant to the Amended and Restated Trust Agreement (the
"Trust Agreement"), dated as of the Closing Date, among the Company, as
depositor, The Bank of New York, a New York banking corporation, as property
trustee (in such capacity, the "Property Trustee"), The Bank of New York
(Delaware), a Delaware banking corporation, as Delaware trustee (in such
capacity, the "Delaware Trustee"), the Administrative Trustees named therein (in
such capacities, the "Administrative Trustees") and the holders from time to
time of undivided beneficial interests in the assets of the Trust; and
WHEREAS, the Junior Subordinated Notes will be issued pursuant to a
Junior Subordinated Indenture, dated as of the Closing Date (the "Indenture"),
between the Company and The Bank of New York, a New York banking corporation, as
indenture trustee (in such capacity, the "Indenture Trustee").
NOW, THEREFORE, in consideration of the mutual agreements and subject
to the terms and conditions herein set forth, the parties hereto agree as
follows:
1. Definitions. The Preferred Securities, the Common Securities and the
Junior Subordinated Notes are collectively referred to herein as the
"Securities." This Purchase Agreement, the Indenture, the Trust Agreement, the
Guarantee and the Securities are collectively referred to herein as the
"Operative Documents." All other capitalized terms used but not defined in this
Purchase Agreement shall have the meanings ascribed thereto in the Indenture.
2. Purchase and Sale of the Preferred Securities.
(a) The Sellers agree to sell to the Purchaser, and the Purchaser
agrees to purchase from the Sellers the Preferred Securities for an amount (the
"Purchase Price") equal to Seven Million Dollars ($7,000,000) less an amount
equal to three percent (3%) thereof (the "Discount"). In view of the fact that
the proceeds of the sale of the Preferred Securities and the Common Securities
will be used to purchase the Junior Subordinated Notes of the Company, the
Discount will be netted from the payment made by the Purchaser to the Trust for
the sale of the Preferred Securities and will be netted by the Trust from the
amount paid to the Company for the sale of the Junior Subordinated Notes. The
Purchaser shall be responsible for the following expenses: (i) rating agency
costs and expenses and (ii) any fee payable to the Company's introducing agent;
provided, that such introducing agent has an agreement with the Purchaser, but
excluding the fees and expenses set forth in Section 7 hereof. The Sellers shall
use the Purchase Price, together with the proceeds from the sale of the Common
Securities, to purchase the Junior Subordinated Notes.
(b) Delivery or transfer of, and payment for, the Preferred
Securities shall be made at 10:00 A.M. Chicago time (11:00 A.M. New York time),
on December 16, 2002 or such later date (not later than January 16, 2003 (30
days later)) as the parties may designate (such date and time of delivery and
payment for the Preferred Securities being herein called the "Closing Date").
The Preferred Securities shall be transferred and delivered to the Purchaser
against the payment of the Purchase Price to the Sellers made by wire transfer
in immediately available funds on the Closing Date to a U.S. account designated
in writing by the Company at least two business days prior to the Closing Date.
(c) Delivery of the Preferred Securities shall be made at such
location, and in such names and denominations, as the Purchaser shall designate
at least two business days in advance of the Closing Date. The Company and the
Trust agree to have the Preferred Securities available for inspection and
checking by the Purchaser in Chicago, Illinois, not later than 1:00 P.M.,
Chicago time (2:00 P.M. New York time), on the business day prior to the Closing
Date. The closing for the purchase and sale of the Preferred Securities shall
occur at the offices of Mayer, Brown, Xxxx & Maw, 000 Xxxxx XxXxxxx Xxxxxx,
Xxxxxxx, Xxxxxxxx 00000, or such other place as the parties hereto shall agree.
3. Conditions. The obligations of the parties under this Purchase
Agreement are subject to the following conditions:
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(a) the representations and warranties contained herein shall be
accurate as of the date of delivery of the Preferred Securities.
(b) [Reserved.]
(c) (i) Mayer, Brown, Xxxx & Maw, special counsel for the Purchaser,
shall have delivered an opinion, dated the Closing Date, addressed to the
Purchaser, in substantially the form set out in Annex A-1 hereto and (ii) the
Company shall have furnished to the Purchaser the opinion of the Company's
General Counsel or a certificate signed by the Company's Chief Executive
Officer, President or an Executive Vice President and its Chief Financial
Officer, Treasurer or Assistant Treasurer, dated the Closing Date, addressed to
the Purchaser, in substantially the form set out in Annex A-II hereto.
(d) The Purchaser shall have been furnished the opinion of Mayer,
Brown, Xxxx & Maw, special tax counsel for the Purchaser, dated the Closing
Date, addressed to the Purchaser, in substantially the form set out in Annex B
hereto.
(e) The Purchaser shall have received the opinion of Xxxxxxxx, Xxxxxx
& Finger, P.A., special Delaware counsel for the Purchaser, dated the Closing
Date, addressed to the Purchaser and the Company, in substantially the form set
out in Annex C hereto.
(f) The Purchaser shall have received the opinion of White & Case,
special counsel for the Guarantee Trustee, the Property Trustee, the Indenture
Trustee and the Delaware Trustee, dated the Closing Date, addressed to the
Purchaser, in substantially the form set out in Annex D hereto.
(g) The Purchaser shall have received the opinion of Xxxxxxxx, Xxxxxx
& Finger, P.A., special Delaware counsel for the Purchaser, dated the Closing
Date, addressed to the Purchaser, in substantially the form set out in Annex E
hereto.
(h) The Company shall have furnished to the Purchaser a certificate
of the Company, signed by the Chief Executive Officer, President or an Executive
Vice President and by the Chief Financial Officer, Treasurer or Assistant
Treasurer of the Company, and the Trust shall have furnished to the Purchaser a
certificate of the Trust, signed by an Administrative Trustee of the Trust, in
each case dated the Closing Date, and, in the case of the Company, as to (i) and
(ii) below and, in the case of the Trust, as to (i) below.
(i) the representations and warranties in this Purchase
Agreement are true and correct on and as of the Closing Date with the
same effect as if made on the Closing Date, and the Company and the
Trust have complied with all the agreements and satisfied all the
conditions on either of their part to be performed or satisfied at or
prior to the Closing Date; and
(ii) since the date of the Interim Financial Statements (as
defined below), there has been no material adverse change in the
condition (financial or other), earnings, business or assets of the
Company and its subsidiaries, whether or not arising from transactions
occurring in the ordinary course of business.
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(i) Subsequent to the execution of this Purchase Agreement, there
shall not have been any change, or any development involving a prospective
change, in or affecting the condition (financial or other), earnings, business
or assets of the Company and its subsidiaries, whether or not occurring in the
ordinary course of business, the effect of which is, in the Purchaser's
judgment, so material and adverse as to make it impractical or inadvisable to
proceed with the purchase of the Preferred Securities.
(j) Prior to the Closing Date, the Company and the Trust shall have
furnished to the Purchaser and its counsel such further information,
certificates and documents as the Purchaser or its counsel may reasonably
request.
If any of the conditions specified in this Section 3 shall not have
been fulfilled when and as provided in this Purchase Agreement, or if any of the
opinions, certificates and documents mentioned above or elsewhere in this
Purchase Agreement shall not be reasonably satisfactory in form and substance to
the Purchaser or its counsel, this Purchase Agreement and all the Purchaser's
obligations hereunder may be canceled at, or at any time prior to, the Closing
Date by the Purchaser. Notice of such cancellation shall be given to the Company
and the Trust in writing or by telephone or facsimile confirmed in writing.
Each certificate signed by any trustee of the Trust or any officer of
the Company and delivered to the Purchaser or the Purchaser's counsel in
connection with the Operative Documents and the transactions contemplated hereby
and thereby shall be deemed to be a representation and warranty of the Trust
and/or the Company, as the case may be, and not by such trustee or officer in
any individual capacity.
4. Representations and Warranties of the Company and the Trust. The
Company and the Trust, except as otherwise noted on Schedule 4 hereto, jointly
and severally represent and warrant to, and agree with the Purchaser, as
follows:
(a) Neither the Company nor the Trust, nor any of their "Affiliates"
(as defined in Rule 501(b) of Regulation D ("Regulation D") under the Securities
Act (as defined below)), nor any person acting on its or their behalf, has,
directly or indirectly, made offers or sales of any security, or solicited
offers to buy any security, under circumstances that would require the
registration of any of the Securities under the Securities Act of 1933, as
amended (the "Securities Act").
(b) Neither the Company nor the Trust, nor any of their Affiliates,
nor any person acting on its or their behalf, has engaged in any form of general
solicitation or general advertising (within the meaning of Regulation D) in
connection with any offer or sale of any of the Securities.
(c) The Securities (i) are not and have not been listed on a national
securities exchange registered under section 6 of the Securities Exchange Act of
1934, as amended (the "Exchange Act"), or quoted on a U.S. automated
inter-dealer quotation system and (ii) are not of an open-end investment
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company, unit investment trust or face-amount certificate company that are, or
are required to be, registered under section 8 of the Investment Company Act of
1940, as amended (the "Investment Company Act"), and the Securities otherwise
satisfy the eligibility requirements of Rule 144A(d)(3) promulgated pursuant to
the Securities Act ("Rule 144A(d)(3)").
(d) Neither the Company nor the Trust, nor any of their Affiliates,
nor any person acting on its or their behalf, has engaged, or will engage, in
any "directed selling efforts" within the meaning of Regulation S under the
Securities Act with respect to the Securities.
(e) Neither the Company nor the Trust is, and, immediately following
consummation of the transactions contemplated hereby and the application of the
net proceeds therefrom, will not be, an "investment company" or an entity
"controlled" by an "investment company," in each case within the meaning of
section 3(a) of the Investment Company Act.
(f) Neither the Company nor the Trust has paid or agreed to pay to
any person any compensation for soliciting another to purchase any of the
Securities, except for the Discount and/or any fee payable to the Company's
introducing agent, provided, that such introducing agent has an agreement with
the Purchaser.
(g) The Trust has been duly created and is validly existing in good
standing as a statutory trust under the Delaware Statutory Trust Act, 12 Del. C.
ss.3801, et seq. (the "Statutory Trust Act") with all requisite power and
authority to own property and to conduct the business it transacts and proposes
to transact and to enter into and perform its obligations under the Operative
Documents to which it is a party. The Trust is duly qualified to transact
business as a foreign entity and is in good standing in each jurisdiction in
which such qualification is necessary, except where the failure to so qualify or
be in good standing would not have a material adverse effect on the condition
(financial or otherwise), earnings, business or assets of the Trust, whether or
not occurring in the ordinary course of business. The Trust is not a party to or
otherwise bound by any agreement other than the Operative Documents. The Trust
is and will be, under current law, classified for federal income tax purposes as
a grantor trust and not as an association or publicly traded partnership taxable
as a corporation.
(h) The Trust Agreement has been duly authorized by the Company and,
on the Closing Date specified in Section 2(b), will have been duly executed and
delivered by the Company and the Administrative Trustees of the Trust, and,
assuming due authorization, execution and delivery by the Property Trustee and
the Delaware Trustee, will be a legal, valid and binding obligation of the
Company and the Administrative Trustees, enforceable against them in accordance
with its terms, subject to applicable bankruptcy, insolvency and similar laws
affecting creditors' rights generally and to general principles of equity. Each
of the Administrative Trustees of the Trust is an employee of the Company or one
of its subsidiary banks and has been duly authorized by the Company to execute
and deliver the Trust Agreement.
(i) Each of the Guarantee and the Indenture has been duly authorized
by the Company and, on the Closing Date, will have been duly executed and
delivered by the Company, and, assuming due authorization, execution and
delivery by the Guarantee Trustee, in the case of the Guarantee, and by the
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Indenture Trustee, in the case of the Indenture, will be a legal, valid and
binding obligation of the Company enforceable against it in accordance with its
terms, subject to applicable bankruptcy, insolvency and similar laws affecting
creditors' rights generally and to general principles of equity.
(j) The Preferred Securities and the Common Securities have been duly
authorized by the Trust and, when issued and delivered against payment therefor
on the Closing Date in accordance with this Purchase Agreement, in the case of
the Preferred Securities, and in accordance with the Common Securities
Subscription Agreement, in the case of the Common Securities, will be validly
issued, fully paid and non-assessable and will represent undivided beneficial
interests in the assets of the Trust entitled to the benefits of the Trust
Agreement, enforceable against the Trust in accordance with their terms, subject
to applicable bankruptcy, insolvency and similar laws affecting creditors'
rights generally and to general principles of equity. The issuance of the
Securities is not subject to any preemptive or other similar rights. On the
Closing Date, all of the issued and outstanding Common Securities will be
directly owned by the Company free and clear of any pledge, security interest,
claim, lien or other encumbrance (each, a "Lien").
(k) The Junior Subordinated Notes have been duly authorized by the
Company and, on the Closing Date, will have been duly executed and delivered to
the Indenture Trustee for authentication in accordance with the Indenture and,
when authenticated in the manner provided for in the Indenture and delivered to
the Trust against payment therefor in accordance with the Junior Subordinated
Note Purchase Agreement, will constitute legal, valid and binding obligations of
the Company entitled to the benefits of the Indenture, enforceable against the
Company in accordance with their terms, subject to applicable bankruptcy,
insolvency and similar laws affecting creditors' rights generally and to general
principles of equity.
(l) This Purchase Agreement has been duly authorized, executed and
delivered by the Company and the Trust.
(m) Neither the issue and sale of the Common Securities, the
Preferred Securities or the Junior Subordinated Notes, nor the purchase of the
Junior Subordinated Notes by the Trust, nor the execution and delivery of and
compliance with the Operative Documents by the Company or the Trust, nor the
consummation of the transactions contemplated herein or therein, (i) will
conflict with or constitute a violation or breach of the Trust Agreement or the
charter or bylaws of the Company or any subsidiary of the Company or any
applicable law, statute, rule, regulation, judgment, order, writ or decree of
any government, governmental authority, agency or instrumentality or court,
domestic or foreign, having jurisdiction over the Trust or the Company or any of
its subsidiaries or their respective properties or assets (collectively,
"Governmental Entities"), (ii) will conflict with or constitute a violation or
breach of, or a default or Repayment Event (as defined below) under, or result
in the creation or imposition of any Lien upon any property or assets of the
Trust, the Company or any of the Company's subsidiaries pursuant to, any
contract, indenture, mortgage, loan agreement, note, lease or other agreement or
instrument to which (A) the Trust, the Company or any of its subsidiaries is a
party or by which it or any of them may be bound, or (B) to which any of the
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property or assets of any of them is subject, or any judgment, order or decree
of any court, governmental authority or arbitrator, except, in the case of this
clause (ii), for such conflicts, breaches, violations, defaults, Repayment
Events (as defined below) or Liens which (X) would not, singly or in the
aggregate, adversely affect the consummation of the transactions contemplated by
the Operative Documents and (Y) would not, singly or in the aggregate, have a
material adverse effect on the condition (financial or otherwise), earnings,
business, liabilities and assets (taken as a whole) or business prospects of the
Company and its subsidiaries taken as a whole, whether or not occurring in the
ordinary course of business (a "Material Adverse Effect") or (iii) require the
consent, approval, authorization or order of any court or Governmental Entity.
As used herein, a "Repayment Event" means any event or condition which gives the
holder of any note, debenture or other evidence of indebtedness (or any person
acting on such holder's behalf) the right to require the repurchase, redemption
or repayment of all or a portion of such indebtedness by the Trust or the
Company or any of its subsidiaries prior to its scheduled maturity.
(n) The Company has been duly incorporated and is validly existing as
a corporation in good standing under the laws of South Carolina, with all
requisite corporate power and authority to own, lease and operate its properties
and conduct the business it transacts and proposes to transact, and is duly
qualified to transact business and is in good standing as a foreign corporation
in each jurisdiction where the nature of its activities requires such
qualification, except where the failure of the Company to be so qualified would
not, singly or in the aggregate, have a Material Adverse Effect. None of the
Company or any of its subsidiaries has been requested by a Governmental Entity
to republish, restate, or refile any regulatory or financial report.
(o) The Company has no subsidiaries that are material to its
business, financial condition or earnings other than those subsidiaries listed
in Schedule 1 attached hereto (the "Significant Subsidiaries"). Each Significant
Subsidiary has been duly incorporated and is validly existing as a corporation
in good standing under the laws of the jurisdiction in which it is chartered or
organized, with all requisite corporate power and authority to own, lease and
operate its properties and conduct the business it transacts and proposes to
transact. Each Significant Subsidiary is duly qualified to transact business and
is in good standing as a foreign corporation in each jurisdiction where the
nature of its activities requires such qualification, except where the failure
to be so qualified would not, singly or in the aggregate, have a Material
Adverse Effect.
(p) Each of the Trust, the Company and each of the Company's
subsidiaries hold all necessary approvals, authorizations, orders, licenses,
certificates and permits (collectively, "Government Licenses") of and from
Governmental Entities necessary to conduct their respective businesses as now
being conducted, and neither the Trust, the Company nor any of the Company's
subsidiaries has received any notice of proceedings relating to the revocation
or modification of any such Government License, except where the failure to be
so licensed or approved or the receipt of an unfavorable decision, ruling or
finding, would not, singly or in the aggregate, have a Material Adverse Effect;
all of the Governmental Licenses are valid and in full force and effect, except
where the invalidity or the failure of such Governmental Licenses to be in full
force and effect, would not, singly or in the aggregate, have a Material Adverse
Effect; and the Company and its subsidiaries are in compliance with all
8
applicable laws, rules, regulations, judgments, orders, decrees and consents,
except where the failure to be in compliance would not, singly or in the
aggregate, have a Material Adverse Effect.
(q) All of the issued and outstanding shares of capital stock of the
Company and each of its subsidiaries are validly issued, fully paid and
non-assessable; all of the issued and outstanding capital stock of each
subsidiary of the Company is owned by the Company, directly or through
subsidiaries, free and clear of any Lien, claim or equitable right; and none of
the issued and outstanding capital stock of the Company or any subsidiary was
issued in violation of any preemptive or similar rights arising by operation of
law, under the charter or by-laws of such entity or under any agreement to which
the Company or any of its subsidiaries is a party.
(r) Neither the Company nor any of its subsidiaries is (i) in
violation of its respective charter or by-laws or similar organizational
documents or (ii) 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 the
Company or any such subsidiary is a party or by which it or any of them may be
bound or to which any of the property or assets of any of them is subject,
except, in the case of clause (ii), where such violation or default would not,
singly or in the aggregate, have a Material Adverse Effect.
(s) There is no action, suit or proceeding before or by any
Governmental Entity, arbitrator or court, domestic or foreign, now pending or,
to the knowledge of the Company or the Trust after due inquiry, threatened
against or affecting the Trust or the Company or any of the Company's
subsidiaries, except for such actions, suits or proceedings that, if adversely
determined, would not, singly or in the aggregate, adversely affect the
consummation of the transactions contemplated by the Operative Documents or have
a Material Adverse Effect; and the aggregate of all pending legal or
governmental proceedings to which the Trust or the Company or any of its
subsidiaries is a party or of which any of their respective properties or assets
is subject, including ordinary routine litigation incidental to the business,
are not expected to result in a Material Adverse Effect.
(t) The accountants of the Company who certified the Financial
Statements (as defined below) are independent public accountants of the Company
and its subsidiaries within the meaning of the Securities Act, and the rules and
regulations of the Securities and Exchange Commission (the "Commission")
thereunder.
(u) The audited consolidated financial statements (including the
notes thereto) and schedules of the Company and its consolidated subsidiaries
for the fiscal year ended December 31, 2002 (the "Financial Statements") and the
interim unaudited consolidated financial statements of the Company and its
consolidated subsidiaries for the quarter ended September 30, 2002 (the "Interim
Financial Statements") provided to the Purchaser are the most recent available
audited and unaudited consolidated financial statements of the Company and its
consolidated subsidiaries, respectively, and fairly present in all material
respects, in accordance with U.S. generally accepted accounting principles, the
financial position of the Company and its consolidated subsidiaries, and the
results of operations and changes in financial condition as of the dates and for
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the periods therein specified, subject, in the case of Interim Financial
Statements, to year-end adjustments (which are expected to consist solely of
normal recurring adjustments). Such consolidated financial statements and
schedules have been prepared in accordance with U.S. generally accepted
accounting principles consistently applied throughout the periods involved
(except as otherwise noted therein).
(v) None of the Trust, the Company nor any of its subsidiaries has
any material liability, whether known or unknown, whether asserted or
unasserted, whether absolute or contingent, whether accrued or unaccrued,
whether liquidated or unliquidated, and whether due or to become due, including
any liability for taxes (and there is no past or present fact, situation,
circumstance, condition or other basis for any present or future action, suit,
proceeding, hearing, charge, complaint, claim or demand against the Company or
its subsidiaries that could give rise to any such liability), except for (i)
liabilities set forth in the Financial Statements or the Interim Financial
Statements and (ii) normal fluctuations in the amount of the liabilities
referred to in clause (i) above occurring in the ordinary course of business of
the Trust, the Company and all of its subsidiaries since the date of the most
recent balance sheet included in such Financial Statements.
(w) The Company's report on FRY-9C, dated September 30, 2002 (the
"FRY-9C"), provided to the Purchaser is the most recently available such report,
and the information therein fairly presents in all material respects the
financial position of the Company and its subsidiaries.
(x) Since the respective dates of the Financial Statements, Interim
Financial Statements and the FRY-9C, there has not been (A) any material adverse
change or development with respect to the condition (financial or otherwise),
earnings, business, assets or business prospects of the Company and its
subsidiaries, taken as a whole, whether or not occurring in the ordinary course
of business or (B) any dividend or distribution of any kind declared, paid or
made by the Company on any class of its capital stock other than regular
quarterly dividends on the Company's common stock.
(y) The Company is duly registered as a bank holding company under
the Bank Holding Company Act of 1956, as amended (the "Bank Holding Company
Act"), and the regulations of the Board of Governors of the Federal Reserve
System (the "Federal Reserve"), and the deposit accounts of the Company's
subsidiary banks are insured by the Federal Deposit Insurance Corporation
("FDIC") to the fullest extent permitted by law and the rules and regulations of
the FDIC, and no proceeding for the termination of such insurance are pending
or, to the knowledge of the Company or the Trust after due inquiry, threatened.
(z) The documents of the Company filed with the Commission in
accordance with the Exchange Act, from and including the commencement of the
fiscal year covered by the Company's most recent Annual Report on Form 10-K, at
the time they were or hereafter are filed by the Company with the Commission
(collectively, the "1934 Act Reports"), complied and will comply in all material
respects with the requirements of the Exchange Act and the rules and regulations
of the Commission thereunder (the "1934 Act Regulations"), and, at the date of
this Purchase Agreement and on the Closing Date, do not and will not include 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
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the circumstances under which they were made, not misleading; and other than
such instruments, agreements, contracts and other documents as are filed as
exhibits to the Company's Annual Report on Form 10-K, Quarterly Reports on Form
10-Q or Current Reports on Form 8-K, there are no instruments, agreements,
contracts or documents of a character described in Item 601 of Regulation S-K
promulgated by the Commission to which the Company or any of its subsidiaries is
a party. The Company is in compliance with all currently applicable requirements
of the Exchange Act that were added by the Xxxxxxxx-Xxxxx Act of 2002.
(aa) None of the Trust, the Company nor any of its subsidiaries, or
any of their respective officers, directors, employees or representatives, is
subject or is party to, or has received any notice from any Regulatory Agency
(as defined below) that any of them will become subject or party to any
investigation with respect to, any cease-and-desist order, agreement, civil
monetary penalty, consent agreement, memorandum of understanding or other
regulatory enforcement action, proceeding or order with or by, or is a party to
any commitment letter or similar undertaking to, or is subject to any directive
by, or has been a recipient of any supervisory letter from, or has adopted any
board resolutions at the request of, any Regulatory Agency that, in any such
case, currently restricts in any material respect the conduct of their business
or that in any material manner relates to their capital adequacy, their credit
policies, their management or their business (each, a "Regulatory Action"), nor
has the Trust, the Company or any of its subsidiaries been advised by any
Regulatory Agency that it is considering issuing or requesting any such
Regulatory Action; and there is no unresolved violation, criticism or exception
by any Regulatory Agency with respect to any report or statement relating to any
examinations of the Trust, the Company or any of its subsidiaries, except where
such unresolved violation, criticism or exception would not, singly or in the
aggregate, have a Material Adverse Effect. If the Company is a bank holding
company that is subject to the Bank Holding Company Act, it is a "well-run" bank
holding company that satisfies the criteria of the Federal Reserve's regulations
at 12 C.F.R. ss.225.14(c). Each of the Company's Subsidiaries that is a
depository institution, the accounts of which are insured by the FDIC (i) is
"well-capitalized" within the meaning of 12 U.S.C. ss.1831o and applicable
implementing regulations thereunder; and (ii) is not, and has not been notified
by any Regulatory Agency that it is in "troubled condition" within the meaning
of 12 U.S.C. ss.1831i and applicable implementing regulations thereunder. As
used herein, the term "Regulatory Agency" means any federal or state agency
charged with the supervision or regulation of depositary institutions or holding
companies of depositary institutions, or engaged in the insurance of depositary
institution deposits, or any court, administrative agency or commission or other
governmental agency, authority or instrumentality having supervisory or
regulatory authority with respect to the Trust, the Company or any of its
subsidiaries.
(bb) No labor dispute with the employees of the Trust, the Company or
any of its subsidiaries exists or, to the knowledge of the executive officers of
the Trust or the Company, is imminent, except those which would not, singly or
in the aggregate, have a Material Adverse Effect.
(cc) No filing with, or authorization, approval, consent, license,
order, registration, qualification or decree of, any Governmental Entity, other
than those that have been made or obtained, is necessary or required for the
11
performance by the Trust or the Company of their respective obligations under
the Operative Documents, as applicable, or the consummation by the Trust and the
Company of the transactions contemplated by the Operative Documents.
(dd) Each of the Trust, the Company and each subsidiary of the
Company has good and marketable title to all of its respective real and personal
properties, in each case free and clear of all Liens and defects, except for
those that would not, singly or in the aggregate, have a Material Adverse
Effect; and all of the leases and subleases under which the Trust, the Company
or any subsidiary of the Company holds properties are in full force and effect,
except where the failure of such leases and subleases to be in full force and
effect would not, singly or in the aggregate, have a Material Adverse Effect,
and none of the Trust, the Company or any subsidiary of the Company has any
notice of any claim of any sort that has been asserted by anyone adverse to the
rights of the Trust, the Company or any subsidiary of the Company under any such
leases or subleases, or affecting or questioning the rights of such entity to
the continued possession of the leased or subleased premises under any such
lease or sublease, except for such claims that would not, singly or in the
aggregate, have a Material Adverse Effect.
(ee) The Company has no present intention to exercise its option to
defer payments of interest on the Junior Subordinated Notes as provided in the
Indenture. The Company believes that the likelihood that it would exercise its
rights to defer payments of interest on the Junior Subordinated Notes as
provided in the Indenture at any time during which the Junior Subordinated Notes
are outstanding is remote because of the restrictions that would be imposed on
the Company's ability to declare or pay dividends or distributions on, or to
redeem, purchase, acquire or make a liquidation payment with respect to, any of
the Company's capital stock and on the Company's ability to make any payments of
principal, interest or premium on, or repay, repurchase or redeem, any of its
debt securities that rank pari passu in all respects with or junior in interest
to the Junior Subordinated Notes.
(ff) The information provided by the Company and the Trust pursuant
to this Purchase Agreement does not, as of the date hereof, and will not, as of
the Closing Date, contain any untrue statement of a material fact or omit to
state any material fact necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading.
5. Representations and Warranties of the Purchaser. The Purchaser
represents and warrants to, and agrees with, the Company and the Trust as
follows:
(a) The Purchaser is aware that the Securities have not been and will
not be registered under the Securities Act and may not be offered or sold within
the United States or to "U.S. persons" (as defined in Regulation S under the
Securities Act) except in accordance with Rule 903 of Regulation S under the
Securities Act or pursuant to an exemption from the registration requirements of
the Securities Act.
(b) The Purchaser is an "accredited investor," as such term is
defined in Rule 501(a) of Regulation D under the Securities Act.
12
(c) Neither the Purchaser, nor any of the Purchaser's affiliates, nor
any person acting on the Purchaser's or the Purchaser's Affiliate's behalf has
engaged, or will engage, in any form of "general solicitation or general
advertising" (within the meaning of Regulation D under the Securities Act) in
connection with any offer or sale of the Preferred Securities.
6. Agreements of the Company and the Trust. The Company and the Trust
jointly and severally agree with the Purchaser as follows:
(a) The Company and the Trust will arrange for the qualification of
the Preferred Securities for sale under the laws of such jurisdictions as the
Purchaser may designate and will maintain such qualifications in effect so long
as required for the sale of the Preferred Securities. The Company or the Trust,
as the case may be, will promptly advise the Purchaser of the receipt by the
Company or the Trust, as the case may be, of any notification with respect to
the suspension of the qualification of the Preferred Securities for sale in any
jurisdiction or the initiation or threatening of any proceeding for such
purpose.
(b) Neither the Company nor the Trust will, nor will either of them
permit any of its Affiliates to, nor will either of them permit any person
acting on its or their behalf (other than the Purchaser) to, resell any
Preferred Securities that have been acquired by any of them.
(c) Neither the Company nor the Trust will, nor will either of them
permit any of their Affiliates or any person acting on their behalf to, engage
in any "directed selling efforts" within the meaning of Regulation S under the
Securities Act with respect to the Securities.
(d) Neither the Company nor the Trust will, nor will either of them
permit any of their Affiliates or any person acting on their behalf to, directly
or indirectly, make offers or sales of any security, or solicit offers to buy
any security, under circumstances that would require the registration of any of
the Securities under the Securities Act.
(e) Neither the Company nor the Trust will, nor will either of them
permit any of its Affiliates or any person acting on their behalf to, engage in
any form of "general solicitation or general advertising" (within the meaning of
Regulation D) in connection with any offer or sale of the any of the Securities.
(f) So long as any of the Securities are outstanding, (i) the
Securities shall not be listed on a national securities exchange registered
under section 6 of the Exchange Act or quoted in a U.S. automated inter-dealer
quotation system and (ii) neither the Company nor the Trust shall be an open-end
investment company, unit investment trust or face-amount certificate company
that is, or is required to be, registered under section 8 of the Investment
Company Act, and, the Securities shall otherwise satisfy the eligibility
requirements of Rule 144A(d)(3).
(g) Each of the Company and the Trust shall furnish to the holders,
and to subsequent holders of the Preferred Securities, a duly completed and
executed certificate in the form attached hereto as Annex F, including the
attachments referenced in such Annex, which certificate and attachments shall be
so furnished by the Company and the Trust not later than forty five (45) days
after the end of each of the first three fiscal quarters of each fiscal year of
the Company and not later than ninety (90) days after the end of each fiscal
year of the Company.
13
(h) Each of the Company and the Trust will, during any period in
which it is not subject to and in compliance with section 13 or 15(d) of the
Exchange Act, or it is not exempt from such reporting requirements pursuant to
and in compliance with Rule 12g3-2(b) under the Exchange Act, shall provide to
each holder of the Securities and to each prospective purchaser (as designated
by such holder) of the Securities, upon the request of such holder or
prospective purchaser, any information required to be provided by Rule
144A(d)(4) under the Securities Act. If the Company and the Trust are required
to register under the Exchange Act, such reports filed in compliance with Rule
12g3-2(b) shall be sufficient information as required above. This covenant is
intended to be for the benefit of the Purchaser, the holders of the Securities,
and the prospective purchasers designated by the Purchaser and such holders,
from time to time, of the Securities.
(i) Neither the Company nor the Trust will, until one hundred eighty
(180) days following the Closing Date, without the Purchaser's prior written
consent, offer, sell, contract to sell, grant any option to purchase or
otherwise dispose of, directly or indirectly, (i) any Preferred Securities or
other securities of the Trust other than as contemplated by this Purchase
Agreement or (ii) any other securities convertible into, or exercisable or
exchangeable for, any Preferred Securities or other securities of the Trust.
7. Payment of Expenses. The Company, as depositor of the Trust, agrees
to pay all costs and expenses incident to the performance of the obligations of
the Company and the Trust under this Purchase Agreement, whether or not the
transactions contemplated herein are consummated or this Purchase Agreement is
terminated, including all costs and expenses incident to (i) the authorization,
issuance, sale and delivery of the Preferred Securities and any taxes payable in
connection therewith; (ii) the fees and expenses of qualifying the Preferred
Securities under the securities laws of the several jurisdictions as provided in
Section 6(a); (iii) the fees and expenses of the counsel, the accountants and
any other experts or advisors retained by the Company or the Trust; (iv) the
fees and all reasonable expenses of the Guarantee Trustee, the Property Trustee,
the Delaware Trustee, the Indenture Trustee and any other trustee or paying
agent appointed under the Operative Documents, including the fees and
disbursements of counsel for such trustees, which fees shall not exceed a $2,000
acceptance fee and $4,000 in administrative fees annually; (v) the fees and all
reasonable expenses of Xxxxxxxx, Xxxxxx & Finger, P.A., special Delaware counsel
retained by the Purchaser, which fees and expenses shall not exceed $2,000; and
(vi) the fees and all reasonable expenses of Mayer, Brown, Xxxx & Maw, special
counsel retained by the Purchaser, which fees and expenses shall not exceed
$32,750.
If the sale of the Preferred Securities provided for in this Purchase
Agreement is not consummated because any condition set forth in Section 3 to be
satisfied by either the Company or the Trust is not satisfied, because this
Purchase Agreement is terminated pursuant to Section 10 or because of any
failure, refusal or inability on the part of the Company or the Trust to perform
all obligations and satisfy all conditions on its part to be performed or
satisfied hereunder other than by a reason of a default by the Purchaser, the
Company will reimburse the Purchaser upon demand for all reasonable
out-of-pocket expenses (including the fees and expenses of each of the
Purchaser's counsel specified in subparagraphs (v) and (vi) of the immediately
preceding paragraph) that shall have been incurred by the Purchaser in
14
connection with the proposed purchase and sale of the Preferred Securities. The
Company shall not in any event be liable to the Purchaser for the loss of
anticipated profits from the transactions contemplated by this Purchase
Agreement.
8. Indemnification. (a) The Company and the Trust agree jointly and
severally to indemnify and hold harmless the Purchaser, the Purchaser's
affiliates, Trapeza Funding LLC, Trapeza Partners L.P. and Credit Suisse First
Boston Corporation (collectively, the "Indemnified Parties") and the Indemnified
Parties' respective directors, officers, employees and agents and each person
who "controls" the Indemnified Parties within the meaning of either the
Securities Act or the Exchange Act against any and all losses, claims, damages
or liabilities, joint or several, to which they or any of them may become
subject under the Securities Act, the Exchange Act or other federal or state
statutory law or regulation, at common law or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon (i) any untrue statement or alleged untrue statement of a
material fact contained in any information or documents furnished or made
available to the Purchaser by or on behalf of the Company, (ii) the omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading or (iii) the breach
or alleged breach of any representation, warranty or agreement of either Seller
contained herein, and agrees to reimburse each such Indemnified Party, as
incurred, for any legal or other expenses reasonably incurred by them in
connection with investigating or defending any such loss, claim, damage,
liability or action. This indemnity agreement will be in addition to any
liability which the Company or the Trust may otherwise have.
(b) The Company agrees to indemnify the Trust against all loss,
liability, claim, damage and expense whatsoever due from the Trust under
paragraph (a) above.
(c) Promptly after receipt by an Indemnified Party under this Section
8 of notice of the commencement of any action, such Indemnified Party will, if a
claim in respect thereof is to be made against the indemnifying party under this
Section 8, promptly notify the indemnifying party in writing of the commencement
thereof; but the failure so to notify the indemnifying party (i) will not
relieve the indemnifying party from liability under paragraph (a) above unless
and to the extent that such failure results in the forfeiture by the
indemnifying party of material rights and defenses and (ii) will not, in any
event, relieve the indemnifying party from any obligations to any Indemnified
Party other than the indemnification obligation provided in paragraph (a) above.
Purchaser shall be entitled to appoint counsel to represent the Indemnified
Party in any action for which indemnification is sought. 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 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. An indemnifying party will not,
without the prior written consent of the Indemnified Parties, settle or
compromise or consent to the entry of any judgment with respect to any pending
or threatened claim, action, suit or proceeding in respect of which
indemnification may be sought hereunder (whether or not the Indemnified Parties
15
are actual or potential parties to such claim, action, suit or proceeding)
unless such settlement, compromise or consent includes an unconditional release
of each Indemnified Party from all liability arising out of such claim, action,
suit or proceeding.
9. Contribution. (a) In order to provide for just and equitable
contribution in circumstances under which the indemnification provided for in
Section 8 hereof is for any reason held to be unenforceable for the benefit of
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 Sellers, on the one
hand, and the Purchaser, on the other hand, from the offering of the Securities
or (ii) if the allocation provided by clause (i) 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
Sellers, on the one hand, and the Purchaser, on the other hand, in connection
with the statements, omissions or breaches, which resulted in such losses,
liabilities, claims, damages or expenses, as well as any other relevant
equitable considerations.
(b) The relative benefits received by the Sellers, on the one hand,
and the Purchaser, on the other hand, in connection with the offering of the
Securities shall be deemed to be in the same respective proportions as the total
net proceeds from the offering of the Securities (before deducting expenses)
received by the Sellers and the Discount received by the Purchaser bear to the
aggregate of such net proceeds and commissions.
(c) The Sellers and the Purchaser agree that it would not be just and
equitable if contribution pursuant to this Section 9 were determined by pro rata
allocation or by any other method of allocation which does not take account of
the equitable considerations referred to above in this Section 9. The aggregate
amount of losses, liabilities, claims, damages and expenses incurred by an
Indemnified Party and referred to above in this Section 9 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, omission or alleged omission or breach or alleged breach.
(d) Notwithstanding any provision of this Section 9 to the contrary,
the Purchaser shall not be required to contribute any amount in excess of the
Discount.
(e) No person guilty of fraudulent misrepresentation (within the
meaning of section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.
(f) For purposes of this Section 9, the Purchaser, each person, if
any, who controls the Purchaser within the meaning of section 15 of the
Securities Act or section 20 of the Exchange Act and the respective partners,
directors, officers, employees and agents of the Purchaser or any such
controlling person shall have the same rights to contribution as the Purchaser,
while each officer and director of the Company, each trustee of the Trust and
16
each person, if any, who controls the Company within the meaning of section 15
of the Securities Act or section 20 of the Exchange Act shall have the same
rights to contribution as the Sellers.
10. Termination. This Purchase Agreement shall be subject to termination in
the absolute discretion of the Purchaser, by notice given to the Company and the
Trust prior to delivery of and payment for the Preferred Securities, if prior to
such time (i) a downgrading shall have occurred in the rating accorded the
Company's debt securities or preferred stock by any "nationally recognized
statistical rating organization," as that term is used by the Commission in Rule
15c3-1(c)(2)(vi)(F) under the Exchange Act, or such organization shall have
publicly announced that it has under surveillance or review, with possible
negative implications, its rating of the Company's debt securities or preferred
stock, (ii) the Trust shall be unable to sell and deliver to the Purchaser at
least $7,000,000 stated liquidation value of Preferred Securities, (iii) the
Company or any of its subsidiaries that is an insured depository institution
shall cease to be "adequately-capitalized" within the meaning of 12 U.S.C.
Section 1831 and applicable regulations adopted thereunder, or any formal
administrative or judicial action is taken by any appropriate federal banking
agency against the Company or any such insured subsidiary for unsafe and unsound
banking practices, or violations of law, (iv) a suspension or material
limitation in trading in securities generally shall have occurred on the New
York Stock Exchange, (v) a suspension or material limitation in trading in any
of the Company's securities shall have occurred on the exchange or quotation
system upon which the Company' securities are traded, if any, (vi) a general
moratorium on commercial banking activities shall have been declared either by
federal or South Carolina authorities or (vii) there shall have occurred any
outbreak or escalation of hostilities, or declaration by the United States of a
national emergency or war or other calamity or crisis the effect of which on
financial markets is such as to make it, in the Purchaser's judgment,
impracticable or inadvisable to proceed with the offering or delivery of the
Preferred Securities.
11. Representations and Indemnities to Survive. The respective agreements,
representations, warranties, indemnities and other statements of the Company and
the Trust or their respective officers or trustees and of the Purchaser set
forth in or made pursuant to this Purchase Agreement will remain in full force
and effect, regardless of any investigation made by or on behalf of the
Purchaser, the Company or the Trust or any of the their respective officers,
directors, trustees or controlling persons, and will survive delivery of and
payment for the Preferred Securities. The provisions of Sections 7, 8 and 9
shall survive the termination or cancellation of this Purchase Agreement.
12. Amendments. This Purchase Agreement may not be modified, amended,
altered or supplemented, except upon the execution and delivery of a written
agreement by each of the parties hereto.
13. Notices. All communications hereunder will be in writing and
effective only on receipt, and, if sent to the Purchaser, will be mailed,
delivered by hand or courier or sent by facsimile and confirmed to the Purchaser
c/o Trapeza Funding, LLC, 000 Xxxx Xxxxxx, Xxxxx 000, Xxxxxxxxxx, Xxxx 00000,
Attention: Xxxxxx X. Xxxxx, Facsimile: (000) 000-0000; with a copy to Xxxxx,
17
Xxxxx, Xxxx & Maw, 000 Xxxxx XxXxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000, Attention:
J. Xxxx Xxxxxxxxx, Facsimile: (000) 000-0000; and if sent to the Company or the
Trust, will be mailed, delivered by hand or courier or sent by facsimile and
confirmed to it at Southcoast Financial Corporation, 000 Xxxxxxx Xxxxx
Xxxxxxxxx, Xx. Xxxxxxxx, Xxxxx Xxxxxxxx, 00000, Attention: Xxxxxx X. Xxxxx,
Facsimile: ( 000) 000-0000.
14. Successors and Assigns. This Purchase Agreement will inure to the
benefit of and be binding upon the parties hereto and their respective
successors and permitted assigns. Nothing expressed or mentioned in this
Purchase Agreement is intended or shall be construed to give any person other
than the parties hereto and the affiliates, directors, officers, employees,
agents and controlling persons referred to in Section 8 hereof and their
successors, assigns, heirs and legal representatives, any right or obligation
hereunder. None of the rights or obligations of the Company or the Trust under
this Purchase Agreement may be assigned, whether by operation of law or
otherwise, without the Purchaser's prior written consent. The rights and
obligations of the Purchaser under this Purchase Agreement may be assigned by
the Purchaser without the Company's or the Trust's consent; provided that the
assignee assumes the obligations of the Purchaser under this Purchase Agreement.
15. Applicable Law. THIS PURCHASE AGREEMENT WILL BE GOVERNED BY AND
CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK
WITHOUT REFERENCE TO PRINCIPLES OF CONFLICTS OF LAW (OTHER THAN SECTION 5-1401
OF THE GENERAL OBLIGATIONS LAW).
16. Submission to Jurisdiction. ANY LEGAL ACTION OR PROCEEDING BY OR
AGAINST ANY PARTY HERETO OR WITH RESPECT TO OR ARISING OUT OF THIS PURCHASE
AGREEMENT MAY BE BROUGHT IN OR REMOVED TO THE COURTS OF THE STATE OF NEW YORK,
IN AND FOR THE COUNTY OF NEW YORK, OR OF THE UNITED STATES OF AMERICA FOR THE
SOUTHERN DISTRICT OF NEW YORK (IN EACH CASE SITTING IN THE BOROUGH OF
MANHATTAN). BY EXECUTION AND DELIVERY OF THIS PURCHASE AGREEMENT, EACH PARTY
ACCEPTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND
UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID COURTS (AND COURTS OF APPEALS
THEREFROM) FOR LEGAL PROCEEDINGS ARISING OUT OF OR IN CONNECTION WITH THIS
PURCHASE AGREEMENT.
17. Counterparts and Facsimile. This Purchase Agreement may be executed
by any one or more of the parties hereto in any number of counterparts, each of
which shall be deemed to be an original, but all such counterparts shall
together constitute one and the same instrument. This Purchase Agreement may be
executed by any one or more of the parties hereto by facsimile.
18
IN WITNESS WHEREOF, this Purchase Agreement has been entered into as
of the date first written above.
[SIGNATURES OMITTED]
19
SCHEDULE 1
List of Significant Subsidiaries
Southcoast Community Bank
20
SCHEDULE 4
Exceptions to Company's Representations and Warranties
The following are exceptions to the representations and warranties of
the Company set forth in the indicated sections of Section 4 of this Purchase
Agreement:
(q) The common stock of the Company's banking subsidiary is
pledged to secure a $6 million line of credit with First
Tennessee Bank National Association, dated October 10, 2002
(the "First Tennessee Line").
(z) Loan documents related to the First Tennessee Line.
(dd) 1. The common stock of the banking subsidiary is pledged
(see (q) above).
2. Federal Home Loan Bank of Atlanta ("FHLB") stock and
residential mortgage loans are pledged to FHLB to
secure borrowings from FHLB in the ordinary course of
business.
3. Investment securities are pledged to secure public
deposits and for other purposes permitted or required
by law in the ordinary course of business.
21
ANNEX A-I
Pursuant to Section 3(c)(i) of the Purchase Agreement, Mayer, Brown,
Xxxx & Maw, special counsel for the Purchaser, shall deliver an opinion to the
effect that:
(i) the Company and each Significant Subsidiary is validly
existing as a corporation in good standing under the laws of the
jurisdiction in which it is chartered or organized; the Company has
corporate power and authority to (i) execute and deliver, and to
perform its obligations under, the Operative Documents to which it is a
party and (ii) issue and perform its obligations under the Notes;
(ii) neither the issue and sale of the Common Securities, the
Preferred Securities or the Junior Subordinated Notes, nor the purchase
by the Trust of the Junior Subordinated Notes, nor the execution and
delivery of and compliance with the Operative Documents by the Company
or the Trust nor the consummation of the transactions contemplated
thereby will constitute a breach or violation of the Trust Agreement or
the charter or by-laws of the Company;
(iii) the Amended and Restated Trust Agreement has been duly
authorized, executed and delivered by the Company and duly executed and
delivered by the Administrative Trustees;
(iv) each of the Guarantee and the Indenture has been duly
authorized, executed and delivered by the Company and, assuming it has
been duly authorized, executed and delivered by the Guarantee Trustee
and the Indenture Trustee, respectively, constitutes a legal, valid and
binding obligation of the Company enforceable against the Company in
accordance with its terms, subject to applicable bankruptcy, insolvency
and similar laws affecting creditors' rights generally and to general
principles of equity;
(v) the Junior Subordinated Notes have been duly authorized
and executed by the Company and delivered to the Indenture Trustee for
authentication in accordance with the Indenture and, when authenticated
in accordance with the provisions of the Indenture and delivered to the
Trust against payment therefor, will constitute legal, valid and
binding obligations of the Company entitled to the benefits of the
Indenture and enforceable against the Company in accordance with their
terms, subject to applicable bankruptcy, insolvency and similar laws
affecting creditors' rights generally and to general principles of
equity;
(vi) the Trust is not, and, following the issuance of the
Preferred Securities and the consummation of the transactions
contemplated by the Operative Documents and the application of the
proceeds therefrom, the Trust will not be, an "investment company" or
an entity "controlled" by an "investment company," in each case within
the meaning of Section 3(a) of the Investment Company Act; and
(vii) assuming (i) the accuracy of the representations and
warranties, and compliance with the agreements contained in the
Purchase Agreement and (ii) that the Preferred Securities are sold in a
manner contemplated by, and in accordance with the Purchase Agreement
and the Amended and Restated Trust Agreement, it is not necessary in
A-I-1
connection with the offer, sale and delivery of the Preferred
Securities by the Trust to the Purchaser, to register any of the
Securities under the Securities Act or to require qualification of the
Indenture under the Trust Indenture Act of 1939, as amended.
(viii) the Purchase Agreement has been duly authorized,
executed and delivered by the Company; and
(ix) the Purchase Agreement has been duly authorized, executed
and delivered by the Trust.
In rendering such opinions, such counsel may (A) state that its
opinion is limited to the laws of the State of New York, the Delaware General
Corporation Law and the federal laws of the United States; (B) as to matters
involving the application of laws of any jurisdiction other than the State of
New York and the Delaware General Corporation Law or the federal laws of the
United States, (i) rely, to the extent deemed proper and specified in such
opinion, upon the opinion of other counsel of good standing believed to be
reliable and who are satisfactory to the Purchaser or (ii) assume such law is
substantially similar to the law of the State of New York and, (C) as to matters
of fact, rely to the extent deemed proper, on certificates of responsible
officers of the Company and public officials.
A-I-2
ANNEX A-II
Pursuant to Section 3(c)(ii) of the Purchase Agreement, General
Counsel for the Company shall deliver an opinion, or the Company shall provide
an Officers' Certificate, to the effect that:
(i) all of the issued and outstanding shares of capital stock
of each Significant Subsidiary are owned of record by the Company, and
the issuance of the Preferred Securities and the Common Securities is
not subject to any contractual preemptive rights known to such
[counsel/officer];
(ii) no consent, approval, authorization or order of any court
or governmental authority is required for the issue and sale of the
Common Securities, the Preferred Securities or the Junior Subordinated
Notes, the purchase by the Trust of the Junior Subordinated Notes, the
execution and delivery of and compliance with the Operative Documents
by the Company or the Trust or the consummation of the transactions
contemplated in the Operative Documents, except such approvals
(specified in such [opinion/certificate]) as have been obtained;
(iii) to the knowledge of such [counsel/officer], there is no
action, suit or proceeding before or by any government, governmental
instrumentality, arbitrator or court, domestic or foreign, now pending
or threatened against or affecting the Trust or the Company or any
Significant Subsidiary that could adversely affect the consummation of
the transactions contemplated by the Operative Documents or could have
a Material Adverse Effect.
(iv) the Company is duly registered as a bank holding company
under the Bank Holding Company Act and the regulations thereunder of
the Federal Reserve Board, and the deposit accounts of the Company's
banking subsidiary are insured by the FDIC to the fullest extent
permitted by law and the rules and regulations of the FDIC, and no
proceeding for the termination of such insurance are pending or, to
such person's knowledge, threatened;
(v) The execution, delivery and performance of the Operative
Documents, as applicable, by the Company and the Trust and the
consummation by the Company and the Trust of the transactions
contemplated by the Operative Documents, as applicable, (i) will not
result in any violation of the charter or bylaws of the Company, the
charter or bylaws of the Bank, the Amended and Restated Trust Agreement
or the Certificate of Trust, and (ii) will not conflict with, or result
in a breach of any of the terms or provisions of, or constitute a
default (or an event which, with notice or lapse of time or both, would
constitute a default) under, or result in the creation or imposition of
any lien, charge and encumbrance upon any assets or properties of the
Company or any Significant Subsidiary under, (a) any agreement,
indenture, mortgage or instrument that the Company or any Significant
A-II-1
Subsidiary of the Company is a party to or by which it may be bound or
to which any of its assets or properties may be subject, or (b) any
existing applicable law, rule or administrative regulation [for General
Counsel only: except that I express no opinion with respect to the
securities laws of the State of Delaware] of any court or governmental
agency or authority having jurisdiction over the Company or any
Significant Subsidiary of the Company or any of their respective assets
or properties, except in case of (ii), where any such violation,
conflict, breach, default, lien, charge or encumbrance, would not have
a material adverse effect on the assets, properties, business, results
of operations or financial condition of the Company and its
subsidiaries, taken as whole.
[Applies only to in-house counsel opinion] [In rendering such
opinions, such counsel may (A) state that the above is limited to the laws of
the States of [Jurisdiction of bar admission], (B) rely as to matters of fact,
to the extent deemed proper, on certificates of responsible officers of the
Company and public officials.]
A-II-2
ANNEX B
Pursuant to Section 3(d) of the Purchase Agreement, Mayer, Brown, Xxxx
& Maw, special tax counsel for the Purchaser, shall deliver an opinion to the
effect that:
(i) the Trust will be classified for United States federal
income tax purposes as a grantor trust and not as an association or a
publicly traded partnership taxable as a corporation; and
(ii) for United States federal income tax purposes, the Junior
Subordinated Notes will constitute indebtedness of the Company.
In rendering such opinions, such counsel may (A) state that its opinion
is limited to the laws of the State of New York and the federal laws of the
United States and (B) rely as to matters of fact, to the extent deemed proper,
on certificates of responsible officers of the Company and public officials.
B-1
ANNEX C
Pursuant to Section 3(e) of the Purchase Agreement, Xxxxxxxx, Xxxxxx &
Finger, P.A., special Delaware counsel for the Purchaser, shall deliver an
opinion to the effect that:
(i) the Trust has been duly created and is validly existing
in good standing as a statutory trust under the Delaware Statutory
Trust Act, and all filings required under the laws of the State of
Delaware with respect to the creation and valid existence of the
Trust as a statutory trust have been made;
(ii) under the Delaware Statutory Trust Act and the Amended
and Restated Trust Agreement, the Trust has the trust power and
authority (A) to own property and conduct its business, all as
described in the Amended and Restated Trust Agreement, (B) to execute
and deliver, and to perform its obligations under, each of the
Purchase Agreement, the Common Securities Subscription Agreement, the
Junior Subordinated Note Purchase Agreement and the Preferred
Securities and the Common Securities and (C) to purchase and hold the
Junior Subordinated Notes;
(iii) under the Delaware Statutory Trust Act, the
certificate attached to the Amended and Restated Trust Agreement as
Exhibit C is an appropriate form of certificate to evidence ownership
of the Preferred Securities; the Preferred Securities have been duly
authorized by the Trust Agreement and, when issued and delivered
against payment of the consideration as set forth in the Purchase
Agreement, the Preferred Securities will be validly issued and
(subject to the qualifications set forth in this paragraph) fully
paid and nonassessable and will represent undivided beneficial
interests in the assets of the Trust; the holders of the Preferred
Securities will be entitled to the benefits of the Amended and
Restated Trust Agreement and, as beneficial owners of the Trust, will
be entitled to the same limitation of personal liability extended to
stockholders of private corporations for profit organized under the
General Corporation Law of the State of Delaware; and such counsel
may note that the holders of the Preferred Securities may be
obligated, pursuant to the Amended and Restated Trust Agreement, to
(A) provide indemnity and/or security in connection with and pay
taxes or governmental charges arising from transfers or exchanges of
Preferred Securities certificates and the issuance of replacement
Preferred Securities certificates and (B) provide security or
indemnity in connection with requests of or directions to the
Property Trustee to exercise its rights and remedies under the
Amended and Restated Trust Agreement;
(iv) 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 related Amended
and Restated Trust Agreement and the related Common Securities
Subscription Agreement, will be validly issued and fully paid and
will represent undivided beneficial interests in the assets of the
Trust entitled to the benefits of the Trust Agreement;
C-1
(v) under the Delaware Statutory Trust Act and the Amended
and Restated Trust Agreement, the issuance of the Preferred
Securities and the Common Securities is not subject to preemptive or
other similar rights;
(vi) under the Delaware Statutory Trust Act and the Amended
and Restated Trust Agreement, the execution and delivery by the Trust
of the Purchase Agreement, the Common Securities Subscription
Agreement and the Junior Subordinated Note Purchase Agreement, and
the performance by the Trust of its obligations thereunder, have been
duly authorized by all necessary trust action on the part of the
Trust;
(vii) the Amended and Restated Trust Agreement constitutes
a legal, valid and binding obligation of the Company and the
Trustees, and is enforceable against the Company and the Trustees, in
accordance with its terms subject, as to enforcement, to the effect
upon the Amended and Restated Trust Agreement of (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;
(viii) the issuance and sale by the Trust of the Preferred
Securities and the Common Securities, the purchase by the Trust of
the Junior Subordinated Notes, the execution, delivery and
performance by the Trust of the Purchase Agreement, the Common
Securities Subscription Agreement and the Junior Subordinated Note
Purchase Agreement, the consummation by the Trust of the transactions
contemplated by the Purchase Agreement and compliance by the Trust
with its obligations thereunder do not violate (i) any of the
provisions of the Certificate of Trust or the Amended and Restated
Trust Agreement or (ii) any applicable Delaware law, rule or
regulation;
(ix) no filing with, or authorization, approval, consent,
license, order, registration, qualification or decree of, any
Delaware court or Delaware governmental authority or Delaware agency
is necessary or required solely in connection with the issuance and
sale by the Trust of the Common Securities or the Preferred
Securities, the purchase by the Trust of the Junior Subordinated
Notes, the execution, delivery and performance by the Trust of the
Purchase Agreement, the Common Securities Subscription Agreement and
the Junior Subordinated Note Purchase Agreement, the consummation by
the Trust of the transactions contemplated by the Purchase Agreement
and compliance by the Trust with its obligations thereunder; and
(x) the holders of the Preferred Securities (other than
those holders who reside or are domiciled in the State of Delaware)
will have no liability for income taxes imposed by the State of
Delaware solely as a result of their participation in the Trust and
the Trust will not be liable for any income tax imposed by the State
of Delaware.
C-2
In rendering such opinions, such counsel may (A) state that its
opinion is limited to the laws of the State of Delaware and (B) rely as to
matters of fact, to the extent deemed proper, on certificates of responsible
officers of the Company and public officials.
C-3
ANNEX D
Pursuant to Section 3(f) of the Purchase Agreement, White & Case,
special counsel for the Guarantee Trustee, the Property Trustee and the
Indenture Trustee, shall deliver an opinion to the effect that:
(i) The Bank of New York, is a New York banking corporation
with trust powers duly organized and validly existing in good standing
under the laws of the State of New York with all necessary corporate
power and authority to execute, deliver and perform its obligations
under the terms of the Guarantee, the Amended and Restated Trust
Agreement and the Indenture;
(ii) the execution, delivery and performance by The Bank of
New York of the Guarantee, the Amended and Restated Trust Agreement and
the Indenture have been duly authorized by all necessary corporate
action on the part of The Bank of New York, each of the Guarantee, the
Amended and Restated Trust Agreement and the Indenture has been duly
executed and delivered by The Bank of New York, and each of the
Guarantee and the Indenture constitutes the legal, valid and binding
obligation of The Bank of New York enforceable against The Bank of New
York in accordance with its terms, subject to applicable bankruptcy,
insolvency and similar laws affecting creditors' rights generally and
to general principles of equity;
(iii) the execution, delivery and performance of the
Guarantee, the Amended and Restated Trust Agreement and the Indenture
by The Bank of New York do not conflict with or constitute a breach of
(A) the articles of association or by-laws of The Bank of New York or
(B) any law or regulation of the United States of America or the State
of New York governing the banking or trust powers of the Bank of New
York;
(iv) no consent, approval or authorization of, or registration
with or notice to, any governmental authority or agency of the United
States of America governing the banking or trust powers of The Bank of
New York is required for the execution, delivery or performance by it
of the Guarantee, the Amended and Restated Trust Agreement or the
Indenture;
(v) the Junior Subordinated Notes have been duly authenticated
and delivered by The Bank of New York; and
(vi) The Preferred Securities have been duly authenticated and
delivered by The Bank of New York.
In rendering such opinions, such counsel may (A) state that its
opinion is limited to the laws of the State of New York and the federal laws of
the United States and (B) rely as to matters of fact, to the extent deemed
proper, on certificates of responsible officers of the Company and public
officials.
D-1
ANNEX E
Pursuant to Section 3(g) of the Purchase Agreement, Xxxxxxxx, Xxxxxx &
Finger, P.A., counsel for the Purchaser, shall deliver an opinion to the effect
that:
(i) The Bank of New York (Delaware) is duly incorporated and
validly existing as a Delaware banking corporation under the laws of
the State of Delaware with trust powers and with its principal place of
business in the State of Delaware;
(ii) The Bank of New York (Delaware) has the corporate power
and authority to execute, deliver and perform its obligations under,
and has taken all necessary corporate action to authorize the
execution, delivery and performance of, the Amended and Restated Trust
Agreement and to consummate the transactions contemplated thereby;
(iii) The Amended and Restated Trust Agreement has been duly
authorized, executed and delivered by The Bank of New York (Delaware)
and constitutes a legal, valid and binding obligation of The Bank of
New York (Delaware), and is enforceable against The Bank of New York
(Delaware), in accordance with its terms subject as to enforcement, to
the effect upon the Trust Agreement of (i) applicable bankruptcy,
insolvency, reorganization, moratorium, receivership, fraudulent
conveyance or transfer and 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;
(iv) The execution, delivery and performance by The Bank of
New York (Delaware) of the Amended and Restated Trust Agreement do not
conflict with or result in a violation of (A) articles of association
or by-laws of The Bank of New York (Delaware) or (B) any law or
regulation of the State of Delaware or the United States of America
governing the banking or trust powers of The Bank of New York
(Delaware) or, to our knowledge, without independent investigation, of
any indenture, mortgage, bank credit agreement, note or bond purchase
agreement, long-term lease, license or other agreement or instrument to
which The Bank of New York (Delaware) is a party or by which it is
bound or, to our knowledge, without independent investigation, of any
judgment or order applicable to The Bank of New York (Delaware); and
(v) No approval, authorization or other action by, or filing
with, any governmental authority of the State of Delaware or the United
States of America governing the banking and trust powers of The Bank of
New York (Delaware) is required in connection with the execution and
E-1
delivery by The Bank of New York (Delaware) of the Amended and Restated
Trust Agreement or the performance by The Bank of New York (Delaware)
of its obligations thereunder, except for the filing of the Certificate
of Trust with the Secretary of State of the State of Delaware, which
Certificate of Trust has been filed with the Secretary of State of the
State of Delaware.
In rendering such opinions, such counsel may (A) state that its
opinion is limited to the laws of the State of Delaware and the federal laws of
the United States and (B) rely as to matters of fact, to the extent deemed
proper, on certificates of responsible officers of the Company and public
officials.
E-2
[Annex F Omitted]
