150,000
6.29% Capital Securities
FULTON CAPITAL TRUST I
PURCHASE AGREEMENT
January 20, 2006
Sandler O'Neill & Partners, L.P.,
As Representative of the several
Underwriters named in Schedule I hereto
919 Third Avenue
6th Floor
New York, New York 10022
Ladies and Gentlemen:
Fulton Capital Trust I (the "Trust"), a statutory trust organized
under the Delaware Statutory Trust Act, 12 Del. C. Section 3801 et seq. (the
"Delaware Act"), Fulton Financial Corporation, a Pennsylvania corporation (the
"Company" and together with the Trust, the "Offerors"), and FFC Management, Inc.
("FFC"), a Delaware corporation, confirm their respective agreements (together,
the "Agreement") with Sandler O'Neill & Partners, L.P. ("Sandler O'Neill") and
the other Underwriters named in Schedule I hereto (the "Underwriters", which
term shall also include any underwriter substituted as provided pursuant to
Section 10 hereof), for whom Sandler O'Neill is acting as the Representative
(the "Representative"), with respect to the issue and sale by the Trust and the
purchase by the Underwriters, acting severally and not jointly, of 6.29% Capital
Securities (liquidation amount of $1,000 per security) of the Trust (the
"Capital Securities"). The Capital Securities will be guaranteed by the Company,
to the extent described in the Prospectus (as defined below), with respect to
distributions and payments upon liquidation, redemption and otherwise pursuant
to the Guarantee Agreement (the "Guarantee"), to be dated as of the Closing Time
(as defined in Section 2 hereof), between the Company and Wilmington Trust
Company, as Guarantee Trustee (the "Guarantee Trustee"). The Capital Securities
will be issued in book-entry only form to Cede & Co. as nominee of The
Depository Trust Company ("DTC") pursuant to the Letter of Representations, to
be dated as of the Closing Time (the "DTC Agreement"), between the Trust and
DTC.
The entire proceeds from the sale of the Capital Securities will be
combined with the entire proceeds from the sale by the Trust to the Company of
the Trust's common securities (the "Common Securities"), and will be used by the
Trust to purchase $154,640,000 aggregate principal amount of 6.29% Junior
Subordinated Deferrable Interest Debt Securities due 2036 (the "Debt
Securities") issued by the Company. The Capital Securities and the Common
Securities will be issued pursuant to the Amended and Restated Declaration of
Trust, to be dated as of the Closing Time (the "Amended Declaration"), among the
Company, as sponsor, the Administrators named therein (the "Administrators"),
Wilmington Trust Company, as Institutional Trustee (the "Institutional
Trustee"), Wilmington Trust Company, as Delaware Trustee (the "Delaware
Trustee"), and the holders, from time to time, of undivided beneficial interests
in the assets of the Trust. The Debt Securities will be issued pursuant to the
Indenture, to be dated as of the Closing Time (the "Indenture"), between the
Company and Wilmington Trust Company, as Indenture Trustee (the "Indenture
Trustee").
The Capital Securities, the Guarantee and the Debt Securities are
hereinafter collectively referred to as the "Securities." The Indenture, the
Amended Declaration, the Guarantee, the DTC Agreement and this Agreement are
hereinafter referred to collectively as the "Operative Documents."
The Company and the Trust have filed with the Securities and Exchange
Commission (the "Commission") an "automatic shelf registration statement" (as
defined in Rule 405 of the rules and regulations (the "1933 Act Regulations") of
the Commission under the Securities Act of 1933, as amended (the "1933 Act")) on
Form S-3 (No. 333-130718) covering the registration of certain securities,
including the Securities, under 1933 Act and the 1933 Act Regulations, which
became effective upon filing under Rule 462(e) of the 1933 Act Regulations
("Rule 462(e)"). Such registration statement, at any given time, including the
amendments thereto existing at such time, the exhibits and any schedules thereto
on file with the Commission at such time, the information incorporated by
reference therein pursuant to Item 12 of Form S-3 under the 1933 Act at such
time and the information otherwise deemed to be a part thereof or included
therein at such time by the 1933 Act Regulations, is referred to herein as the
"Registration Statement". The Registration Statement at the time it originally
became effective is herein called the "Original Registration Statement".
Promptly after execution and delivery of this Agreement, the Company and the
Trust will prepare and file a prospectus supplement relating to the Securities
with the Commission in accordance with the provisions of Rule 430B of the 1933
Act Regulations ("Rule 430B") and Rule 424(b) of the 1933 Act Regulations ("Rule
424(b)"). Any information included in such prospectus supplement that was
omitted from the Original Registration Statement or any post-effective amendment
thereto that is deemed to be part thereof and included therein pursuant to Rule
430B is referred to herein as the "Rule 430B Information". The final prospectus
and prospectus supplement relating to the Securities, including the documents
incorporated by reference or deemed to be incorporated by reference therein
pursuant to Item 12 of Form S-3 under the 1933 Act, in the form first furnished
to the Underwriters for use in connection with the offering of the Securities,
are collectively referred to herein as the "Prospectus." Each prospectus and
prospectus supplement used in connection with the offering of the Securities
that omitted the Rule 430B Information is each herein called a "preliminary
prospectus." For purposes of this Agreement, all references to the Registration
Statement, the Prospectus or any preliminary prospectus or any amendment or
supplement to any of the foregoing shall be deemed to include the copy filed
with the Commission pursuant to its Electronic Data Gathering, Analysis and
Retrieval system ("EDGAR").
All references in this Agreement to financial statements and schedules
and other information which is "contained," "included" or "stated" (or other
references of like import) in the Registration Statement, the Prospectus or any
preliminary prospectus shall be deemed to include all such financial statements
and schedules and other information which are incorporated by reference in or
otherwise deemed by the 1933 Act Regulations to be a part of or included in
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the Registration Statement, the Prospectus or any preliminary prospectus, as the
case may be, prior to the execution of this Agreement; and all references in
this Agreement to amendments or supplements to the Registration Statement, the
Prospectus or any preliminary prospectus shall be deemed to include the filing
of any document under the Securities Exchange Act of 1934, as amended (the "1934
Act"), which is incorporated by reference in or otherwise deemed by the 1933 Act
Regulations to be a part of or included in the Registration Statement, the
Prospectus or any preliminary prospectus, as the case may be, after the
execution of this Agreement.
SECTION 1. Representations and Warranties.
The Offerors represent and warrant, jointly and severally, to each of
the Underwriters as of the date hereof, as of the Applicable Time (as defined in
Section 1(a)(2) hereof) and as of the Closing Time, and agree with each of the
Underwriters, as follows:
(1) (A) Status as Well Known Seasoned Issuer. At the time of filing
the Original Registration Statement, (B) at the time of the most recent
amendment to the Original Registration Statement for the purposes of complying
with Section 10(a)(3) of the 1933 Act (whether such amendment was by
post-effective amendment, incorporated report filed pursuant to Section 13 or
15(d) of the 1934 Act or form of prospectus), (C) at the time the Company or the
Trust or any person acting on its or their behalf (within the meaning, for this
subsection only, of Rule 163(c) of the 1933 Act Regulations) made any offer
relating to the Securities in reliance on the exemption of Rule 163 of the 1933
Act Regulations ("Rule 163") and (D) at the date hereof, each of the Company and
the Trust was and is a "well-known seasoned issuer" (as defined in Rule 405),
including not having been and not being an "ineligible issuer" (as defined in
Rule 405). The Registration Statement is an "automatic shelf registration
statement" (as defined in Rule 405), and the Securities, as of the date of their
registration on the Original Registration Statement, were, and, as of the date
hereof and as of the Closing Time, remain, eligible for registration by the
Company and the Trust on an "automatic shelf registration statement" under Rule
405. Neither the Company nor the Trust has received from the Commission any
notice pursuant to Rule 401(g)(2) of the 1933 Act Regulations objecting to the
use of the automatic shelf registration statement form.
At the earliest time after the time of filing the Original
Registration Statement that the Company, the Trust or another offering
participant made a bona fide offer (within the meaning of Rule 164(h)(2) of the
1933 Act Regulations) of the Securities, neither the Company nor the Trust was
or is an "ineligible issuer" (as defined in Rule 405).
(2) Registration Statement, Prospectus and Disclosure Package at Time
of Sale. The Original Registration Statement became effective upon filing under
Rule 462(e) on December 27, 2005 and any post-effective amendment thereto also
become effective upon filing under Rule 462(e). No stop order suspending the
effectiveness of the Registration Statement has been issued under the 1933 Act
and, to the knowledge of the Company or the Trust, no proceedings for that
purpose have been instituted or are pending or are contemplated by the
Commission, and any request on the part of the Commission for additional
information has been complied with.
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Any offer that is a written communication relating to the Securities
made by the Company or the Trust or any person acting on its or their behalf
(within the meaning, for this subsection only, of Rule 163(c) of the 1933 Act
Regulations) prior to the filing of the Original Registration Statement has been
filed with the Commission in accordance with the exemption provided by Rule 163
and otherwise complied with the requirements of Rule 163, including, without
limitation, the legending requirement, to qualify such offer for the exemption
from Section 5(c) of the 1933 Act provided by Rule 163.
At the respective times the Original Registration Statement and each
post-effective amendment thereto became effective, at each deemed effective date
with respect to the Securities pursuant to Rule 430B(f)(2) of the 1933 Act
Regulations and at the Closing Time, the Registration Statement complied,
complies and will comply in all material respects with the requirements of the
1933 Act, the 1933 Act Regulations, the Trust Indenture Act of 1939, as amended
(the "1939 Act"), and the rules and regulations of the Commission under the 1939
Act (the "1939 Act Regulations"), and did not, does not and will 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 not misleading.
Neither the Prospectus nor any amendment or supplement thereto, when read
together with the Prospectus, at the time the Prospectus or any such amendment
or supplement was issued or at the Closing Time, included or will include an
untrue statement of a material fact or omitted or will omit to state a material
fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. Each preliminary
prospectus and the Prospectus complied, when filed with the Commission, in all
material respects with the 1933 Act, 1933 Act Regulations and the 1939 Act, and
each preliminary prospectus and the Prospectus delivered to the Underwriters for
use in connection with the offering of the Securities was identical to the
electronically transmitted copies thereof filed with the Commission pursuant to
EDGAR, except to the extent permitted by Regulation S-T.
As of the Applicable Time, the Issuer Free Writing Prospectus (as
defined below) and the Statutory Prospectus (as defined below), when considered
together (collectively, the "Disclosure Package"), did not include any untrue
statement of a material fact or omit to state any material fact necessary in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading.
As used in this subsection and elsewhere in this Agreement:
"Applicable Time" means 12:44 p.m. (Eastern time) on January 20, 2006,
or such other time as agreed by the Company and the Representative.
"Statutory Prospectus" as of any time means the prospectus and
prospectus supplement relating to the Securities that are, immediately prior to
that time, either included in the Registration Statement or deemed to be a part
thereof, including any document incorporated therein by reference immediately
prior to that time.
"Issuer Free Writing Prospectus" means any "issuer free writing
prospectus" (as defined in clause (h)(i) of Rule 433 of the 1933 Act Regulations
("Rule 433")) relating to the Securities that (i) is required to be filed with
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the Commission by the Company and/or the Trust, (ii) is a "road show that is a
written communication" within the meaning of Rule 433(d)(8)(i), whether or not
required to be filed with the Commission or (iii) is exempt from filing pursuant
to Rule 433(d)(5)(i) because it contains a description of the Securities or of
the offering that does not reflect the final terms, in each case in the form
filed or required to be filed with the Commission or, if not required to be
filed, in the form retained in the records of the Company and/or the Trust
pursuant to Rule 433(g); it being understood that all Issuer Free Writing
Prospectuses are identified on Schedule II hereto.
Each Issuer Free Writing Prospectus, as of its issue date and at all
subsequent times through the completion of the offer and sale of the Securities
or until any earlier date that the Company and the Trust notified or notifies
the Representative in writing, did not, does not and will not include any
information that conflicted, conflicts or will conflict with the information
contained in the Registration Statement or the Prospectus, including any
document incorporated therein by reference and any preliminary or other
prospectus deemed to be a part thereof that has not been superseded or modified.
The representations and warranties in this subsection shall not apply
to statements in or omissions from the Registration Statement or the Prospectus
made in reliance upon and in conformity with any Underwriter's Information (as
defined in Section 6(a)(3) below).
(3) Incorporated Documents. The documents incorporated or deemed to be
incorporated by reference in the preliminary prospectus or the Prospectus, when
read together with the other information in the preliminary prospectus or the
Prospectus, at the time the Original Registration Statement became effective,
did not, and at the earlier of the time the Prospectus was first used and the
first "time of sale," within the meaning of Rule 159 under the 1933 Act
Regulations, of Securities in this offering and at the Closing Time will not,
include an untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. The documents
incorporated or deemed to be incorporated by reference in the Prospectus, when
filed with the Commission, conformed or will conform, as the case may be, in all
material respects to the requirements of the 1934 Act and the rules and
regulations of the Commission thereunder (the "1934 Act Regulations").
(4) Independent Accountants. The accountants who certified the
financial statements and supporting schedules included in the Prospectus are
independent public accountants within the meaning of the 1933 Act and the 1933
Act Regulations.
(5) Financial Statements. The consolidated historical financial
statements, together with the related schedules and notes, included in the
preliminary prospectus, the Prospectus, the Disclosure Package or the
Registration Statement present fairly, in all material respects, the financial
position of the Company and its consolidated subsidiaries at the dates
indicated, and the statements of income, changes in equity and cash flows of the
Company and its consolidated subsidiaries for the periods specified. Said
financial statements have been prepared in conformity with generally accepted
accounting principles ("GAAP") in the United States applied on a consistent
basis throughout the periods involved. The supporting schedules, if any,
included therein present fairly, in all material respects, the information
required to be stated therein. The summary financial data included therein
5
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 Prospectus.
(6) No Material Adverse Change in Business. Since the respective dates
as of which information is given in the Prospectus, the Disclosure Package or
the Registration Statement, except as otherwise stated therein, there has not
been (A) any material adverse change or any development which could reasonably
be expected to have a 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 (a "Material Adverse Effect"),
(B) any transaction entered into by the Trust or the Company or any of its
subsidiaries, other than in the 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 any class of its capital stock (except for regular quarterly
dividends declared by the Company and paid to holders of its Common Stock on
January 15, 2006 and regular quarterly dividends declared by the Company on
January 17, 2006 to be paid to holders of its common stock on April 15, 2006).
(7) Regulatory Enforcement Matters. Neither the Company nor any of its
subsidiaries is subject or is party to, or has received any written notice that
any of them may or will become subject or party to any investigation with
respect to, any cease-and-desist order, agreement, consent agreement, memorandum
of understanding or other regulatory enforcement action, proceeding or order
with or by, or is a party to any commitment letter or similar undertaking to, or
is subject to any directive by, or has been a recipient of any supervisory
letter from, or has adopted any board resolutions at the request of, any
Regulatory Agency (as defined below) that in any material respect (considered on
a consolidated basis) currently relates to or restricts the conduct of their
business or that in any manner relates to their capital adequacy, their credit
policies, or their management (each, a "Regulatory Agreement"), nor has the
Company or any of its subsidiaries been advised in writing by any Regulatory
Agency that it is considering issuing or requesting any such Regulatory
Agreement. There is no unresolved violation, criticism or exception by any
Regulatory Agency with respect to any report or statement relating to any
examination of the Company or any of its subsidiaries which, in the reasonable
judgment of the Company, is expected to result in a Material Adverse Effect. As
used herein, the term "Regulatory Agency" means any federal or state agency
charged with the supervision or regulation of depository institutions, or
holding companies of depository institutions, or engaged in the insurance of
depository institution deposits, or any court, administrative agency or
commission or other governmental agency, authority or instrumentality having
supervisory or regulatory authority with respect to the Company or any of its
subsidiaries.
(8) Good Standing of the Company. The Company has been duly organized
and is validly existing as a corporation in good standing under the laws of the
Commonwealth of Pennsylvania and has corporate power and authority to own, lease
and operate its properties and to conduct its business as described in the
Registration Statement, the Prospectus and the Disclosure Package, to enter into
and perform its obligations under each of the Operative Documents to which it is
a party, and to issue the Debt Securities and execute the Guarantee, and is duly
qualified as a foreign corporation to transact business and is in good standing
in the State of New Jersey, and there is no other jurisdiction in which such
6
qualification is required, whether by reason of the ownership or leasing of
property or the conduct of business, except where the failure to so qualify or
be in good standing would not result in a Material Adverse Effect.
(9) Financial Holding Company. The Company is a "financial holding
company" as such term is defined by the Gramm-Leach-Bliley Act (the "GLBA").
(10) Good Standing of Subsidiaries. The only "significant
subsidiaries" of the Company (as defined in Rule 1-02 of Regulation S-X) (the
"Subsidiaries") are Fulton Bank, Lafayette Ambassador Bank, Resource Bank, The
Bank and FFC Management, Inc. Each of the Subsidiaries has been duly organized
and is validly existing as a corporation, bank, trust or association, as the
case may be, in good standing under the laws of its jurisdiction of
incorporation, organization, formation or association, as the case may be, and
has corporate power and authority to own, lease and operate its properties and
to conduct its business as described in the Registration Statement, the
Prospectus and the Disclosure Package. No Subsidiary is required to be duly
qualified or be in good standing as a foreign entity to transact business in any
jurisdiction, where the failure to so qualify or be in good standing would
result in a Material Adverse Effect. Each depository institution subsidiary of
the Company (collectively, the "Bank Subsidiaries") is a member in good standing
of its applicable Federal Home Loan Bank, the deposit accounts of each such Bank
Subsidiary are insured up to the applicable limit by the Federal Deposit
Insurance Corporation (the "FDIC") and no proceedings for the revocation or
termination of such insurance is pending or, to the knowledge of the Company,
threatened.
(11) Capital Stock Duly Authorized and Validly Issued. All of the
issued and outstanding shares of capital stock of the Company have been duly
authorized and validly issued and are fully paid and nonassessable. All of the
issued and outstanding shares of capital stock of each of the Subsidiaries have
been duly authorized and validly issued, are fully paid and nonassessable and
are owned by the Company, directly or through one or more other Subsidiaries,
free and clear of any security interest, mortgage, pledge, lien, encumbrance,
claim or equitable right. None of the issued and outstanding shares of capital
stock of the Company or any Subsidiary were issued in violation of any
preemptive or similar rights of any shareholder of the Company or such
Subsidiary, as the case may be, arising by operation of law, or under the
certificate of incorporation, by-laws or other organizational documents of the
Company or such Subsidiary or under any agreement to which the Company or such
Subsidiary is a party.
(12) Capitalization. The authorized, issued and outstanding capital
stock and consolidated long term debt (i.e., a maturity greater than one year)
of the Company as of September 30, 2005 is as set forth in the Prospectus under
"Capitalization". There have not been any subsequent issuances of capital stock
of the Company since such date (except issuances of common stock pursuant to
exercises of employee stock options and pursuant to the Company's dividend
reinvestment plan and employee stock purchase plan). There has not been any
additional long term borrowings by the Company or its consolidated subsidiaries
since such date, except, with respect to the Bank Subsidiaries, pursuant to
Federal Home Loan Bank advances or securities sold under agreements to
repurchase by the Bank Subsidiaries in their ordinary course of business or,
with respect to the Company, pursuant to the $50,000,000 Revolving Credit
Agreement, dated July 12, 2004, as amended, with SunTrust Bank, as lender.
7
(13) Good Standing of the Trust. The Trust has been duly created and
is validly existing in good standing as a statutory trust under the Delaware Act
with the power and authority to own property and to conduct its business as
described in the Registration Statement, the Prospectus and the Disclosure
Package, to enter into and perform its obligations under each of the Operative
Documents to which it is a party and to issue the Capital Securities and the
Common Securities. The Trust is not a party to or otherwise bound by any
agreement other than the Operative Documents to which it is a party and those
described in the Registration Statement, the Prospectus and the Disclosure
Package. The Trust is, and will be, under current law, classified for U.S.
federal income tax purposes as a grantor trust and not as an association taxable
as a corporation.
(14) Authorization of Common Securities. At the Closing Time, the
Common Securities will have been duly authorized for issuance by the Trust
pursuant to the Amended Declaration and, when duly issued and executed in
accordance with the Amended Declaration and delivered by the Trust to the
Company against payment therefor in accordance with the subscription agreement
therefor, will be validly issued and fully paid and nonassessable undivided
common beneficial ownership interests in the assets of the Trust. The issuance
of the Common Securities is not subject to preemptive or other similar rights.
At the Closing Time, all of the issued and outstanding Common Securities will be
owned directly by the Company, free and clear of any security interest,
mortgage, pledge, lien, encumbrance, claim or equitable right.
(15) Authorization of Capital Securities. At the Closing Time, the
Capital Securities will have been duly authorized for issuance by the Trust
pursuant to the Amended Declaration, and when duly issued, executed and
authenticated in accordance with the Amended Declaration and delivered by the
Trust against payment therefor as provided herein, will be validly issued and
fully paid and nonassessable undivided preferred beneficial ownership interests
in the assets of the Trust. The issuance of the Capital Securities will not be
subject to preemptive or other similar rights. The Capital Securities will be in
the form contemplated by, and will be entitled to the benefits of, the Amended
Declaration and the Guarantee.
(16) Authorization of Agreement. This Agreement has been duly
authorized, executed and delivered by each of the Offerors.
(17) Authorization of Amended Declaration. The Amended Declaration has
been duly authorized by the Company and, at the Closing Time, will have been
duly executed and delivered by the Company and the Administrators, and assuming
due authorization, execution and delivery of the Amended Declaration by the
Institutional Trustee and the Delaware Trustee, the Amended Declaration will be,
at the Closing Time, a valid, legal and binding agreement of the Company,
enforceable against the Company in accordance with its terms, except to the
extent that enforceability may be limited by (a) bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance or other similar laws now or
hereafter in effect relating to creditors' rights generally and (b) general
principles of equity (regardless of whether enforceability is considered in a
proceeding at law or in equity) (collectively, the "Enforceability Exceptions").
(18) Authorization of Guarantee. The Guarantee has been duly
authorized by the Company and, at the Closing Time, will have been duly executed
and delivered by the Company and, assuming due authorization, execution and
8
delivery of the Guarantee by the Guarantee Trustee, will constitute a valid,
legal and binding agreement of the Company, enforceable against the Company in
accordance with its terms, except to the extent that enforceability may be
limited by the Enforceability Exceptions.
(19) Authorization of Indenture. The Indenture has been duly
authorized by the Company and, at the Closing Time, will have been duly executed
and delivered by the Company and, assuming the authorization, execution and
delivery of the Indenture by the Indenture Trustee, the Indenture will
constitute a valid, legal and binding agreement of the Company, enforceable
against the Company in accordance with its terms, except to the extent that
enforceability may be limited by the Enforceability Exceptions.
(20) Authorization of Debt Securities. The Debt Securities have been
duly authorized by the Company and, at the Closing Time, will have been duly
executed by the Company and, when authenticated in the manner provided for in
the Indenture and delivered by the Company to the Trust against payment therefor
as described in the Prospectus or as contemplated in the Indenture, will
constitute valid, legal and binding obligations of the Company, enforceable
against the Company in accordance with their terms, except to the extent that
enforceability may be limited by the Enforceability Exceptions; the Debt
Securities will be in the form contemplated by, and will be entitled to the
benefits of, the Indenture. The Company has no present intention to exercise its
option to defer payments of interest on the Debt Securities as permitted by the
Indenture.
(21) Authorization of Administrators. Each of the Administrators of
the Trust is an officer or employee of the Company and has been duly authorized
by the Company to execute and deliver the Amended Declaration.
(22) Qualification under 1939 Act. Each of the Amended Declaration,
the Guarantee and the Indenture has been duly qualified under the 1939 Act.
(23) Not an Investment Company. Neither the Trust nor the Company is,
and immediately following consummation of the transactions contemplated hereby
and the application of the net proceeds as described in the Registration
Statement, the Prospectus and the Disclosure Package, neither the Trust nor the
Company will be, an "investment company" or an entity controlled by an
"investment company," in each case within the meaning of Section 3(a) of the
Investment Company Act of 1940, as amended (the "1940 Act"), without regard to
Section 3(c) of the 1940 Act.
(24) Descriptions of Securities and Operative Documents. Each of the
Securities and the Operative Documents will conform, in all material respects,
to all statements relating thereto contained in the Registration Statement, the
Prospectus and the Disclosure Package.
(25) Absence of Defaults and Conflicts. The Trust is not in violation
of the trust certificate of the Trust filed with the State of Delaware (the
"Trust Certificate") or the Amended Declaration. Neither the Company nor any of
its subsidiaries is (i) in violation of its charter, bylaws or other
organizational document, (ii) in default in the performance or observance of any
obligation, agreement, covenant or condition contained in any contract,
9
indenture, mortgage, deed of trust, loan or credit agreement, note, lease or
other agreement or instrument to which it is a party or by which it or any of
them may be bound or to which any of its assets is subject (collectively,
"Agreements and Instruments") or (iii) in violation of any applicable law,
statute, rule, regulation, judgment, order, writ or decree (including, without
limitation, the Equal Opportunity Credit Act ("the EOCA"), the Fair Housing Act
("the FHA"), the Community Reinvestment Act ("the CRA"), the Home Mortgage
Disclosure Act ("HMDA"), the GLBA, the BHCA, the Bank Secrecy Act (the "BSA"),
the Federal Reserve Act (the "FRA") and the USA Patriot Act (the "Patriot Act",
and together with the EOCA, the FHA, the CRA, the HMDA, the GLBA, the BHCA, the
BSA, the FRA and the regulations promulgated under any of the foregoing, the
"Banking Regulations")) of any state or federal government, governmental
authority, agency or instrumentality or court, domestic or foreign (including,
without limitation, the Federal Reserve Board (the "FRB"), the Office of the
Comptroller of the Currency (the "OCC"), the Department of Treasury (the
"Treasury"), the FDIC and any other Regulatory Agency (collectively, the
"Banking Regulators")), except for any such default or violation that would not,
individually or in the aggregate, have a Material Adverse Effect. The execution,
delivery and performance of the Operative Documents by the Trust or the Company,
as the case may be, the issuance, sale and delivery of the Capital Securities,
the Debt Securities, the Guarantee, the consummation of the transactions
contemplated by the Operative Documents, and compliance by the Company and the
Trust 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, at the Closing Time, will have been duly authorized by all
necessary action on the part of the Trust, and do not and will not, whether with
or without the giving of notice or passage of time or both, (i) violate,
conflict with or constitute a breach of, or default or Repayment Event (as
defined below) under, or result in the creation or imposition of any, security
interest, mortgage, pledge, lien, charge, encumbrance, claim or equitable right
upon any assets of the Trust, the Company or any of the Subsidiaries pursuant
to, any of the Agreements and Instruments, (ii) result in any violation of any
provision of the charter, bylaws or other organizational document of the Company
or any of the Subsidiaries or the Amended Declaration or the Trust Certificate
or (iii) result in any violation by the Company or any of the Subsidiaries of
any applicable law, statute, rule, regulation, judgment, order, writ or decree
(including, without limitation, the Banking Regulations) of any state or federal
government, governmental authority, agency or instrumentality or court, domestic
or foreign (including, without limitation, the Banking Regulators). 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 the Subsidiaries.
(26) Absence of Labor Dispute. No labor dispute with the employees of
the Company or any of the Subsidiaries exists or, to the knowledge of the senior
management of the Company, is contemplated or threatened, which would reasonably
be expected to have a Material Adverse Effect.
(27) Absence of Proceedings. Except as described in the Registration
Statement, the Prospectus and the Disclosure Package, there is no action, suit,
proceeding, inquiry or investigation before or brought by any court, government,
governmental authority, agency or instrumentality, domestic or foreign
(including, without limitation, the Banking Regulators), now pending, or, to the
knowledge of the Trust or the Company, threatened against or affecting the
10
Trust or the Company or any of its subsidiaries, which (i) is required to be
disclosed in the Registration Statement or the Prospectus; (ii) would reasonably
be expected to have a Material Adverse Effect or (iii) would reasonably be
expected to materially and adversely affect the consummation of the transactions
contemplated by this Agreement and the other Operative Documents or the
performance by the Trust or the Company of their respective obligations
hereunder or thereunder. Except as described in the Registration Statement, the
Prospectus and the Disclosure Package, there are no 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 assets is the subject, including
ordinary routine litigation incidental to the business, which would, in the
aggregate, reasonably be expected to have a Material Adverse Effect.
(28) Absence of Further Requirements. No filing with, or
authorization, approval, consent, license, order, registration, qualification or
decree of, any government, governmental authority, agency or instrumentality or
court, domestic or foreign (including, without limitation, the Banking
Regulators), other than those that have been made or obtained, is necessary or
required for the authority, execution, delivery or performance by the Trust or
the Company of their respective obligations under the Operative Documents, the
Capital Securities, the Debt Securities or the Guarantee, or the consummation by
the Trust and the Company of the transactions contemplated thereunder, except as
may be required under state securities laws.
(29) Possession of Licenses and Permits. Each of the Trust, the
Company and the Company's subsidiaries possesses such permits, licenses,
approvals, consents and other authorizations (collectively, "Governmental
Licenses") issued by the appropriate federal, state, local or foreign
governmental or regulatory authorities (including, without limitation, the
Banking Regulators) that are necessary to conduct their respective businesses
and as described in the Registration Statement, the Prospectus and the
Disclosure Package, and have made all declarations and filings with the
appropriate federal, state, local or foreign governmental or regulatory
authorities (including, without limitation, the Banking Regulators) that are
necessary for the conduct of their respective businesses as described in the
Registration Statement, the Prospectus and the Disclosure Package, except where
the failure to possess such Governmental Licenses or make such declarations or
filings would not, individually or in the aggregate, have a Material Adverse
Effect. Each of the Trust, the Company and the Company's subsidiaries are in
compliance with the terms and conditions of all such Governmental Licenses,
except where the failure so to comply would not, individually or in the
aggregate, have a Material Adverse Effect. All of the Governmental Licenses are
valid and in full force and effect, except when the invalidity of such
Governmental Licenses or the failure of such Governmental Licenses to be in full
force and effect would not have a Material Adverse Effect. None of the Trust,
the Company or any of the Company's subsidiaries has received any notice of
proceedings relating to the revocation or modification of any such Governmental
Licenses which, individually or in the aggregate, in the reasonable judgment of
the Company, is reasonably expected to have a Material Adverse Effect.
(30) Conduct of Business. Each of the Trust, the Company and the
Subsidiaries is conducting its business in compliance in all material respects
with all laws, rules, regulations, decisions, directives and orders (including,
without limitation, the Banking Regulations), and all regulations and orders of,
or agreements with, federal, state, local or foreign governmental or regulatory
authorities (including, without limitation, the Banking Regulators) applicable
to it, except where failure to so comply would not individually or in the
11
aggregate, in the reasonable judgment of the Company or the Trust as the case
may be, be reasonably expected to have a Material Adverse Effect.
(31) Environmental Matters. Each of the Trust, the Company and the
Company's subsidiaries are in compliance with all applicable federal, state, and
local laws, rules and regulations, and decisions and orders relating to the
protection of human health and safety, the environment or hazardous or toxic
substances or wastes, pollutants or contaminants, including, without limitation,
those applicable to emissions to the environment, waste management, and waste
disposal (collectively, the "Environmental Laws"), except where such
noncompliance would not, individually or in the aggregate, have a Material
Adverse Effect, and, to the knowledge of the Company, there are no circumstances
that would prevent, interfere with or materially increase the cost of such
compliance in the future. There is no claim under any Environmental Law,
including common law, pending or, to the knowledge of the Company, threatened
against the Company or any of its subsidiaries (an "Environmental Claim"), which
would have a Material Adverse Effect, and, to the knowledge of the Company,
under applicable law, there are no past or present actions, activities,
circumstances, events or incidents, including without limitation, releases of
any material into the environment, that are reasonably likely to form the basis
of any Environmental Claim against the Company or any of its Subsidiaries which
would have a Material Adverse Effect.
(32) Title to Property. Each of the Trust, the Company and the
Company's subsidiaries has good and marketable title in fee simple to all of its
real and personal properties, reflected as owned in the consolidated financial
statements or as described in the Prospectus, in each case free and clear of all
liens, encumbrances, claims and defects, except as do not materially interfere
with the use made and proposed to be made of such property by the Trust, the
Company or such subsidiary or which would not, individually or in the aggregate,
have a Material Adverse Effect. All of the leases and subleases under which the
Trust, the Company or any of the Company's subsidiaries holds properties used in
its business are in full force and effect, except where the failure of such
leases and subleases to be in full force and effect and would not, individually
or in the aggregate, have a Material Adverse Effect. None of the Trust, the
Company or any of the Company's subsidiaries 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 of the Company's subsidiaries under any of the leases or
subleases mentioned above, 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 any claim that would not, individually or in the
aggregate, have a Material Adverse Effect.
(33) Intellectual Property. Each of the Trust, the Company and the
Company's subsidiaries owns or possesses all necessary and adequate patents,
patent rights, licenses, inventions, copyrights, know-how (including trade
secrets and other unpatented and/or unpatentable proprietary or confidential
information, systems or procedures), trademarks, service marks, trade names or
other intellectual property (collectively, "Intellectual Property") presently
employed by it in connection with the business now operated by it or reasonably
necessary in order to conduct such business, and none of the Trust, the Company
or any of the Company's subsidiaries has received any notice or is otherwise
aware of any infringement of or conflict with asserted rights of others with
respect to any Intellectual Property or any facts or circumstances which would
render any Intellectual Property invalid or inadequate to protect the interest
12
of the Trust, the Company or any of the Company's subsidiaries therein, except
where the failure to possess such Intellectual Property or where such
infringement or conflict (if the subject of any unfavorable decision, ruling or
finding) or invalidity or inadequacy, individually or in the aggregate, would
not have a Material Adverse Effect.
(34) Taxes. The Company and the Subsidiaries have paid all federal,
state, local and foreign taxes and filed all tax returns required to be paid or
filed through the date hereof, except to the extent any such taxes are being
contested in good faith. Giving effect to any applicable extensions and except
as otherwise disclosed in the Registration Statement, the Prospectus and the
Disclosure Package, there is no tax deficiency that has been, or could
reasonably be expected to be, asserted against the Company or any of the
Subsidiaries or any of their respective assets.
(35) Insurance. The Company and the Subsidiaries have insurance
covering their respective assets, operations, personnel and businesses,
including business interruption insurance, which insurance is in amounts and
insures against such losses and risks as are adequate to protect the Company and
the Subsidiaries and their respective assets, operations, personnel and
businesses; and neither the Company nor any of the Subsidiaries has (i) received
notice from any insurer or agent of such insurer that capital improvements or
other expenditures are required or necessary to be made in order to continue
such insurance or (ii) any reason to believe that it will not be able to renew
its existing insurance coverage as and when such coverage expires or to obtain
similar coverage at reasonable cost from similar insurers as may be necessary to
continue its business.
(36) Payment of Dividends. No subsidiary of the Company is currently
prohibited, directly or indirectly, from paying any dividends to the Company,
from making any other distribution on such subsidiary's capital stock or from
repaying to the Company any loans or advances to such subsidiary from the
Company, except as described in the Registration Statement, the Prospectus and
the Disclosure Package.
(37) Sarbanes-Oxley Act. The Company is in substantial compliance with
the applicable provisions of the Sarbanes-Oxley Act of 2002.
(38) Accounting Controls. The Company and its subsidiaries maintain
systems of internal accounting controls sufficient to provide reasonable
assurance that: (i) transactions are executed in accordance with management's
general or specific authorizations; (ii) transactions are recorded as necessary
to permit preparation of financial statements in conformity with generally
accepted accounting principles and to maintain asset accountability; (iii)
access to assets is permitted only in accordance with management's general or
specific authorization; and (iv) the recorded accountability for assets is
compared with the existing assets at reasonable intervals and appropriate action
is taken with respect to any differences. Except as described in the
Registration Statement, the Prospectus and the Disclosure Package, since the end
of the period for which the Company has filed with the Commission its most
recent Form 10-Q under the 1934 Act, there has been (I) no material weakness in
the Company's internal control over financial reporting (whether or not
remediated) and (II) no change in the Company's internal control over financial
reporting that has materially affected, or is reasonably likely to materially
affect, the Company's internal control over financial reporting. The Company has
13
established and maintains disclosure controls and procedures (as such term is
defined in Rules 13a-15(e) and 15d-15(e) of the 1934 Act Regulations) and such
disclosure controls and procedures are effective to perform the functions for
which they were established. Since the end of the period for which the Company
has filed with the Commission its most recent Form 10-Q under the 1934 Act,
there have been no significant changes in internal controls or in other factors
that could significantly affect internal controls, including any corrective
actions with regard to significant deficiencies and material weaknesses.
(39) Stabilization. Neither the Company nor any of its subsidiaries
has taken, 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.
(40) Pending Proceedings and Examinations. The Registration Statement
is not the subject of a pending proceeding or examination under Section 8(d) or
8(e) of the 1933 Act, and neither the Company nor the Trust is the subject of a
pending proceeding under Section 8A of the 1933 Act in connection with the
offering of the Securities.
(41) Registration Rights. Except pursuant to the Agreement and Plan of
Merger by and between Columbia Bancorp and the Company, dated as of July 26,
2005, there are no persons with registration rights or other similar rights to
have any securities of the Company or its subsidiaries registered by the Company
or any other person under the 1933 Act.
(42) Statistical and Market Data. Nothing has come to the attention of
the Company that has caused the Company to believe that the statistical and
market-related data included in the Registration Statement, the Prospectus or
the Disclosure Package is not based on or derived from sources that are reliable
or is not accurate in all material respects.
FFC represents and warrants to each Underwriter as of the date hereof,
as of the Applicable Time and as of the Closing Time, and agrees with each
Underwriter, as follows:
(1) Good Standing of FFC. FFC has been duly organized and is validly
existing as a corporation in good standing under the laws of the State of
Delaware and has power, corporate and other, and authority to own, lease
and operate its properties and to conduct its business as described in the
Registration Statement, the Prospectus and the Disclosure Package and to
enter into and perform its obligations under this Agreement, and is duly
qualified as a foreign corporation to transact business and is in good
standing in each jurisdiction in which such qualification is required,
whether by reason of the ownership or leasing of property or the conduct of
business, except where the failure to so qualify or be in good standing
would not result in a Material Adverse Effect.
(2) Due Authorization. FFC has full right, power and authority to
execute and deliver this Agreement and to perform its obligations
hereunder. All action required to be taken for the due authorization,
execution, delivery and performance of this Agreement, the consummation of
the transactions contemplated hereby and the performance by FFC of its
obligations hereunder has been duly and validly taken.
(3) Capital Stock Duly Authorized and Validly Issued. All of the
issued and outstanding shares of capital stock of FFC have been duly
14
authorized and validly issued, are fully paid and nonassessable and are
owned by the Company, directly or through one or more other Subsidiaries,
free and clear of any security interest, mortgage, pledge, lien,
encumbrance, claim or equitable right. None of the issued and outstanding
shares of capital stock of FFC were issued in violation of any preemptive
or similar rights of any shareholder of FFC arising by operation of law, or
under the certificate of incorporation or by-laws of FFC or under any
agreement to which FFC is a party.
(4) Authorization of Agreement. This Agreement has been duly
authorized, executed and delivered by FFC.
Any certificate signed by any Administrator of the Trust or any duly
authorized officer of the Company or any of its subsidiaries (including FFC) and
delivered to the Representative or to counsel for the Underwriters shall be
deemed a representation and warranty by the Trust, the Company or the applicable
subsidiary, as the case may be, to the Representative as to the matters covered
thereby.
SECTION 2. Sale and Delivery to Underwriters; Closing.
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 Underwriter, severally and not jointly, and each Underwriter,
severally and not jointly, agrees to purchase from the Trust, at a price of
$1,000 per Capital Security, 150,000 Capital Securities.
Deliveries of a certificate or certificates for the Capital Securities
shall be made at the offices of Thacher Proffitt & Wood LLP in The City of New
York, New York, or such other place as may be agreed to by the Representative
and the Offerors, and payment of the purchase price for the Capital Securities
shall be made by the Representative to the Trust by wire transfer of immediately
available funds contemporaneous with closing at such place as shall be agreed
upon by the Representative and the Offerors, no later than 10:00 a.m., New York
City time, on January 26, 2006 or such other time not later than ten (10)
business days after such date as shall be agreed upon by the Representative and
the Offerors (such time and date of payment and delivery being herein called the
"Closing Time").
It is understood that each Underwriter has authorized the
Representative, for its account, to accept delivery of, receipt for, and make
payment of the purchase price for, the Capital Securities which it has agreed to
purchase. Sandler O'Neill, individually and not as Representative of the
Underwriters, may (but shall not be obligated to) make payment of the purchase
price for the Capital Securities to be purchased by any Underwriter whose funds
have not been received by the Closing Time, but such payment shall not relieve
such Underwriter from its obligations hereunder.
Payment for the Capital Securities purchased by the Underwriters shall
be made to the Trust by wire transfer of immediately available funds to a bank
designated by the Company, against delivery to the Representative for the
respective accounts of the Underwriters of certificates for the Capital
Securities to be purchased by them. Certificates for the Capital Securities
shall be in such denominations and registered in such names as the
Representative may request in writing at least two business days prior to the
15
Closing Time. All certificates for the Capital Securities shall be made
available for examination and packaging, if applicable, by the Representative in
The City of New York on the business day prior to the Closing Time.
As compensation to the Underwriters for their respective commitments
hereunder and in view of the fact that the proceeds of the sale of the Capital
Securities will be used to purchase the Debt Securities of the Company, the
Company hereby agrees to pay at the Closing Time to the Underwriters in
immediately available funds a commission of $10.00 per Capital Security to be
delivered by the Trust hereunder at the Closing Time.
In performing its duties under this Agreement, the Underwriters shall
be entitled to rely upon any notice, signature or writing that the Underwriters
shall in good faith believe to be genuine and to be signed or presented by a
proper party or parties. The Underwriters may rely upon any opinions or
certificates or other documents delivered by the Offerors or their counsel or
designees to them.
SECTION 3. Covenants of the Offerors. The Offerors covenant, jointly
and severally, with the Underwriters as follows:
(a) Compliance with Securities Regulations and Commission Requests.
Prior to the completion of the distribution of the Securities as contemplated in
this Agreement (which the Representative will promptly confirm orally to the
Company), the Offerors will notify the Representative promptly, and confirm the
notice in writing, (i) when any post-effective amendment to the Registration
Statement or a new registration statement relating to the Securities shall
become effective, or any amendment or supplement to the Prospectus or any
amended Prospectus shall have been filed, (ii) of the receipt of any comments
with respect to the Registration Statement from the Commission, (iii) of any
request by the Commission for any amendment to the Registration Statement or the
filing of a new registration statement or any amendment or supplement to the
Prospectus or any document incorporated therein by reference or otherwise deemed
to be a part thereof or for additional information, (iv) of the issuance by the
Commission of any stop order suspending the effectiveness of the Registration
Statement or such new registration statement or of any order preventing or
suspending the use of any preliminary prospectus or the Prospectus, or of the
suspension of the qualification of the Securities for offering or sale in any
jurisdiction, or of the initiation or threatening of any proceedings for any of
such purposes or of any examination pursuant to Section 8(e) of the 1933 Act
concerning the Registration Statement and (v) if the Company or the Trust become
the subject of a proceeding under Section 8A of the 1933 Act. With respect to
the Securities, subject to Section 3(e), the Offerors will comply with the
requirements of Rule 430B, will prepare the Prospectus in the form approved by
the Representative, will effect the filings required under Rule 424(b) in the
manner and within the time period specified therein (without reliance on Rule
424(b)(8)) and will take such steps as they deem necessary to ascertain promptly
whether the Prospectus transmitted for filing under Rule 424(b) under the 1933
Act Regulations was received for filing by the Commission and, in the event that
it was not, it will promptly file such Prospectus. The Offerors will use their
commercially reasonable efforts to prevent the issuance of any stop order or
other order and, if any stop order or other order is issued, to obtain the
lifting thereof as soon as possible. The Company shall pay the required filing
fees of the Commission relating to the Securities within the time required by
16
Rule 456(b)(1) (i) of the 1933 Act Regulations without regard to the proviso
therein and otherwise in accordance with Rules 456(b) and 457(r) of the 1933 Act
Regulations.
(b) Delivery of Registration Statements. The Offerors have furnished
to each Underwriter and counsel for the Underwriters, without charge, signed or
conformed copies of the Original Registration Statement and of each amendment
thereto (including exhibits filed therewith or incorporated by reference therein
and documents incorporated or deemed to be incorporated by reference therein or
otherwise deemed to be a part thereof) and signed or conformed copies of all
consents and certificates of experts. The copies of the Original Registration
Statement and each amendment thereto furnished to the Representative will be
identical to the electronically transmitted copies thereof filed with the
Commission pursuant to EDGAR, except to the extent permitted by Regulation S-T.
(c) Delivery of Prospectuses. The Offerors have delivered to each
Underwriter, without charge, as many copies of each preliminary prospectus as
such Underwriter reasonably requested, and each of the Offerors hereby consents
to the use of such copies for purposes permitted by the 1933 Act. The Offerors
will furnish to each Underwriter, without charge, during the period when a
prospectus is required to be delivered under the 1933 Act, such number of copies
of the Prospectus (as amended or supplemented) as such Underwriter may
reasonably request. The Prospectus and any amendments or supplements thereto
furnished to the Underwriters will be identical to the electronically
transmitted copies thereof filed with the Commission pursuant to EDGAR, except
to the extent permitted by Regulation S-T.
(d) Notice and Effect of Material Events. Each of the Offerors will
comply with the 1933 Act, the 1933 Act Regulations, the 1934 Act, the 1934 Act
Regulations, the 1939 Act and the 1939 Act Regulations, as applicable, so as to
permit the completion of the distribution of the Securities as contemplated in
this Agreement and in the Prospectus. Prior to the completion of the
distribution of the Securities by the Underwriters, the Offerors will
immediately notify the Representative, and confirm such notice in writing, of
(x) any filing made by the Offerors of information relating to the offering of
the Securities with any securities exchange or any other regulatory body in the
United States, and (y) any event or condition that results or is reasonably
likely to result in a Material Adverse Effect, which (i) makes any statement in
the Prospectus false or misleading or (ii) which is not disclosed in the
Prospectus. If, at any time when a prospectus is required by the 1933 Act to be
delivered in connection with sales of the Securities, any event shall occur as a
result of which it is necessary, in the reasonable opinion of the Offerors,
their counsel, the Representative or counsel to the Underwriters, to amend or
supplement the Prospectus in order that the Prospectus not include any untrue
statement 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 purchasers, or if for any other reason
it shall be necessary, in the reasonable opinion of the Offerors, their counsel,
the Representative or counsel to the Underwriters, during such period to amend
the Registration Statement or to file a new registration statement or to amend
or supplement the Prospectus to comply with the 1933 Act or the 1933 Act
Regulations, the Offerors will forthwith amend the Registration Statement, file
such registration statement and/or amend or supplement the Prospectus, subject
to Section 3(e), so as to correct such untrue statement or omission or effect
such compliance. If at any time following the Applicable Time or at any time
following the issuance of an Issuer Free Writing Prospectus any event shall
17
occur or condition shall exist as a result of which the Disclosure Package or
such Issuer Free Writing Prospectus, individually or together with other
information that is part of the Disclosure Package, as the case may be,
conflicted or would conflict with the information contained in the Registration
Statement or any other registration statement relating to the Securities or
included or would include an untrue statement of a material fact or omitted or
would omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances prevailing at that subsequent time,
not misleading, the Offerors will promptly notify the Representative and will
promptly amend or supplement, at the Company's own expense, the Disclosure
Package or such Issuer Free Writing Prospectus, as the case may be, to eliminate
or correct such conflict, untrue statement or omission.
(e) Amendment to Prospectus or Registration Statement. The Offerors
will advise the Representative promptly of any notice of its intention to file
or prepare any amendment to the Registration Statement or a new registration
statement relating to the Securities or any amendment or supplement to any
preliminary prospectus or the Prospectus and will furnish the Representative
with copies thereof a reasonable amount of time prior to such proposed filing or
use, as the case may be, and will not file or use any such document with respect
to the Securities without the consent of the Representative, which consent shall
not be unreasonably withheld. Neither the consent of the Representative, nor the
Representative's delivery of any such amendment or supplement, shall constitute
a waiver of any of the conditions set forth in Section 5 hereof. For purposes of
clarity, nothing in this Section 3(e) shall restrict the Company from making any
filings required in order to comply with its reporting obligations under the
1934 Act or the 1934 Act Regulations.
(f) No Stabilization. The Offerors will not take, directly or
indirectly, any action designed to, or that could reasonably be expected to,
cause or result in any stabilization or manipulation of the price of the Capital
Securities.
(g) DTC. The Offerors will cooperate with the Underwriters and use
their commercially reasonable efforts to permit the Capital Securities to be
eligible for clearance, settlement and trading through the facilities of DTC.
(h) Blue Sky Compliance. The Offerors will qualify the Securities for
offer and sale under the state securities, or blue sky, laws of such
jurisdictions as the Representative shall reasonably request and will continue
such qualifications in effect so long as required for the offering and resale of
the Securities; provided that the Offerors shall not be required to (i) qualify
as a foreign corporation or other entity or as a dealer in securities in any
such jurisdiction where they would not otherwise be required to so qualify, (ii)
file any general consent to service of process in any such jurisdiction or (iii)
subject themselves to taxation in any such jurisdiction if they are not
otherwise so subject.
(i) Further Obligations. In the event the Offerors, at any time, or
from time to time, shall not have sufficient funds to promptly pay in full any
amount then due and payable to any person pursuant to this Agreement, the
Offerors shall promptly take all such actions that do not require prior
regulatory approval to obtain sufficient funds to pay such amount and, if the
funds obtained from such actions shall not be sufficient to pay such amount in
18
full, the Offerors shall promptly take all such further actions, including
obtaining all required regulatory approvals, to obtain sufficient additional
funds necessary to pay such amount in full.
(j) Earnings Statement. The Offerors shall timely file such reports
pursuant to the 1934 Act, as applicable, as are necessary in order to make
generally available to their respective securityholders as soon as practicable
an earnings statement for the purposes of, and to provide the benefits
contemplated by, the last paragraph of Section 11(a) of the 1933 Act.
(k) Reporting Requirements. Each of the Trust and the Company, during
the period when a prospectus is required to be delivered under the 1933 Act,
will file all documents required to be filed with the Commission by such entity
pursuant to the 1934 Act within the time periods required by the 1934 Act and
the 1934 Act Regulations.
(l) Ratings. The Offerors will use their commercially reasonable
efforts to enable Fitch Ratings and Moody's Investors Service to provide their
respective credit ratings of the Capital Securities.
(m) Use of Proceeds. The Trust will use the proceeds received by it
from the sale of the Capital Securities to purchase the Debt Securities, and the
Company will use the proceeds received by it from the sale of the Debt
Securities as described in the Registration Statement, the Prospectus and the
Disclosure Package.
(n) Lock-Up. During the 60-day period after the Closing Time, neither
the Trust nor the Company will, without the prior written consent of the
Representative, directly or indirectly, issue, sell, offer or agree to sell,
grant any option for the sale of, or otherwise dispose of, the Capital
Securities, the Debt Securities, any security convertible into, exchangeable or
exercisable for Capital Securities or the Debt Securities or any equity security
substantially similar to the Capital Securities or any debt security
substantially similar (including provisions with respect to the deferral of
interest) to the Debt Securities (except for the Securities issued pursuant to
this Agreement); provided, however, that the foregoing restrictions shall not
apply to any distribution of the Debt Securities following any liquidation of
the Trust.
(o) Issuer Free Writing Prospectuses. The Offerors represent and agree
that, unless they obtain the prior written consent of the Representative, and
each Underwriter represents and agrees that, unless it obtains the prior written
consent of the Offerors and the Representative, it has not made and will not
make any offer relating to the Securities that would constitute an "issuer free
writing prospectus" (as defined in Rule 433) or that would otherwise constitute
a "free writing prospectus" (as defined in Rule 405) required to be filed with
the Commission. Any such free writing prospectus consented to by the Offerors
and the Representative is referred to herein as a "Permitted Free Writing
Prospectus." The Offerors represent that they have treated, and agree that they
will treat, each Permitted Free Writing Prospectus as an "issuer free writing
prospectus" (as defined in Rule 433(h)(i)) and have complied and will comply
with the requirements of Rule 433 applicable to any Permitted Free Writing
Prospectus, including timely filing with the Commission where required,
legending and record keeping.
19
Subject to the consent of the Representative required in the
immediately preceding paragraph, the Offerors will prepare a final term sheet
relating solely to the final pricing terms of the Capital Securities and will
file such final term sheet within the period required by Rule 433(d)(5)(ii)
following the date such final terms have been established for such Capital
Securities. Any such final term sheet is an Issuer Free Writing Prospectus and a
Permitted Free Writing Prospectus for purposes of this Agreement.
Notwithstanding anything to the contrary contained herein, the Offerors consent
to the use by any Underwriter of a free writing prospectus that contains only
(a) (i) information describing the preliminary terms of the Capital Securities
generally or the Capital Securities specifically or their offering or (ii)
information that describes the final terms of the Capital Securities or their
offering and that is or is to be included in the final term sheet of the
Offerors contemplated in the first sentence of this paragraph or (b) other
customary information that is not "issuer information," as defined in Rule 433.
SECTION 4. Payment of Expenses.
(a) Expenses. The Company, as borrower under the Debt Securities, will
pay all expenses incident to the performance of its obligations under this
Agreement, including (i) the preparation, printing and filing of the Original
Registration Statement (including exhibits) and of each amendment thereto and
the cost of obtaining all securities and bank regulatory approvals, including
any required National Association of Securities Dealers, Inc. (the "NASD")
filing fees; (ii) the printing and delivery to the Underwriters of copies of
each preliminary prospectus, any Permitted Free Writing Prospectus and the
Prospectus and any amendments or supplements thereto and any reasonable and
documented costs associated with electronic delivery of any of the foregoing by
the Underwriters to investors; (iii) the costs of blue sky qualification
(including fees and expenses of Sidley Austin LLP, blue sky counsel to the
Underwriters, relating thereto up to a maximum of $7,500) of the Securities in
the various jurisdictions; (iv) all fees and disbursements of the Offerors'
counsel, accountants, agents and other advisors; (v) the preparation, issuance
and delivery of the certificates for the Capital Securities and the Debt
Securities; (vi) the fees and disbursements of any trustee appointed under any
of the Operative Documents and its counsel; (vii) the costs and expenses of the
Offerors relating to investor presentations on any "road show" undertaken in
connection with the marketing of the Securities, including, without limitation,
expenses associated with the production of road show slides and graphics, fees
and expenses of any consultants engaged by, or with the consent of, the Offerors
in connection with the road show presentations, travel and lodging expenses of
the representatives and officers of the Offerors and any such consultants, and
the cost of aircraft and other transportation chartered in connection with the
road show; and (viii) any fees payable in connection with the rating of the
Securities. In the event any Underwriter incurs any such fees and expenses on
behalf of the Company, the Company will reimburse such Underwriter for such
reasonable and documented fees and expenses whether or not the transactions
contemplated hereby are consummated. The Company also agrees to reimburse the
Underwriters for their reasonable and documented out-of-pocket expenses,
including, without limitation, legal fees and expenses, marketing, syndication
and travel expenses, up to a maximum of $100,000.
(b) Termination. If this Agreement is terminated by the Representative
in accordance with the provisions of Sections 5(o) or Section 9(a)(i) hereof,
the Company shall reimburse the Underwriters for all of their reasonable, actual
20
and accountable out-of-pocket expenses not to exceed $100,000, including legal
fees and expenses, marketing, syndication and travel expenses.
SECTION 5. Conditions of Underwriter's 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 or any officer of the Company or any
of its subsidiaries (including FFC) delivered pursuant to the provisions hereof,
to the performance by the Company of their obligations hereunder required to be
performed prior to Closing Time, and to the following further conditions:
(a) Filing of Prospectus. The Prospectus containing the Rule 430B
Information shall have been filed with the Commission in the manner and within
the time period required by Rule 424(b) (without reliance on Rule 424(b)(8)) (or
a post-effective amendment providing such information shall have been filed and
become effective in accordance with the requirements of Rule 430B); the
Registration Statement is effective and no stop order or other order referred to
in Section 3(a)(iv) hereof shall have been issued and no proceeding for that
purpose shall have been initiated or threatened; and all requests for additional
information on the part of the Commission shall have been complied with to the
Representative's satisfaction.
(b) Opinion of Counsel for Company. At the Closing Time, the
Representative shall have received the favorable opinions, each dated the
Closing Time, of (A) Barley Snyder LLC, counsel for the Company, in form and
substance reasonably satisfactory to the Underwriters, and in substantially the
form annexed hereto as Annex A, (B) George Barr, Senior Vice President and
General Counsel of the Company, in form and substance reasonably satisfactory to
the Underwriters and in substantially the form annexed hereto as Annex B, and
(C) Thacher Proffitt & Wood LLP, special counsel for the Company, in form and
substance reasonably satisfactory to counsel for the Underwriters, and in
substantially the form annexed hereto as Annex C. Each such counsel may state
that, insofar as its opinion involves factual matters, it has relied, to the
extent it deems proper, upon certificates of Trustees or Administrators of the
Trust, officers of the Company or any of its Subsidiaries and public officials.
(c) Opinion of Special Delaware Counsel for the Trust. At the Closing
Time, the Representative shall have received the favorable opinion, dated the
Closing Time, of Morris, James, Hitchens & Williams LLP, special Delaware
counsel for the Trust, in form and substance reasonably satisfactory to the
Underwriters, and in substantially the form annexed hereto as Annex D.
(d) Opinion of Counsel for Wilmington Trust Company. At the Closing
Time, the Representative shall have received the favorable opinion, dated the
Closing Time, of Morris, James, Hitchens & Williams LLP, counsel to Wilmington
Trust Company, as Institutional Trustee and Delaware Trustee under the Amended
Declaration, as Guarantee Trustee under the Guarantee, and as Indenture Trustee
under the Indenture, in form and substance reasonably satisfactory to the
Representative, and in substantially the form annexed hereto as Annex E.
(e) Opinion of Special Tax Counsel for the Offerors. At the Closing
Time, the Underwriters shall have received an opinion, dated the Closing Time,
21
of Thacher Proffitt & Wood LLP, special tax counsel to the Offerors, in form and
substance reasonably satisfactory to the Underwriters, that (i) the Trust will
be classified for federal income tax purposes as a grantor trust and will not be
classified as an association taxable as a corporation (ii) the Debt Securities
will be characterized for federal income tax purposes as the Company's
indebtedness, and (iii) although the discussion set forth in the Registration
Statement, the Prospectus and the Disclosure Package under the caption "Certain
U.S. Federal Income Tax Consequences" does not purport to discuss all possible
federal income tax consequences of the purchase, ownership and disposition of
the Capital Securities or the Debt Securities, such discussion, to the extent
that it constitutes matters of law or purports to describe certain provisions of
the federal income tax laws, is a correct summary in all material respects of
the matters discussed therein. 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 the Underwriters. At the Closing Time, the
Representative shall have received the favorable opinion, dated the Closing
Time, of Sidley Austin LLP, counsel for the Underwriters, with respect to the
incorporation and legal existence of the Offerors, the issuance of the Capital
Securities, the Guarantee and the Debt Securities, the execution of the
Operative Documents, the disclosure in the Registration Statement, the
Prospectus and the Disclosure Package and other related matters as the
Representative may reasonably 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
or any of its Subsidiaries and public officials.
(g) Certificates. At the Closing Time, there shall not have been,
since the date hereof or since the respective dates as of which information is
given in the Prospectus or the Disclosure Package, any Material Adverse Effect,
and the Representative shall have received a certificate of the Chief Executive
Officer or the President of the Company and of the Chief Financial Officer of
the Company and a certificate of an Administrator of the Trust, dated the
Closing Time, to the effect that (i) there has been no such Material Adverse
Effect, (ii) the representations and warranties in Section 1 hereof were true
and correct when made and are true and correct with the same force and effect as
though expressly made at and as of the Closing Time, and (iii) the Offerors and
FFC have complied with all agreements and satisfied all conditions on their part
to be performed or satisfied at or prior to the Closing Time.
(h) Independent Auditors' Comfort Letter. At the time of the execution
of this Agreement, the Representative shall have received a letter from KPMG LLP
(the "Company Independent Auditors"), 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 financial and
accounting information included in the Registration Statement, the Prospectus
and the Disclosure Package.
(i) Bring-down Comfort Letter. At the Closing Time, the Representative
shall have received from the Company Independent Auditors a letter, dated the
Closing Time, to the effect that they reaffirm the statements made in the letter
22
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 Time.
(j) Maintenance of Ratings. Subsequent to the execution of this
Agreement, there shall not have occurred a downgrading in or withdrawal of the
rating assigned to the Capital Securities by any "nationally recognized
statistical rating organization", as such term is defined by the Commission for
purposes of Rule 436(g)(2) of the 1933 Act Regulations, and no such organization
shall have publicly announced that it has under surveillance or review, or has
changed its outlook with respect to, its rating of the Capital Securities (other
than an announcement with positive implications of a possible upgrading).
(k) DTC. At the Closing Time, the Capital Securities shall be eligible
for clearance, settlement and trading through the facilities of DTC.
(l) Securities and Operative Documents. The Capital Securities shall
have been duly executed and delivered by the Trust and the Institutional
Trustee; the Debt Securities shall have been duly executed and delivered by the
Company and the Indenture Trustee; the Guarantee shall have been duly executed
and delivered by the Company and the Guarantee Trustee; the Indenture shall have
been duly executed and delivered by the Company and the Indenture Trustee; and
the Amended Declaration shall have been duly executed and delivered by the
Company, the Administrators, the Institutional Trustee and the Delaware Trustee.
(m) No Legal Impediment to Issuance. No action shall have been taken
and no statute, rule, regulation or order shall have been enacted, adopted or
issued by any federal, state or foreign governmental or regulatory authority
that would, as of the Closing Time, prevent the offer, issuance or sale of the
Securities; and no injunction or order of any federal, state or foreign court
shall have been issued that would, as of the Closing Time, prevent the issuance
or sale of the Capital Securities.
(n) Additional Documents. At the Closing Time, counsel for the
Underwriters shall have been furnished such documents and opinions as they may
reasonably require for the purpose of enabling them to pass upon the issuance
and sale of the Capital Securities as herein contemplated, or in order to
evidence the accuracy of any of the representations or warranties of the
Offerors, or the fulfillment of any of the conditions, herein contained; and all
proceedings taken by the Offerors in connection with the issuance and sale of
the Capital Securities as herein contemplated shall be reasonably satisfactory
in form and substance to the Representative and counsel for the Underwriters.
(o) 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 Representative by notice to the Offerors at
any time at or prior to the Closing Time, and such termination shall be without
liability of any party to any other party except as provided in Section 4 hereof
and except that Sections 6 and 7 hereof shall survive any such termination and
remain in full force and effect.
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SECTION 6. Indemnification.
(a) Indemnification of Underwriters. The Offerors and FCC agree,
jointly and severally, to indemnify and hold harmless: (x) each Underwriter; (y)
each person, if any, who controls (within the meaning of Section 15 of the 1933
Act or Section 20 of the 1934 Act) any Underwriter (each such person, a
"controlling person"); and (z) the respective partners, directors, officers,
employees and agents of each Underwriter or any such controlling person as
follows:
(1) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of (A) any untrue statement or alleged
untrue statement of a material fact included in the Registration Statement (or
any amendment thereto) 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 (B) any untrue statement or alleged untrue statement
of a material fact included in any preliminary prospectus, the Prospectus or any
Issuer Free Writing 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;
(2) 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) hereof) any such
settlement is effected with the written consent of the Offerors; and
(3) against any and all expense whatsoever, as incurred (including the
fees and disbursements of counsel chosen by the Representative), 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 (1) or (2) above;
provided, however, that this indemnity agreement 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 or omission made in reliance
upon and in conformity with information furnished to the Company or the Trust by
the Underwriters through the Representative for inclusion in the Prospectus (or
any amendment or supplement thereto) and the parties hereto agree that such
information consists only of the following: the fifth and eighth paragraphs
(exclusive of the penultimate sentence of the eighth paragraph) under the
heading "Underwriting" beginning on page S-63 of the Prospectus and the first
and second sentences of the paragraph under the heading "Risk Factors - The
absence of a public market may adversely affect your ability to sell the capital
securities" on page S-16 of the Prospectus (collectively, the "Underwriters'
Information").
(b) Indemnification of Offerors, Directors and Officers. Each
Underwriter, severally and not jointly, agrees to indemnify and hold harmless
the Company, its directors, officers, employees and agents, the Trust, each of
the Administrators and each person, if any, who controls the Company or the
24
Trust 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 Section 6(a) above, as incurred, but only with
respect to untrue statements or omissions, or alleged untrue statements or
omissions, made in conformity with the Underwriters' Information provided by
such Underwriter.
(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. An indemnifying party may participate at its own
expense in the defense of any such action or, if it so elects within a
reasonable time after receipt of such notice, to assume the defense of any suit
brought to enforce any such claim; but if it so elects to assume the defense,
such defense shall be conducted by counsel chosen by it and approved by the
indemnified parties, which approval shall not be unreasonably withheld. In the
event that an indemnifying party elects to assume the defense of any such suit
and retain such counsel, the indemnified party or parties shall bear the fees
and expenses of any additional counsel thereafter retained by such indemnified
party or parties; provided, however, that the indemnified party or parties shall
have the right to employ counsel (in addition to local counsel) to represent the
indemnified party or parties who may be subject to liability arising out of any
action in respect of which indemnity may be sought against the indemnifying
party if, in the reasonable judgment of counsel for the indemnified party or
parties, there may be legal defenses available to such indemnified person which
are different from or in addition to those available to such indemnifying
person, in which event the reasonable fees and expenses of appropriate separate
counsel shall be borne by the indemnifying 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. 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.
(d) Settlement without Consent if Failure to Reimburse. If at any time
an indemnified party shall have validly requested an indemnifying party to
reimburse the indemnified party for fees and expenses of counsel, such
indemnifying party agrees that it shall be liable for any settlement of the
nature contemplated by Section 6(a)(2) effected without its written consent if
(i) such settlement is entered into more than 45 days after receipt by such
indemnifying party of the aforesaid request, (ii) such indemnifying party shall
have received notice of the terms of such settlement at least 30 days prior to
25
such settlement being entered into and (iii) such indemnifying party shall not
have reimbursed such indemnified party in accordance with such request prior to
the date of such settlement.
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 unavailable to an indemnified
party or insufficient 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) is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of the Offerors, on the one hand, and the
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 equitable 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
bears to the aggregate initial offering price of the Capital Securities.
The relative fault of the Offerors, 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 statements of a material
fact or omission or alleged omission to state a material fact relates to
information supplied by the Offerors or by the Underwriters and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission.
The Offerors, FFC 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 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 such Capital Securities were sold by it to its investors 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.
26
No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the 1933 Act) 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 and the respective partners, directors, officers, employees and
agents of such Underwriter or any such controlling person shall have the same
rights to contribution as such Underwriter, while each officer, employee, agent
and director of the Company, each Administrator of the Trust and each person, if
any, who controls the Company or the Trust 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 Offerors.
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 its subsidiaries
(including FFC) 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 Representative may terminate this
Agreement, by notice to the Offerors, at any time at or prior to the Closing
Time if, since the time of execution of this Agreement or since the respective
dates as of which information is given in the Prospectus or the Disclosure
Package, (i) there has occurred any Material Adverse Effect, or (ii) there has
occurred any material adverse change in the financial markets in the United
States, any outbreak of hostilities or escalation thereof or any other calamity
or crisis, or any change or development involving a prospective change in
national political, financial or economic conditions, in each case the effect of
which is such as to make it, in the reasonable judgment of the Representative,
impracticable to market the Capital Securities or to enforce contracts for the
sale of the Capital Securities, or (iii) trading in any securities of the
Company has been suspended or limited by the Commission or by the NASDAQ
National Market, or if trading generally on the American Stock Exchange, the New
York Stock Exchange or the NASDAQ National Market 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 NASD or any other governmental authority, or (iv) a
banking moratorium has been declared by the United States, Delaware, New York or
Pennsylvania authorities or a material disruption has occurred in commercial
banking or securities settlement and clearances services in the United States.
(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
1, 6 and 7 hereof shall survive such termination and remain in full force and
effect.
27
SECTION 10. Defaulting Underwriter.
(a) If, at the Closing Time, any Underwriter defaults on its
obligation to purchase the Capital Securities that it has agreed to purchase
hereunder, the Representative may in its discretion arrange for the purchase of
such Capital Securities by other persons satisfactory to the Company on the
terms contained in this Agreement. If other persons become obligated or agree to
purchase the Capital Securities of a defaulting Underwriter, either the
Representative or the Company may postpone the Closing Time for up to five (5)
full business days in order to effect any changes that in the opinion of counsel
for the Offerors or counsel for the Underwriters may be necessary in the
Prospectus or in any other document or arrangement, and the Company agrees to
promptly prepare any amendment or supplement to the Prospectus that effects any
such changes. As used in this Agreement, the term "Underwriter" includes, for
all purposes of this Agreement unless the context otherwise requires, any person
not listed in Schedule I hereto that, pursuant to this Section 10, purchases
Capital Securities that a defaulting Underwriter agreed but failed to purchase.
(b) If, after giving effect to any arrangement for the purchase of the
Capital Securities of a defaulting Underwriter or Underwriters by the
Representative and the Company as provided in paragraph (a) above, the aggregate
liquidation amount of such Capital Securities that remains unpurchased does not
exceed 10% of the aggregate liquidation amount of all of the Capital Securities,
then the Company shall have the right to require each non-defaulting Underwriter
to purchase the aggregate liquidation amount of Capital Securities that such
Underwriter agreed to purchase hereunder plus such Underwriter's pro rata share
(based on the aggregate liquidation amount of Capital Securities that such
Underwriter agreed to purchase hereunder) of the Capital Securities of such
defaulting Underwriter or Underwriters for which such arrangement has not been
made.
(c) If, after giving effect to any arrangements for the purchase of
the Capital Securities of a defaulting Underwriter or Underwriters by the
non-defaulting Underwriter and the Company as provided in paragraph (a) above,
the aggregate liquidation amount of such Capital Securities that remains
unpurchased exceeds 10% of the aggregate liquidation amount of all of the
Capital Securities, or if the Company shall not exercise the right described in
paragraph (b) above, then this Agreement shall terminate without liability on
the part of the non-defaulting Underwriters. Any termination of this Agreement
pursuant to this Section 10 shall be without liability on the part of the
Offerors, except that the Company will continue to be liable for the payment of
expenses as set forth in Section 4 hereof and except that the provisions of
Sections 1, 6 and 7 hereof shall not terminate and shall remain in effect.
(d) Nothing contained herein shall relieve a defaulting Underwriter of
any liability it may have to the Offerors or any non-defaulting Underwriter for
damages caused by its default.
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 Sandler O'Neill & Partners, L.P., 919 Third
Avenue, 6th Floor, New York, New York 10022, Attention: Michael Lacovara,
Principal, with a copy to Sidley Austin LLP, 787 Seventh Avenue, New York,
28
NY 10019, Attention: Edward Petrosky; and notices to the Offerors or FFC shall
be directed to them at P.O. Box 4887, Lancaster, Pennsylvania 17604, Attention:
General Counsel, with a copy to Thacher Proffitt & Wood LLP, Two World Financial
Center, New York, NY 10281, Attention: Robert Azarow.
SECTION 12. Parties. This Agreement shall inure to the benefit of and
be binding upon each Underwriter, the Offerors and FFC 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, the Offerors and FFC, and their respective successors and the
controlling persons and other persons referred to in Sections 1, 6 and 7 hereof
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 other persons
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. Counterparts; Facsimile. This Agreement may be executed in
any number of counterparts and by the parties hereto in separate counterparts,
and signature pages may be delivered by facsimile, each of which when so
executed shall be deemed to be an original and all of which taken together shall
constitute one and the same agreement.
SECTION 14. GOVERNING LAW; JURISDICTION. THIS AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK
WITHOUT REGARD TO CONFLICT OF LAW PRINCIPLES OF SAID STATE OTHER THAN SECTION
5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW.
EACH OF THE TRUST, THE COMPANY ON BEHALF OF ITSELF AND ITS
SUBSIDIARIES, AND FFC HEREBY IRREVOCABLY SUBMITS TO THE EXCLUSIVE JURISDICTION
OF THE FEDERAL AND NEW YORK STATE COURTS LOCATED IN THE CITY OF NEW YORK IN
CONNECTION WITH ANY SUIT, ACTION OR PROCEEDING RELATED TO THIS AGREEMENT OR ANY
OF THE MATTERS CONTEMPLATED HEREBY, IRREVOCABLY WAIVES ANY DEFENSE OF LACK OF
PERSONAL JURISDICTION AND IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY
SUIT, ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH COURT. EACH
OF THE TRUST, THE COMPANY ON BEHALF OF ITSELF AND ITS SUBSIDIARIES, AND FFC
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT IT MAY EFFECTIVELY DO SO UNDER
APPLICABLE LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING
OF VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT AND
ANY CLAIM THAT ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS
BEEN BROUGHT IN AN INCONVENIENT FORUM.
29
SECTION 15. Effect of Headings. The Article and Section headings
herein are for convenience only and shall not affect the construction hereof.
SECTION 16 Nature of Relationship. The Offerors acknowledge and agree
that (a) the offering or purchase and sale of the Capital Securities pursuant to
this Agreement, including the determination of the terms of the Capital
Securities and the offering thereof, is an arm's-length commercial transaction
between the Offerors, on the one hand, and the several Underwriters, on the
other hand, (b) in connection with the offering pursuant to this Agreement and
the process leading to such offering each Underwriter is and has been acting
solely as a principal and not a fiduciary of the Company or its stockholders,
creditors, employees or any other party, (c) no Underwriter has assumed or will
assume an advisory or fiduciary responsibility in favor of the Company or the
Trust with respect to the offering pursuant to this Agreement or the process
leading thereto (irrespective of whether such Underwriter has advised or is
currently advising the Company on other matters) and no Underwriter has any
obligation to the Company or the Trust with respect to the offering pursuant to
this Agreement except the obligations expressly set forth in this Agreement, (d)
the Underwriters and their respective affiliates may be engaged in a broad range
of transactions that involve interests that differ from those of the Company and
(e) the Underwriters have not provided any legal, accounting, regulatory or tax
advice with respect to the offering contemplated hereby and the Company has
consulted its own legal, accounting, regulatory and tax advisors to the extent
it deemed appropriate.
30
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
among the Underwriters, the Offerors and FFC in accordance with its terms.
Very truly yours,
FULTON FINANCIAL CORPORATION
By: /s/ Charles J. Nugent
------------------------------------
Charles J. Nugent
Senior Executive Vice President and
Chief Financial Officer
FULTON CAPITAL TRUST I
By: FULTON FINANCIAL CORPORATION,
as Sponsor
By: /s/ Charles J. Nugent
------------------------------------
Charles J. Nugent
Senior Executive Vice President and
Chief Financial Officer
FFC MANAGEMENT, INC.
By: /s/ Charles J. Nugent
------------------------------------
Charles J. Nugent
President
CONFIRMED AND ACCEPTED, as of the
date first above written:
SANDLER O'NEILL & PARTNERS, L.P.
By: Sandler O'Neill & Partners Corp.,
the sole general partner
By: /s/ Michael Lacovara
---------------------------------
Michael Lacovara
Secretary
For itself and as Representative of the other Underwriters named in Schedule I
hereto.
SCHEDULE I
Aggregate Liquidation
Amount of Capital
Name of Underwriter Securities to be Purchased
- ------------------- --------------------------
Sandler O'Neill & Partners, L.P. $ 90,000
Keefe, Brunette & Woods, Inc. 15,000
Key Banc Capital Markets, a division of
McDonald Investments Inc. 15,000
Morgan Stanley & Co. Incorporated 15,000
Ryan, Beck & Co. 15,000
------------
Total $150,000,000
============
32
SCHEDULE II
ALL ISSUER FREE WRITING PROSPECTUSES
Free Writing Prospectus dated January 20, 2006
33
ANNEX A
Pursuant to Section 5(b)(A) of the Agreement, Barley Snyder LLC, counsel for the
Company, shall deliver an opinion in substantially the following form.
Capitalized terms not defined herein shall have the respective meanings ascribed
to them in the Agreement.
(a) Good Standing of the Company. The Company is validly existing as a
corporation in good standing under the laws of the Commonwealth of Pennsylvania
and has corporate power and authority to own, lease and operate its properties
and to conduct its business as described in the Prospectus, to enter into and
perform its obligations under each of the Operative Documents to which it is a
party, and to issue the Debt Securities and execute the Guarantee, and the
Company is duly qualified as a foreign corporation in the State of New Jersey.
(b) Good Standing of the Subsidiaries. Each of the Subsidiaries is
validly existing as a corporation, bank, trust or association, as the case may
be, in good standing under the laws of its jurisdiction of incorporation,
organization, formation or association, as the case may be, and has corporate
power and authority to own, lease and operate its properties and to conduct its
business as described in the Prospectus; and, with respect to the Bank
Subsidiaries, each is a member in good standing of its applicable Federal Home
Loan Bank, the deposit accounts of each Bank Subsidiary are insured up to the
applicable limit by the FDIC, and, to our knowledge, no proceedings for the
revocation or termination of such insurance are pending or threatened.
(c) Financial Holding Company. The Company is a "financial holding
company" as such term is defined by the GLBA.
(d) Bank Holding Company. The Company is duly registered as a bank
holding company under the BHCA.
(e) Due Authorization. The Company and FFC have full right, power and
authority to execute and deliver the Operative Documents to which they are a
party and to perform their respective obligations thereunder; and all action
required to be taken for the due and proper authorization, execution and
delivery of each of the Operative Documents and the consummation of the
transactions contemplated thereby has been duly and validly taken.
(f) Authorization of Agreement. The Agreement has been duly
authorized, executed and delivered by the Company.
(g) Authorization of Guarantee. The Guarantee has been duly authorized
by the Company and, at the Closing Time, the Guarantee will have been duly
executed and delivered by the Company.
(h) Authorization of Amended Declaration. The Amended Declaration has
been duly authorized by the Company and, at the Closing Time, will have been
duly executed and delivered by the Company and the Administrators.
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(i) Authorization of Indenture. The Indenture has been duly authorized
by the Company, and, at the Closing Time, will have been duly executed and
delivered by the Company.
(j) Authorization of Debt Securities. The Debt Securities have been
duly authorized by the Company and, at the Closing Time, the Debt Securities
will have been duly executed by the Company and delivered to the Trust.
(k) Authorization of Administrators. Each of the Administrators of the
Trust is an officer or employee of the Company and has been duly authorized by
the Company to execute and deliver the Amended Declaration.
(l) Absence of Conflicts. The execution, delivery and performance by
the Company and FFC of the Operative Documents to which it is a party, the
issuance, sale and delivery of the Debt Securities and the Guarantee, the
consummation of the transactions contemplated by the Operative Documents and
compliance by the Company and FFC with the terms of the Operative Documents to
which it is a party have been duly authorized by all necessary corporate action
on the part of the Company and FFC, as applicable, and do not and will not,
whether with or without the giving of notice or passage of time or both, (i) to
our knowledge, violate, conflict with or constitute a breach of, or default or
Repayment Event under, or result in the creation or imposition of any, security
interest, mortgage, pledge, lien, charge, encumbrance, claim or equitable right
upon any assets of the Company, FFC or any of the Subsidiaries pursuant to, any
of the Agreements and Instruments, (ii) result in any violation of any provision
of the charter, bylaws or other organizational document of the Company, FFC or
any of the Subsidiaries or (iii) result in any violation by the Company, FFC or
any of the Subsidiaries of any applicable law, statute, rule, regulation, or, to
our knowledge, judgment, order, writ or decree (including, without limitation,
the Banking Regulations) of any state or federal government, governmental
authority, agency or instrumentality or court, domestic or foreign (including,
without limitation, the Banking Regulators).
(m) Absence of Further Requirements. No filing with, or authorization,
approval, consent, license, order, registration, qualification or decree of, any
government, governmental authority, agency or instrumentality or court, domestic
or foreign (including, without limitation, the Banking Regulators), other than
those that have been made or obtained, is necessary or required for the
authority, execution, delivery or performance by the Company or FFC of its
obligations under the Operative Documents, the Debt Securities or the Guarantee,
as applicable, or the consummation by the Company of the transactions
contemplated thereunder, except as may be required under state securities laws,
as to which we express no opinion.
(n) Absence of Proceedings. To our knowledge, there is no action,
suit, proceeding, inquiry or investigation before or brought by any court,
government, governmental authority, agency or instrumentality or court, domestic
or foreign (including, without limitation, the Banking Regulators), now pending
or threatened against or affecting the Trust or the Company or any of the
Subsidiaries that (i) is required to be disclosed in the Registration Statement,
(ii) could have a Material Adverse Effect or (iii) could materially and
adversely affect their respective assets or the consummation of the transactions
contemplated by the Agreement and the other Operative Documents or the
A-2
performance by the Trust or the Company of their respective obligations
thereunder; and except as described in the Registration Statement, Disclosure
Package and Prospectus, there are no legal or governmental proceedings to which
the Trust or the Company or any of the Subsidiaries is a party or of which any
of their respective assets is the subject, including ordinary routine litigation
incidental to the business, which would, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect.
(o) Incorporated Documents. The documents incorporated by reference in
the Prospectus (other than the financial statements and supporting schedules
included therein or omitted therefrom, as to which we need express no opinion),
when they were filed with the Commission, complied as to form in all material
respects with the requirements of the 1934 Act and the 1934 Act Regulations.
(p) Regulatory Disclosure. The statements in the Prospectus under the
captions "Risk Factors - We are a holding company, and banking laws and
regulations could limit our access to funds from our subsidiary banks with the
result that we may not have access to sufficient cash to make payments on the
debt securities", "- The supervision and regulation to which Fulton Financial is
subject can be a competitive disadvantage" and the statements in the Company's
10-K for the fiscal year ended December 31, 2004 under the caption
"Business-Supervision and Regulation", to the extent that such statements
constitute matters of law or legal conclusions or descriptions of statutes,
regulations, legal or governmental proceedings or contracts, have been reviewed
by us and are accurate summaries in all material respects.
Nothing has come to our attention that would lead us to believe that (i)
the Registration Statement or any amendment thereto (except for financial
statements and schedules and other financial data included or incorporated by
reference therein or omitted therefrom and the Form T-1, as to which we need
make no statement), at the time the Registration Statement became effective on
December 27, 2005 or at each deemed effective date with respect to the
Securities pursuant to Rule 430B(f)(2) of the 1933 Act Regulations, 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 not misleading;
(ii) the Prospectus or any amendment or supplement thereto (except for financial
statements and schedules and other financial data included or incorporated by
reference therein or omitted therefrom and the Form T-1, as to which we need
make no statement), at the time the Prospectus was issued, at the time any such
amended or supplemented prospectus was issued or at the Closing Time, included
or includes an untrue statement of a material fact or omitted or omits to state
a material fact necessary in order to make the statements therein, in the light
of the circumstances under which they were made, not misleading; or (iii)
Disclosure Package (except for the financial statements and schedules and other
financial data included or incorporated by reference therein or omitted
therefrom, as to which we need make no statement), as of the Applicable Time,
contained any untrue statement of a material fact or omitted to state any
material fact necessary in order to make the statements therein, in the light of
circumstances under which they were made, not misleading.
A-3
ANNEX B
Pursuant to Section 5(b)(B) of the Agreement, George Barr, Senior Vice President
and General Counsel of the Company, shall deliver an opinion in substantially
the following form. Capitalized terms not defined herein shall have the
respective meanings ascribed to them in the Agreement.
(a) Capital Stock Duly Authorized and Validly Issued. To my knowledge,
(i) all of the issued and outstanding shares of capital stock of the Company
have been duly authorized and validly issued and are fully paid and
nonassessable; (ii) all of the issued and outstanding shares of capital stock of
each of the Subsidiaries have been duly authorized and validly issued, are fully
paid and nonassessable and are owned of record by the Company free and clear of
any security interest, mortgage, pledge, lien, encumbrance, claim or equitable
right; and (iii) none of the issued and outstanding shares of capital stock of
the Company or any Subsidiary were issued in violation of any preemptive or
similar rights of any shareholder of the Company or such Subsidiary, as the case
may be, arising by operation of law, or under the certificate of incorporation,
by-laws or other organizational documents of the Company or such Subsidiary or
under any agreement to which the Company or such Subsidiary is a party.
(b) Capitalization. The authorized, and to my knowledge, issued and
outstanding capital stock and consolidated long term debt (i.e., a maturity of
greater than one year) of the Company as of September 30, 2005 is as set forth
in the Prospectus under "Capitalization"; there have not been any subsequent
issuances of capital stock of the Company (except issuances of common stock
pursuant to exercises of employee stock options and pursuant to the Company's
dividend reinvestment plan and employee stock purchase plan); and there has not
been any additional long term borrowings by the Company or its consolidated
subsidiaries since such date, except, with respect to the Bank Subsidiaries,
pursuant to Federal Home Loan Bank advances, securities sold under agreements to
repurchase incurred by the Bank Subsidiaries in their ordinary course of
business or obligations among entities within the Company's consolidated group.
(c) Absence of Defaults. To my knowledge, neither the Company nor any
of the Subsidiaries is (i) in violation of its charter, bylaws or other
organizational document, (ii) in default in the performance or observance of any
obligation, agreement, covenant or condition contained in any Agreement or
Instrument or (iii) in violation of any applicable law, statute, rule,
regulation, judgment, order, writ or decree (including, without limitation, the
Banking Regulations) of any state or federal government, governmental authority,
agency or instrumentality or court, domestic or foreign (including, without
limitation, the Banking Regulators), except, in the case of clauses (i), (ii)
and (iii) above, for any such default or violation that would not, individually
or in the aggregate, have a Material Adverse Effect.
(d) Absence of Conflicts. The execution, delivery and performance by
the Company of the Operative Documents to which it is a party, the issuance,
sale and delivery of the Debt Securities and the Guarantee, the consummation of
the transactions contemplated by the Operative Documents and compliance by the
Company with the terms of the Operative Documents to which it is a party have
B-1
been duly authorized by all necessary corporate action on the part of the
Company and do not and will not, whether with or without the giving of notice or
passage of time or both, result in any violation of any provision of the
charter, bylaws or other organizational document of the Company or any of the
Subsidiaries.
(e) Governmental Licenses. To my knowledge, each of the Company and
its Bank Subsidiaries possesses such permits, licenses, approvals, consents and
other authorizations (collectively, "Governmental Licenses") issued by the
appropriate federal or state governmental or regulatory authorities (including,
without limitation, the Banking Regulators) necessary to conduct the business
now operated by it, and have made the declarations and filings with the
appropriate federal and state governmental or regulatory authorities (including,
without limitation, the Banking Regulators) that are necessary for the conduct
of its businesses as described in the Prospectus, except where the failure to
possess such Governmental Licenses or make such declarations or filings would
not, singularly or in the aggregate, have a Material Adverse Effect.
(f) Bank Subsidiaries. Each Bank Subsidiary of the Company is validly
existing as a bank and subsisting under the laws of its jurisdiction of
organization, formation or association, as the case may be, and has corporate
power and authority to own, lease and operate its properties and to conduct its
business as described in the Prospectus.
B-2
ANNEX C
Pursuant to Section 5(b)(C) of the Agreement, Thacher Proffitt & Wood LLP,
counsel for the Company, shall deliver an opinion in substantially the following
form. Capitalized terms not defined herein shall have the respective meanings
ascribed to them in the Agreement.
(a) Good Standing of the Trust. The Trust has been duly created and is
validly existing in good standing as a statutory trust under the Delaware Act
with the power and authority to own property and to conduct its business as
described in the Prospectus, to enter into and perform its obligations under
each of the Operative Documents to which it is a party and to issue the Capital
Securities and the Common Securities; the Trust is not a party to or otherwise
bound by any agreement other than the Operative Documents to which it is a party
and those described in the Prospectus; and the Trust is, and will be, under
current law, classified for U.S. federal income tax purposes as a grantor trust
and not as an association taxable as a corporation.
(b) Authorization of Common Securities. At the Closing Time, the
Common Securities will have been duly authorized for issuance by the Trust
pursuant to the Amended Declaration and, when duly issued and executed in
accordance with the Amended Declaration and delivered by the Trust to the
Company against payment therefor in accordance with the subscription agreement
therefor, will be validly issued and fully paid and nonassessable undivided
common beneficial ownership 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 Closing Time, all of the issued and outstanding Common Securities of
the Trust will be owned directly by the Company, free and clear of any security
interest, mortgage, pledge, lien, encumbrance, claim or equitable right.
(c) Authorization of Capital Securities. At the Closing Time, the
Capital Securities will have been duly authorized for issuance by the Trust
pursuant to the Amended Declaration, and the Capital Securities, when duly
issued, executed and authenticated in accordance with the Amended Declaration
and delivered by the Trust against payment therefor as provided in the
Agreement, will be validly issued and fully paid and nonassessable undivided
preferred beneficial ownership interests in the assets of the Trust; the
issuance of the Capital Securities will not be subject to preemptive or other
similar rights; and the Capital Securities will be in the form contemplated by,
and entitled to the benefits of, the Amended Declaration and the Guarantee.
(d) Authorization of Agreement. The Agreement has been duly
authorized, executed and delivered by the Trust and FFC.
(e) Authorization of Amended Declaration. Assuming that the Amended
Declaration has been duly authorized by the Company and, at the Closing Time,
will have been duly executed and delivered by the Company and the
Administrators, and assuming due authorization, execution and delivery of the
Amended Declaration by the Institutional Trustee and the Delaware Trustee, the
Amended Declaration will be, at the Closing Time, a valid, legal and binding
agreement of the Company, enforceable against the Company in accordance with its
terms, except to the extent that enforceability may be limited by (a)
bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or
C-1
other similar laws now or hereafter in effect relating to creditors' rights
generally and (b) general principles of equity (regardless of whether
enforceability is considered in a proceeding at law or in equity) (collectively,
the "Enforceability Exceptions").
(f) Authorization of Guarantee. Assuming that the Guarantee has been
duly authorized by the Company and, at the Closing Time, the Guarantee will have
been duly executed and delivered by the Company, the Guarantee will constitute a
valid, legal and binding agreement of the Company, enforceable against the
Company in accordance with its terms, except to the extent that enforceability
may be limited by the Enforceability Exceptions.
(g) Authorization of Indenture. Assuming that the Indenture has been
duly authorized by the Company, and, at the Closing Time, will have been duly
executed and delivered by the Company and, assuming the authorization, execution
and delivery of the Indenture by the Indenture Trustee, the Indenture will
constitute a valid, legal and binding agreement of the Company, enforceable
against the Company in accordance with its terms, except to the extent that
enforceability may be limited by the Enforceability Exceptions.
(h) Authorization of Debt Securities. Assuming that the Debt
Securities have been duly authorized by the Company and, at the Closing Time,
the Debt Securities will have been duly executed by the Company, when
authenticated in the manner provided for in the Indenture and delivered by the
Company to the Trust against payment therefor as described in the Prospectus,
will constitute valid, legal and binding obligations of the Company, enforceable
against the Company in accordance with their terms, except to the extent that
enforceability may be limited by the Enforceability Exceptions; and the Debt
Securities will be in the form contemplated by, and will be entitled to the
benefits of, the Indenture.
(i) Qualification under 1939 Act. Each of the Amended Declaration, the
Guarantee and the Indenture has been duly qualified under the 1939 Act.
(j) Not an Investment Company. Neither the Trust nor the Company is,
and immediately following consummation of the transactions contemplated in the
Agreement and the application of the net proceeds as described in the
Prospectus, neither the Trust nor the Company will be, an "investment company"
required to be registered under the Investment Company Act of 1940, as amended.
(k) Descriptions of Securities and Operative Documents. Each of the
Securities and the Operative Documents conform in all material respects to the
descriptions thereof contained in the Registration Statement, Disclosure Package
and Prospectus.
(l) Absence of Defaults and Conflicts. The Trust is not in violation
of the trust certificate of the Trust filed with the State of Delaware (the
"Trust Certificate") or the Amended Declaration; and the execution, delivery and
performance of the Operative Documents by the Trust and the issuance, sale and
delivery of the Capital Securities and the consummation of the transactions
contemplated by the Operative Documents, at the Closing Time, will have been
duly authorized by all necessary action on the part of the Trust, and do not and
will not, whether with or without the giving of notice or passage of time or
both, (i) violate, conflict with or constitute a breach of, or default or
C-2
Repayment Event under, or result in the creation or imposition of any, security
interest, mortgage, pledge, lien, charge, encumbrance, claim or equitable right
upon any assets of the Trust pursuant to, any of the Agreements and Instruments,
or (ii) result in any violation of any provision of the Amended Declaration or
the Trust Certificate.
(m) Absence of Further Requirements. No filing with, or authorization,
approval, consent, license, order, registration, qualification or decree of, any
government, governmental authority, agency or instrumentality or court, domestic
or foreign (including, without limitation, the Banking Regulators), other than
those that have been made or obtained, is necessary or required for the
authority, execution, delivery or performance by the Trust of its obligations
under the Operative Documents, or the consummation by the Trust of the
transactions contemplated thereunder, except as may be required under state
securities laws, as to which we express no opinion.
(n) Good Standing of FFC. FFC has been incorporated and is validly
existing as a corporation in good standing under the laws of the State of
Delaware and has corporate power and authority to own, lease and operate its
properties and to conduct its business as described in the Prospectus and to
enter into and perform its obligations under the Agreement.
(o) Due Authorization. FFC has full right, power and authority to
execute and deliver the Agreement and to perform its obligations thereunder; and
all action required to be taken for the due and proper authorization, execution
and delivery of the Agreement, the consummation of the transactions contemplated
thereby and the performance by FFC of its obligations thereunder has been duly
and validly taken.
(p) Capital Stock Duly Authorized and Validly Issued. All of the
issued and outstanding shares of capital stock of FFC have been duly authorized
and validly issued, are fully paid and nonassessable and are owned by the
Company, directly or through one or more Subsidiaries, free and clear of any
security interest, mortgage, pledge, lien, encumbrance, claim or equitable
right; and none of the issued and outstanding shares of capital stock of FFC
were issued in violation of any preemptive or similar rights of any shareholder
of FFC arising by operation of law, or under the certificate of incorporation or
by-laws of FFC or under any agreement to which FFC is a party.
(q) Effectiveness of Registration Statement and Filings. The
Registration Statement has become effective under the 1933 Act; any required
filing of each prospectus relating to the Securities (including the Prospectus)
pursuant to Rule 424(b) has been made in the manner and within the time period
required by Rule 424(b) (without reference to Rule 424(b)(8)); any required
filing of each Issuer Free Writing Prospectus pursuant to Rule 433 has been made
in the manner and within the time period required by Rule 433(d); and, to our
knowledge, based on a telephone conversation with a member of the staff of the
Commission, no stop order suspending the effectiveness of the Registration
Statement has been issued under the 1933 Act and no proceedings for that purpose
have been instituted or are pending or threatened by the Commission.
(r) Compliance as to Form. The Registration Statement, including,
without limitation, the Rule 430B Information, the Prospectus, excluding the
C-3
documents incorporated by reference therein, and each amendment or supplement to
the Registration Statement and the Prospectus, excluding the documents
incorporated by reference therein, as of their respective effective or issue
dates (including, without limitation, each deemed effective date with respect to
the Securities pursuant to Rule 430B(f)(2) of the 1933 Act Regulations), other
than the financial statements and supporting schedules included therein or
omitted therefrom and the trustees' Statement of Eligibility on Form T-1
(collectively, the "Form T-1"), as to which we need express no opinion, complied
as to form in all material respects with the requirements of the 1933 Act and
the 1933 Act Regulations.
(s) The statements in the Prospectus under the caption "Certain U.S.
Federal Income Tax Consequences," to the extent that such statements constitute
matters of law or legal conclusions or descriptions of statutes, regulations,
legal or governmental proceedings or contracts, have been reviewed by us and are
accurate summaries in all material respects.
Nothing has come to our attention that would lead us to believe that (i)
the Registration Statement or any amendment thereto (except for financial
statements and schedules, other economic, statistical and financial data
included or incorporated by reference therein, and the Form T-1, as to which we
need make no statement), at the time the Registration Statement became effective
on December 27, 2005 or at each deemed effective date with respect to the
Securities pursuant to Rule 430B(f)(2) of the 1933 Act Regulations, 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 not misleading;
(ii) the Prospectus or any amendment or supplement thereto (except for financial
statements and schedules and other economic, statistical and financial data
included or incorporated by reference therein and the Form T-1, as to which we
need make no statement), at the time the Prospectus was issued, at the time any
such amended or supplemented Prospectus was issued or at the Closing Time,
included or includes an untrue statement of a material fact or omitted or omits
to state a material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading; or
(iii) Disclosure Package (except for the financial statements and schedules and
other economic, statistical and financial data included or incorporated by
reference therein, as to which we need make no statement), as of the Applicable
Time, contained any untrue statement of a material fact or omitted to state any
material fact necessary in order to make the statements therein, in the light of
circumstances under which they were made, not misleading.
C-4
ANNEX D
Pursuant to Section 5(c) of the Agreement, special Delaware counsel for the
Trust shall deliver an opinion in substantially the following form:
(a) The Trust has been duly formed and is validly existing in good
standing as a statutory trust under the Delaware Statutory Trust Act.
(b) The Amended Declaration constitutes a valid and binding obligation
of the Sponsor and Trustees and Administrators party thereto, enforceable
against such Sponsor and Trustees in accordance with its terms.
(c) Under the Delaware Statutory Trust Act and the Amended
Declaration, the Trust has the requisite trust power and authority (i) to own
its properties and conduct its business, all as described in the Amended
Declaration, (ii) to execute and deliver, and perform its obligations under, the
Operative Documents to which it is a party, (iii) to issue, sell and perform its
obligations under its Capital Securities, and (iv) to purchase and hold the Debt
Securities.
(d) The Capital Securities of the Trust have been duly authorized for
issuance by the Trust and, when issued, executed and authenticated in accordance
with the Amended Declaration and delivered against payment therefor in
accordance with the Amended Declaration and the Agreement, will be validly
issued and, subject to the qualifications set forth in paragraph 5 below, fully
paid and nonassessable undivided beneficial interests in the assets of the Trust
and the holders of Capital Securities will be entitled to the benefits provided
by the Amended Declaration.
(e) Each holder of Capital Securities, in such capacity, 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. We note, however, that the holders of Capital
Securities may be required to make payment or provide indemnity or security as
set forth in the Amended Declaration.
(f) Under the Amended Declaration and the Delaware Statutory Trust
Act, the issuance of the Capital Securities of the Trust is not subject to
preemptive rights.
(g) The Common Securities of the Trust have been duly authorized for
issuance by the Trust and, when issued and executed in accordance with the
Amended Declaration and delivered against payment therefor in accordance with
the Amended Declaration and the Common Securities Subscription Agreement, will
be validly issued undivided beneficial interests in the assets of the Trust.
(h) Under the Amended Declaration and the Delaware Statutory Trust
Act, the execution and delivery by the Trust of the Operative Documents to which
it is a party, and the performance by the Trust of its obligations thereunder,
have been duly authorized by the requisite trust action on the part of the
Trust.
D-1
(i) The issuance and sale by the Trust of the Capital Securities, the
execution, delivery and performance by the Trust of the Operative Documents to
which it is a party, the consummation by the Trust of the transactions
contemplated by such Operative Documents, and the compliance by the Trust with
its obligations thereunder are not prohibited by (i) the Amended Declaration or
the Certificate of Trust, or (ii) any law or administrative regulation of the
State of Delaware applicable to such Trust.
(j) No authorization, approval, consent or order of any Delaware court
or Delaware governmental authority or Delaware agency is required to be obtained
by the Trust solely in connection with the issuance and sale by the Trust of its
Capital Securities and the Common Securities, the due authorization, execution
and delivery by the Trust of the Operative Documents to which it is a party, or
the performance by the Trust of its obligations under such Operative Documents.
(k) The holders of Capital Securities (other than those holders of
Capital Securities 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.
D-2
ANNEX E
Pursuant to Section 5(d) of the Agreement, counsel to the Guarantee Trustee, the
Institutional Trustee, the Delaware Trustee and the Indenture Trustee shall
deliver an opinion in substantially the following form:
(a) Wilmington Trust Company ("WTC") is a Delaware banking corporation
with trust powers, duly incorporated, validly existing and in good standing
under the laws of the State of Delaware, with requisite corporate power and
authority to execute and deliver, and to perform its obligations under, the
Operative Documents to which it is a party.
(b) The execution, delivery, and performance by WTC of the Operative
Document to which it is a party have been duly authorized by all necessary
corporate action on the part of WTC, and the Operative Documents to which it is
a party have been duly executed and delivered by WTC.
(c) The execution, delivery and performance of the Operative Documents
to which it is a party by WTC and the consummation of any of the transactions by
WTC contemplated thereby are not prohibited by (i) the Charter or Bylaws of WTC,
(ii) any law or administrative regulation of the State of Delaware or the United
States of America governing the banking and trust powers of WTC, or (iii) to our
knowledge (based and relying solely on the Officer Certificates), any agreements
or instruments to which WTC is a party or by which WTC is bound or any judgments
or order applicable to WTC.
(d) The Debt Securities delivered on the date hereof have been
authenticated by due execution thereof and delivered by WTC, as Indenture
Trustee, in accordance with the Company Order. The Capital Securities delivered
on the date hereof have been authenticated by due execution thereof and
delivered by WTC, as Institutional Trustee, in accordance with the Trust Order.
(e) None of the execution, delivery and performance by WTC of the
Operative Documents to which it is a party and the consummation of any of the
transactions by WTC contemplated thereby requires the consent, authorization,
order or approval of, the withholding of objection on the part of, the giving of
notice to, the registration with or the taking of any other action in respect
of, any governmental authority or agency (including any court) under any law or
administrative regulation of the State of Delaware or the United States of
America governing the banking and trust powers of WTC, except for the filing of
the Certificate for the Trust in the Office of the Secretary of State of the
State of Delaware pursuant to the Delaware Statutory Trust Act 12 Del. C.
Section 3801, et seq. (which filing has been duly made).
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