Exhibit (10)(n)
CITY NATIONAL BANCSHARES CORPORATION
7,000 SHARES
MULTIMODE SERIES F NONCUMULATIVE REDEEMABLE PREFERRED STOCK
PURCHASE AGREEMENT
New York, New York
September 27, 2005
SANDLER O'NEILL & PARTNERS, L.P.
919 Third Avenue
6th Floor
New York, New York 10022
Ladies and Gentlemen:
City National Bancshares Corporation, a New Jersey corporation (the
"Company"), confirms its agreement (the "Agreement") with Sandler O'Neill &
Partners, L.P., as purchaser (the "Initial Purchaser"), with respect to the
issue and sale by the Company and the purchase by the Initial Purchaser of 7,000
shares (the "Shares") of MultiMode Series F Noncumulative Redeemable Preferred
Stock (liquidation preference of $1,000.00 per security) of the Company (the
"Preferred Stock").
The Shares will have such preferences, rights, voting powers,
restrictions, limitations as to dividends and other distributions,
qualifications and terms and conditions that are contained in a Certificate of
Amendment to the Company's charter (the "Certificate of Amendment"), a copy of
which is attached in Annex A hereto, that will be filed with the Department of
Treasury of the State of New Jersey prior to the Closing Date (as defined in
Section 2(a) hereof).
On the Closing Date, the Shares will be issued in book-entry only
form to Cede & Co. as nominee of The Depository Trust Company ("DTC") pursuant
to a Letter of Representations, dated the date hereof (the "DTC Agreement"),
among the Company, Wilmington Trust Company, as agent (the "Agent"), and DTC and
shall be designated as PORTAL securities in accordance with the rules and
regulations adopted by the National Association of Securities Dealers, Inc. (the
"NASD") relating to trading in the PORTAL market.
REPRESENTATIONS AND WARRANTIES.
THE COMPANY REPRESENTS AND WARRANTS TO THE INITIAL PURCHASER AND THE TRANSFEREES
(AS DEFINED IN SECTION 2(A) HEREOF), AS OF THE DATE HEREOF AND AS OF THE CLOSING
DATE, AND AGREES WITH THE INITIAL PURCHASER AND THE TRANSFEREES, AS FOLLOWS:
SIMILAR OFFERINGS. WITHIN A PERIOD OF SIX MONTHS BEFORE OR AFTER THE DATE
HEREOF, THE COMPANY HAS NOT, DIRECTLY OR INDIRECTLY, SOLICITED ANY OFFER TO BUY
OR OFFERED TO SELL, AND WILL NOT, DIRECTLY OR INDIRECTLY, SOLICIT ANY OFFER TO
BUY OR OFFER TO SELL, IN THE UNITED STATES OR TO ANY UNITED STATES CITIZEN OR
RESIDENT, ANY SECURITY WHICH IS OR WOULD BE INTEGRATED WITH THE SALE OF THE
SHARES (INCLUDING ANY SECURITIES OF THE SAME OR A SIMILAR CLASS AS THE SHARES)
IN A MANNER THAT WOULD REQUIRE THE SHARES TO BE REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "1933 ACT").
INCORPORATED DOCUMENTS. THE DOCUMENTS OF THE COMPANY FILED WITH THE SECURITIES
AND EXCHANGE COMMISSION (THE "COMMISSION") IN ACCORDANCE WITH THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED (THE "1934 ACT"), FROM AND INCLUDING THE
COMMENCEMENT OF THE FISCAL YEAR COVERED BY THE COMPANY'S MOST RECENT ANNUAL
REPORT ON FORM 10-K, AT THE TIME THEY WERE OR HEREAFTER ARE FILED BY THE COMPANY
WITH THE COMMISSION (COLLECTIVELY, THE "1934 ACT REPORTS"), COMPLIED AND WILL
COMPLY IN ALL MATERIAL RESPECTS WITH THE REQUIREMENTS OF THE 1934 ACT AND THE
RULES AND REGULATIONS OF THE COMMISSION THEREUNDER (THE "1934 ACT REGULATIONS"),
AND, AT THE DATE OF THIS AGREEMENT AND ON THE CLOSING DATE, DO NOT AND WILL NOT
INCLUDE AN UNTRUE STATEMENT OF A MATERIAL FACT OR OMIT TO STATE A MATERIAL FACT
REQUIRED TO BE STATED THEREIN OR NECESSARY TO MAKE THE STATEMENTS THEREIN, IN
THE LIGHT OF THE CIRCUMSTANCES UNDER WHICH THEY WERE MADE, NOT MISLEADING; AND
OTHER THAN SUCH INSTRUMENTS, AGREEMENTS, CONTRACTS AND OTHER DOCUMENTS AS ARE
FILED AS EXHIBITS TO THE COMPANY'S ANNUAL REPORT ON FORM 10-K, QUARTERLY REPORTS
ON FORM 10-Q OR CURRENT REPORTS ON FORM 8-K, THERE ARE NO INSTRUMENTS,
AGREEMENTS, CONTRACTS OR DOCUMENTS OF A CHARACTER DESCRIBED IN ITEM 601 OF
REGULATION S-K PROMULGATED BY THE COMMISSION TO WHICH THE COMPANY OR ANY OF ITS
SUBSIDIARIES IS A PARTY.
INDEPENDENT ACCOUNTANTS. THE ACCOUNTANTS OF THE COMPANY WHO CERTIFIED THE
FINANCIAL STATEMENTS INCLUDED IN THE 1934 ACT REPORTS (THE "INDEPENDENT
ACCOUNTANTS") ARE INDEPENDENT PUBLIC ACCOUNTANTS OF THE COMPANY AND ITS
SUBSIDIARIES WITHIN THE MEANING OF THE 1933 ACT AND THE RULES AND REGULATIONS OF
THE COMMISSION THEREUNDER (THE "1933 ACT REGULATIONS").
FINANCIAL STATEMENTS AND INFORMATION. THE CONSOLIDATED HISTORICAL FINANCIAL
STATEMENTS OF THE COMPANY, TOGETHER WITH THE RELATED SCHEDULES AND NOTES,
INCLUDED IN THE 1934 ACT REPORTS PRESENT FAIRLY, IN ALL MATERIAL RESPECTS, THE
RESPECTIVE CONSOLIDATED FINANCIAL POSITIONS OF THE COMPANY AND ITS CONSOLIDATED
SUBSIDIARIES AT THE RESPECTIVE DATES INDICATED, AND THE CONSOLIDATED STATEMENTS
OF INCOME, CHANGES IN STOCKHOLDERS' EQUITY AND CASH FLOWS OF THE COMPANY AND ITS
CONSOLIDATED SUBSIDIARIES FOR THE RESPECTIVE PERIODS SPECIFIED; SAID FINANCIAL
STATEMENTS HAVE BEEN PREPARED IN CONFORMITY WITH GENERALLY ACCEPTED ACCOUNTING
PRINCIPLES IN THE UNITED STATES APPLIED ON A CONSISTENT BASIS THROUGHOUT THE
PERIODS INVOLVED, EXCEPT AS DISCLOSED IN THE NOTES TO SUCH FINANCIAL STATEMENTS;
THE SUPPORTING SCHEDULES, IF ANY, INCLUDED IN THE 1934 ACT REPORTS PRESENT
FAIRLY, IN ALL MATERIAL RESPECTS, THE INFORMATION REQUIRED TO BE STATED THEREIN;
AND ANY PRO FORMA FINANCIAL STATEMENTS AND THE RELATED NOTES THERETO INCLUDED IN
THE 1934 ACT REPORTS PRESENT FAIRLY, IN ALL MATERIAL RESPECTS, THE INFORMATION
SHOWN THEREIN, HAVE BEEN PREPARED IN ACCORDANCE WITH THE COMMISSION'S RULES AND
GUIDELINES WITH RESPECT TO PRO FORMA FINANCIAL STATEMENTS AND HAVE BEEN PROPERLY
COMPILED ON THE BASES DESCRIBED THEREIN, AND THE ASSUMPTIONS USED IN THE
PREPARATION THEREOF ARE REASONABLE AND THE ADJUSTMENTS USED THEREIN ARE
APPROPRIATE TO GIVE EFFECT TO THE TRANSACTIONS AND CIRCUMSTANCES REFERRED TO
THEREIN.
NO MATERIAL ADVERSE CHANGE. SINCE THE RESPECTIVE DATES AS OF WHICH INFORMATION
IS GIVEN IN THE 1934 ACT REPORTS, THERE HAS NOT BEEN (A) ANY MATERIAL ADVERSE
CHANGE IN THE CONDITION, FINANCIAL, REGULATORY OR OTHERWISE, OR IN THE EARNINGS,
BUSINESS AFFAIRS OR BUSINESS PROSPECTS OF THE COMPANY AND ITS SUBSIDIARIES
CONSIDERED AS ONE ENTERPRISE, WHETHER OR NOT ARISING IN THE ORDINARY COURSE OF
BUSINESS (A "MATERIAL ADVERSE EFFECT") OR (B) ANY DIVIDEND OR DISTRIBUTION OF
ANY KIND DECLARED, PAID OR MADE BY THE COMPANY ON ANY CLASS OF ITS CAPITAL STOCK
OTHER THAN REGULAR QUARTERLY DIVIDENDS ON THE COMPANY'S COMMON STOCK DECLARED
AND PAID CONSISTENT WITH PAST PRACTICE.
INTERNAL ACCOUNTING CONTROLS. EACH OF THE COMPANY AND ITS SUBSIDIARIES MAINTAIN
A SYSTEM OF INTERNAL ACCOUNTING CONTROLS SUFFICIENT TO PROVIDE REASONABLE
ASSURANCE THAT (I) TRANSACTIONS ARE EXECUTED IN ACCORDANCE WITH THE 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 THE 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.
DISCLOSURE CONTROLS. THE COMPANY HAS ESTABLISHED AND MAINTAINS DISCLOSURE
CONTROLS AND PROCEDURES (AS SUCH TERM IS DEFINED IN RULE 13A-15(E) AND 15D-15(E)
UNDER THE 1934 ACT); SUCH DISCLOSURE CONTROLS AND PROCEDURES (I) ARE DESIGNED TO
ENSURE THAT MATERIAL INFORMATION RELATING TO THE COMPANY, INCLUDING ITS
CONSOLIDATED SUBSIDIARIES, IS MADE KNOWN TO THE COMPANY'S CHIEF EXECUTIVE
OFFICER AND ITS CHIEF FINANCIAL OFFICER BY OTHERS WITHIN THOSE ENTITIES,
PARTICULARLY DURING THE PERIODS IN WHICH THE 1934 ACT REPORTS ARE BEING
PREPARED, (II) HAVE BEEN EVALUATED FOR EFFECTIVENESS AS OF THE END OF THE ANNUAL
OR QUARTERLY PERIOD REPORTED TO THE COMMISSION AND (III) ARE EFFECTIVE TO
PERFORM THE FUNCTIONS FOR WHICH THEY WERE ESTABLISHED; THE COMPANY'S AUDITORS
AND THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS HAVE BEEN ADVISED OF: (A) ANY
SIGNIFICANT DEFICIENCIES IN THE DESIGN OR OPERATION OF INTERNAL CONTROLS WHICH
COULD ADVERSELY AFFECT THE COMPANY'S ABILITY TO RECORD, PROCESS, SUMMARIZE, AND
REPORT FINANCIAL DATA AND (B) ANY FRAUD, WHETHER OR NOT MATERIAL, THAT INVOLVES
MANAGEMENT OR OTHER EMPLOYEES WHO HAVE A ROLE IN THE COMPANY'S INTERNAL
CONTROLS; ANY MATERIAL WEAKNESSES IN INTERNAL CONTROLS HAVE BEEN IDENTIFIED FOR
THE COMPANY'S AUDITORS; AND SINCE THE DATE OF THE MOST RECENT EVALUATION OF SUCH
DISCLOSURE CONTROLS AND PROCEDURES, 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.
REGULATORY MATTERS. NEITHER THE COMPANY NOR ANY OF ITS SUBSIDIARIES IS SUBJECT
OR IS PARTY TO, OR HAS RECEIVED ANY NOTICE OR ADVICE THAT ANY OF THEM MAY BECOME
SUBJECT OR PARTY TO ANY INVESTIGATION WITH RESPECT TO, ANY CORRECTIVE,
SUSPENSION OR 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 CURRENTLY RELATES TO OR RESTRICTS IN
ANY MATERIAL RESPECT THE CONDUCT OF THEIR BUSINESS OR THAT IN ANY MANNER RELATES
TO THEIR CAPITAL ADEQUACY, CREDIT POLICIES, MANAGEMENT OR BUSINESS (EACH, A
"REGULATORY AGREEMENT"), NOR HAS THE COMPANY OR ANY OF ITS SUBSIDIARIES BEEN
ADVISED 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 EXAMINATIONS 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.
NO UNDISCLOSED LIABILITIES. NEITHER THE COMPANY NOR ANY OF ITS SUBSIDIARIES HAS
ANY MATERIAL LIABILITY, WHETHER KNOWN OR UNKNOWN, WHETHER ASSERTED OR
UNASSERTED, WHETHER ABSOLUTE OR CONTINGENT, WHETHER ACCRUED OR UNACCRUED,
WHETHER LIQUIDATED OR UNLIQUIDATED, AND WHETHER DUE OR TO BECOME DUE, INCLUDING
ANY LIABILITY FOR TAXES (AND THERE IS NO PAST OR PRESENT FACT, SITUATION,
CIRCUMSTANCE, CONDITION OR OTHER BASIS FOR ANY PRESENT OR FUTURE ACTION, SUIT,
PROCEEDING, HEARING, CHARGE, COMPLAINT, CLAIM OR DEMAND AGAINST THE COMPANY OR
ITS SUBSIDIARIES GIVING RISE TO ANY SUCH LIABILITY), EXCEPT (I) FOR LIABILITIES
SET FORTH IN THE FINANCIAL STATEMENTS REFERRED TO IN SECTION 1(A)(IV) ABOVE AND
(II) NORMAL FLUCTUATIONS IN THE AMOUNT OF THE LIABILITIES REFERRED TO IN CLAUSE
(I) ABOVE OCCURRING IN THE ORDINARY COURSE OF BUSINESS OF THE COMPANY AND ALL OF
ITS SUBSIDIARIES SINCE THE DATE OF THE MOST RECENT BALANCE SHEET INCLUDED IN
SUCH FINANCIAL STATEMENTS.
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 STATE OF NEW
JERSEY AND HAS FULL POWER AND AUTHORITY UNDER SUCH LAWS TO OWN, LEASE AND
OPERATE ITS PROPERTIES AND TO CONDUCT ITS BUSINESS, TO ENTER INTO AND PERFORM
ITS OBLIGATIONS UNDER THIS AGREEMENT, THE DTC AGREEMENT AND THE
CALCULATION AGREEMENT, DATED THE DATE HEREOF (THE "CALCULATION AGREEMENT"),
BETWEEN THE COMPANY AND WILMINGTON TRUST COMPANY, AS CALCULATION AGENT (THE
"CALCULATION AGENT"), AND TO ISSUE, SELL AND DELIVER THE SHARES TO AND THROUGH
THE INITIAL PURCHASER; AND THE COMPANY IS DULY REGISTERED AS A BANK HOLDING
COMPANY UNDER THE BANK HOLDING COMPANY ACT OF 1956, AS AMENDED.
GOOD STANDING OF THE SUBSIDIARIES. EACH "SIGNIFICANT SUBSIDIARY" (AS DEFINED IN
RULE 1-02 OF REGULATION S-X) OF THE COMPANY (A "SIGNIFICANT SUBSIDIARY") HAS
BEEN DULY ORGANIZED AND IS VALIDLY EXISTING AS AN ENTITY IN GOOD STANDING UNDER
THE LAWS OF THE JURISDICTION IN WHICH IT IS CHARTERED AND HAS FULL POWER AND
AUTHORITY UNDER SUCH LAWS TO OWN, LEASE AND OPERATE ITS PROPERTIES AND TO
CONDUCT ITS CURRENT AND CONTEMPLATED BUSINESS; AND THE DEPOSIT ACCOUNTS OF EACH
OF THE COMPANY'S SUBSIDIARY DEPOSITORY INSTITUTIONS ARE INSURED UP TO THE
APPLICABLE LIMITS BY THE BANK INSURANCE FUND OF THE FEDERAL DEPOSIT INSURANCE
CORPORATION (THE "FDIC") TO THE FULLEST EXTENT PERMITTED BY LAW AND THE RULES
AND REGULATIONS OF THE FDIC, AND NO PROCEEDING FOR THE REVOCATION OR TERMINATION
OF SUCH INSURANCE IS PENDING OR, TO THE KNOWLEDGE OF THE COMPANY, THREATENED.
FOREIGN QUALIFICATIONS. EACH OF THE COMPANY AND ITS SUBSIDIARIES IS DULY
QUALIFIED AS A FOREIGN ENTITY TO TRANSACT BUSINESS AND EACH 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 BE SO QUALIFIED WOULD NOT SINGULARLY, OR IN THE AGGREGATE, IN THE
REASONABLE JUDGMENT OF THE COMPANY, BE EXPECTED TO RESULT IN A MATERIAL ADVERSE
EFFECT.
CAPITAL STOCK DULY AUTHORIZED AND VALIDLY ISSUED. ALL OF THE ISSUED AND
OUTSTANDING CAPITAL STOCK OF THE COMPANY HAS BEEN DULY AUTHORIZED AND VALIDLY
ISSUED AND IS FULLY PAID AND NONASSESSABLE; ALL OF THE ISSUED AND OUTSTANDING
CAPITAL STOCK OF EACH SIGNIFICANT SUBSIDIARY OF THE COMPANY HAS BEEN DULY
AUTHORIZED AND VALIDLY ISSUED, IS FULLY PAID AND NONASSESSABLE AND IS OWNED BY
THE COMPANY, DIRECTLY OR THROUGH SUBSIDIARIES, FREE AND CLEAR OF ANY SECURITY
INTEREST, MORTGAGE, PLEDGE, LIEN, ENCUMBRANCE, CLAIM OR EQUITABLE RIGHT; AND
NONE OF THE ISSUED AND OUTSTANDING CAPITAL STOCK OF THE COMPANY OR ITS
SIGNIFICANT SUBSIDIARIES WAS ISSUED IN VIOLATION OF ANY PREEMPTIVE OR SIMILAR
RIGHTS ARISING BY OPERATION OF LAW, UNDER THE CHARTER, BY-LAWS OR OTHER
ORGANIZATIONAL DOCUMENT OF THE COMPANY OR ANY OF ITS SIGNIFICANT SUBSIDIARIES OR
UNDER ANY AGREEMENT TO WHICH THE COMPANY OR ANY OF ITS SIGNIFICANT SUBSIDIARIES
IS A PARTY.
AUTHORIZATION OF THIS AGREEMENT, THE DTC AGREEMENT AND THE CALCULATION
AGREEMENT. THIS AGREEMENT, THE DTC AGREEMENT AND THE CALCULATION AGREEMENT HAVE
EACH BEEN DULY AUTHORIZED, EXECUTED AND DELIVERED BY THE COMPANY AND, ASSUMING
DUE AUTHORIZATION, EXECUTION AND DELIVERY OF THIS AGREEMENT BY THE INITIAL
PURCHASER, THE DTC AGREEMENT BY THE AGENT AND DTC AND THE CALCULATION AGREEMENT
BY THE CALCULATION AGENT, AS THE CASE MAY BE, EACH CONSTITUTES A VALID, LEGAL
AND BINDING AGREEMENT OF THE COMPANY, ENFORCEABLE AGAINST THE COMPANY IN
ACCORDANCE WITH ITS TERMS, EXCEPT AS RIGHTS TO INDEMNITY AND CONTRIBUTION
HEREUNDER MAY BE LIMITED UNDER APPLICABLE LAW OR PUBLIC POLICY AND EXCEPT
FURTHER TO THE EXTENT THAT ENFORCEABILITY HEREOF 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").
AUTHORIZATION OF SHARES. THE SHARES HAVE BEEN DULY AUTHORIZED BY THE COMPANY FOR
ISSUANCE, SALE AND DELIVERY PURSUANT TO THIS AGREEMENT; THE SHARES, WHEN ISSUED
AND DELIVERED BY THE COMPANY PURSUANT TO THIS AGREEMENT AGAINST PAYMENT OF THE
CONSIDERATION THEREFOR, WILL BE VALIDLY ISSUED, FULLY PAID AND NON-ASSESSABLE
AND WILL NOT BE SUBJECT TO PREEMPTIVE OR OTHER SIMILAR RIGHTS OF ANY
SECURITYHOLDER OF THE COMPANY; NO HOLDER OF SHARES IS OR WILL BE SUBJECT TO
PERSONAL LIABILITY BY REASON OF BEING SUCH A HOLDER; AND ON THE CLOSING DATE,
THE CERTIFICATE OF AMENDMENT WILL BE IN FULL FORCE AND EFFECT.
NOT AN INVESTMENT COMPANY. THE COMPANY IS NOT, AND IMMEDIATELY FOLLOWING
CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT AND THE
APPLICATION OF THE NET PROCEEDS THEREFROM THE COMPANY WILL NOT BE, AN
"INVESTMENT COMPANY" OR AN ENTITY "CONTROLLED" BY AN "INVESTMENT COMPANY", IN
EACH CASE WITHIN THE MEANING OF THE INVESTMENT COMPANY ACT OF 1940, AS AMENDED
(THE "1940 ACT").
ABSENCE OF DEFAULTS AND CONFLICTS. NEITHER THE COMPANY NOR ANY OF ITS
SUBSIDIARIES IS IN VIOLATION OF ITS CHARTER, BY-LAWS OR OTHER ORGANIZATIONAL
DOCUMENT; NEITHER THE COMPANY NOR ANY OF ITS
SUBSIDIARIES IS IN DEFAULT IN THE PERFORMANCE OR OBSERVANCE OF ANY OBLIGATION,
AGREEMENT, COVENANT OR CONDITION CONTAINED IN ANY CONTRACT, 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 PROPERTIES OR ASSETS IS SUBJECT (COLLECTIVELY, "AGREEMENTS
AND INSTRUMENTS"), EXCEPT FOR SUCH DEFAULTS UNDER AGREEMENTS AND INSTRUMENTS
THAT, IN THE REASONABLE JUDGMENT OF THE COMPANY, ARE NOT EXPECTED TO RESULT IN A
MATERIAL ADVERSE EFFECT; AND THE EXECUTION, DELIVERY AND PERFORMANCE OF THIS
AGREEMENT, THE DTC AGREEMENT AND THE CALCULATION AGREEMENT BY THE COMPANY AND
THE CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT, INCLUDING
THE ISSUANCE, SALE AND DELIVERY OF THE SHARES TO AND THROUGH THE INITIAL
PURCHASER, HAVE BEEN DULY AUTHORIZED BY ALL NECESSARY 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, 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 PROPERTIES OR ASSETS OF THE
COMPANY OR ANY OF ITS SUBSIDIARIES PURSUANT TO ANY OF THE AGREEMENTS AND
INSTRUMENTS, NOR WILL SUCH ACTION RESULT IN ANY VIOLATION OF THE PROVISIONS OF
THE CHARTER, BY-LAWS OR OTHER ORGANIZATIONAL DOCUMENT OF THE COMPANY OR ANY OF
ITS SUBSIDIARIES, OR VIOLATION BY THE COMPANY OR ANY OF ITS SUBSIDIARIES OF ANY
APPLICABLE LAW, STATUTE, RULE, REGULATION, JUDGMENT, ORDER, WRIT OR DECREE OF
ANY GOVERNMENT, GOVERNMENT AUTHORITY, AGENCY (INCLUDING, WITHOUT LIMITATION,
EACH APPLICABLE REGULATORY AGENCY) OR INSTRUMENTALITY OR COURT, DOMESTIC OR
FOREIGN, HAVING JURISDICTION OVER THE COMPANY OR ANY OF ITS SUBSIDIARIES OR
THEIR RESPECTIVE PROPERTIES OR ASSETS (COLLECTIVELY, "GOVERNMENTAL ENTITIES").
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 COMPANY OR ANY OF
ITS SUBSIDIARIES PRIOR TO ITS SCHEDULED MATURITY.
ABSENCE OF LABOR DISPUTE. NO LABOR DISPUTE WITH THE EMPLOYEES OF THE COMPANY OR
ANY OF ITS SUBSIDIARIES EXISTS OR, TO THE KNOWLEDGE OF THE EXECUTIVE OFFICERS OF
THE COMPANY, IS IMMINENT, WHICH, IN THE REASONABLE JUDGMENT OF THE COMPANY, IN
EITHER CASE, IS EXPECTED TO RESULT IN A MATERIAL ADVERSE EFFECT.
ABSENCE OF PROCEEDINGS. THERE IS NO ACTION, SUIT, PROCEEDING, INQUIRY OR
INVESTIGATION BEFORE OR BROUGHT BY ANY GOVERNMENTAL ENTITY, NOW PENDING, OR, TO
THE KNOWLEDGE OF THE COMPANY, THREATENED, AGAINST OR AFFECTING THE COMPANY OR
ANY OF ITS SUBSIDIARIES, WHICH, IN THE REASONABLE JUDGMENT OF THE COMPANY IS
EXPECTED TO RESULT IN A MATERIAL ADVERSE EFFECT OR MATERIALLY AND ADVERSELY
AFFECT THE CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT,
INCLUDING THE ISSUANCE, SALE AND DELIVERY OF THE SHARES TO AND THROUGH THE
INITIAL PURCHASER, OR THE PERFORMANCE BY THE COMPANY OF ITS OBLIGATIONS
HEREUNDER; AND THE AGGREGATE OF ALL PENDING LEGAL OR GOVERNMENTAL PROCEEDINGS TO
WHICH THE COMPANY OR ANY OF ITS SUBSIDIARIES IS A PARTY OR OF WHICH ANY OF THEIR
RESPECTIVE PROPERTIES OR ASSETS IS THE SUBJECT, INCLUDING ORDINARY ROUTINE
LITIGATION INCIDENTAL TO THE BUSINESS, ARE NOT, IN THE REASONABLE JUDGMENT OF
THE COMPANY, EXPECTED TO RESULT IN A MATERIAL ADVERSE EFFECT.
ABSENCE OF FURTHER REQUIREMENTS. NO FILING WITH, OR AUTHORIZATION, APPROVAL,
CONSENT, LICENSE, ORDER, REGISTRATION, QUALIFICATION OR DECREE OF, OR NOTICE TO,
ANY GOVERNMENTAL ENTITY, OTHER THAN THOSE THAT HAVE BEEN MADE OR OBTAINED, IS
NECESSARY OR REQUIRED FOR THE AUTHORIZATION, EXECUTION OR DELIVERY OF, OR THE
PERFORMANCE BY THE COMPANY OF ITS OBLIGATIONS UNDER, THIS AGREEMENT, THE DTC
AGREEMENT OR THE CALCULATION AGREEMENT, OR THE CONSUMMATION BY THE COMPANY OF
THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT, INCLUDING THE ISSUANCE, SALE
AND DELIVERY OF THE SHARES TO AND THROUGH THE INITIAL PURCHASER.
POSSESSION OF LICENSES AND PERMITS. THE COMPANY AND ITS SUBSIDIARIES POSSESS
SUCH PERMITS, ORDERS, CERTIFICATES, LICENSES, APPROVALS, CONSENTS AND OTHER
AUTHORIZATIONS (COLLECTIVELY, "GOVERNMENTAL LICENSES") ISSUED BY THE APPROPRIATE
GOVERNMENTAL ENTITIES NECESSARY TO CONDUCT THE BUSINESS NOW OPERATED BY THEM
THAT IS MATERIAL TO THE COMPANY AND ITS SUBSIDIARIES CONSIDERED AS ONE
ENTERPRISE; THE COMPANY AND ITS SUBSIDIARIES ARE IN COMPLIANCE WITH THE TERMS
AND CONDITIONS OF ALL OF THEIR GOVERNMENTAL LICENSES, EXCEPT WHERE THE FAILURE
SO TO COMPLY, IN THE REASONABLE JUDGMENT OF THE COMPANY, IS NOT EXPECTED TO,
SINGULARLY 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, IN THE REASONABLE JUDGMENT OF THE
COMPANY, IS NOT EXPECTED TO HAVE A MATERIAL ADVERSE EFFECT; AND NEITHER THE
COMPANY NOR ANY OF ITS SUBSIDIARIES HAS RECEIVED NOTICE OF ANY PROCEEDING, AND
TO THE KNOWLEDGE OF THE COMPANY OR ANY OF ITS SUBSIDIARIES, THERE HAS BEEN NO
THREATENED PROCEEDING, RELATING TO THE REVOCATION, TERMINATION, SUSPENSION OR
MODIFICATION OF ANY SUCH GOVERNMENTAL LICENSES WHICH, SINGULARLY OR IN THE
AGGREGATE, IN THE REASONABLE JUDGMENT OF THE COMPANY, IS EXPECTED TO RESULT IN A
MATERIAL ADVERSE EFFECT.
TITLE TO PROPERTY. THE COMPANY AND ITS SUBSIDIARIES HAVE GOOD AND MARKETABLE
TITLE TO ALL OF THEIR RESPECTIVE REAL AND PERSONAL PROPERTIES, IN EACH CASE FREE
AND CLEAR OF ALL LIENS, ENCUMBRANCES AND DEFECTS, EXCEPT SUCH AS, IN THE
REASONABLE JUDGMENT OF THE COMPANY, SINGULARLY OR IN THE AGGREGATE, ARE NOT
EXPECTED TO RESULT IN A MATERIAL ADVERSE EFFECT; AND ALL OF THE LEASES AND
SUBLEASES UNDER WHICH THE COMPANY OR ANY OF ITS SUBSIDIARIES HOLDS PROPERTIES
ARE IN FULL FORCE AND EFFECT, EXCEPT WHEN THE FAILURE OF SUCH LEASES AND
SUBLEASES TO BE IN FULL FORCE AND EFFECT, IN THE REASONABLE JUDGMENT OF THE
COMPANY, SINGULARLY OR IN THE AGGREGATE, IS NOT EXPECTED TO HAVE A MATERIAL
ADVERSE EFFECT, AND NEITHER THE COMPANY NOR ANY OF ITS SUBSIDIARIES HAS ANY
NOTICE OF ANY CLAIM OF ANY SORT THAT HAS BEEN ASSERTED BY ANYONE ADVERSE TO THE
RIGHTS OF THE COMPANY OR ANY OF ITS SUBSIDIARIES UNDER ANY OF THE LEASES OR
SUBLEASES UNDER WHICH THE COMPANY OR ANY OF ITS SUBSIDIARIES HOLDS PROPERTIES,
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 WHEN SUCH CLAIM, IN THE REASONABLE JUDGMENT OF THE COMPANY, SINGULARLY OR
IN THE AGGREGATE, IS NOT EXPECTED TO HAVE A MATERIAL ADVERSE EFFECT.
(i) STABILIZATION. THE COMPANY HAS NOT TAKEN AND WILL NOT TAKE,
DIRECTLY OR INDIRECTLY, ANY ACTION DESIGNED TO, OR THAT MIGHT BE REASONABLY
EXPECTED TO, CAUSE OR RESULT IN STABILIZATION OR MANIPULATION OF THE PRICE OF
THE SHARES.
NO GENERAL SOLICITATION. NEITHER THE COMPANY NOR ANY OF ITS AFFILIATES (AS
DEFINED IN RULE 501(B) UNDER THE 1933 ACT, AN "AFFILIATE") OR ANY PERSON ACTING
ON ITS OR ANY OF THEIR BEHALF (OTHER THAN THE INITIAL PURCHASER, AS TO WHOM THE
COMPANY MAKES NO REPRESENTATION) HAS ENGAGED OR WILL ENGAGE, IN CONNECTION WITH
THE OFFER AND SALE OF THE SHARES, IN ANY FORM OF GENERAL SOLICITATION OR GENERAL
ADVERTISING WITHIN THE MEANING OF RULE 502(C) UNDER THE 1933 ACT.
NO DIRECTED SELLING EFFORTS. NEITHER THE COMPANY NOR ANY OF ITS AFFILIATES OR
ANY PERSON ACTING ON ITS OR ANY OF THEIR BEHALF (OTHER THAN THE INITIAL
PURCHASER, AS TO WHOM THE COMPANY MAKES NO REPRESENTATION) HAS ENGAGED OR WILL
ENGAGE IN ANY DIRECTED SELLING EFFORTS WITHIN THE MEANING OF REGULATION S UNDER
THE 1933 ACT ("REGULATION S") WITH RESPECT TO THE OFFER AND SALE OF THE SHARES.
NO REGISTRATION. SUBJECT TO COMPLIANCE BY THE INITIAL PURCHASER WITH THE
RELEVANT PROVISIONS OF SECTION 6 HEREOF, IT IS NOT NECESSARY IN CONNECTION WITH
THE OFFER, SALE AND DELIVERY OF THE SHARES BY THE COMPANY TO THE INITIAL
PURCHASER AND BY THE INITIAL PURCHASER TO ITS TRANSFEREES (AS DEFINED IN SECTION
2(A) HEREOF) IN THE MANNER CONTEMPLATED BY THIS AGREEMENT TO REGISTER THE SHARES
UNDER THE 1933 ACT.
ANY CERTIFICATE SIGNED BY ANY DULY AUTHORIZED OFFICER OF THE COMPANY OR ANY OF
ITS SUBSIDIARIES AND DELIVERED TO THE INITIAL PURCHASER OR ANY TRANSFEREE OR
COUNSEL FOR THE INITIAL PURCHASER OR ANY TRANSFEREE SHALL BE DEEMED A
REPRESENTATION AND WARRANTY BY THE COMPANY TO THE INITIAL PURCHASER AND THE
TRANSFEREES AS TO THE MATTERS COVERED THEREBY.
PURCHASE AND SALE; CLOSING.
THE COMPANY HEREBY AGREES TO ISSUE AND SELL 7,000 SHARES ON SEPTEMBER 29, 2005
(OR SUCH OTHER DATE MUTUALLY AGREED TO BY THE COMPANY AND THE INITIAL PURCHASER)
(THE "CLOSING DATE") TO THE INITIAL PURCHASER AND, SUBJECT TO THE TERMS AND
CONDITIONS SPECIFIED IN THIS AGREEMENT, THE INITIAL PURCHASER HEREBY AGREES TO
PURCHASE 7,000 SHARES FROM THE COMPANY ON THE CLOSING DATE, FOR A PURCHASE PRICE
EQUAL TO THE PERCENTAGE OF THEIR AGGREGATE LIQUIDATION PREFERENCE SPECIFIED IN
ANNEX B HERETO. IN ADDITION, THE COMPANY ACKNOWLEDGES AND AGREES THAT THE
INITIAL PURCHASER INTENDS TO, AND IS AUTHORIZED AND PERMITTED TO, TRANSFER THE
SHARES TO ONE OR MORE OTHER PERSONS OR ENTITIES IN ACCORDANCE WITH SECTION 6 OF
THIS AGREEMENT (EACH, A "TRANSFEREE") AND THAT EACH TRANSFEREE SHALL BE ENTITLED
TO THE BENEFIT OF, AND TO RELY ON, THE PROVISIONS OF THIS AGREEMENT AS IF IT
WERE A PARTY TO THIS AGREEMENT.
ON THE CLOSING DATE, THE SHARES SHALL BE REPRESENTED BY A SINGLE GLOBAL
CERTIFICATE PURSUANT TO THE DTC AGREEMENT THAT IS REGISTERED IN THE NAME OF CEDE
& CO., AS NOMINEE OF DTC, UNLESS THE INITIAL PURCHASER SHALL NOTIFY THE COMPANY
IN WRITING OTHERWISE AT LEAST TWO DAYS PRIOR TO THE CLOSING
DATE. DELIVERY OF THE GLOBAL CERTIFICATE(S) REPRESENTING THE SHARES SHALL BE
MADE BY THE COMPANY TO OR ON BEHALF OF THE INITIAL PURCHASER AT THE OFFICES OF
SIDLEY AUSTIN BROWN & WOOD LLP, 787 SEVENTH AVENUE, NEW YORK, NEW YORK 10019,
AND PAYMENT OF THE PURCHASE PRICE FOR THE SHARES SHALL BE MADE BY THE INITIAL
PURCHASER TO THE COMPANY BY WIRE TRANSFER OF IMMEDIATELY AVAILABLE FUNDS TO A
BANK PREVIOUSLY DESIGNATED BY THE COMPANY CONTEMPORANEOUS WITH CLOSING ON THE
CLOSING DATE.
NOTICE OF MATERIAL EVENTS. The Company covenants with the Initial
Purchaser that, prior to the completion of initial resales of
the Shares purchased, or to be purchased, by the Initial
Purchaser hereunder, the Company will immediately notify the
Initial Purchaser, and confirm such notice in writing, of any
event or development that, in the reasonable judgment of the
Company, is expected to result in a Material Adverse Effect.
PAYMENT OF EXPENSES. Whether or not this Agreement is terminated or
the sale of the Shares to and through the Initial Purchaser is
consummated, the Company will pay all expenses incident to the
performance of its obligations under this Agreement, including
(i) the preparation, issuance and delivery of the certificates
for the Shares, (ii) the fees and disbursements of the
Company's counsel, accountants and other advisors and (iii)
the fees and disbursements of the Agent, the Calculation Agent
and any registrar for the Shares, as well as the expenses and
listing fees incurred in connection with the clearance,
settlement and trading of the Shares through DTC and the
initial and continued designation of the Shares as PORTAL
securities in accordance with the NASD's rules and regulations
relating to trading in the PORTAL market and any stock
transfer or other taxes or any stamp or other duties payable
in connection with the sale of Shares to and through the
Initial Purchaser.
CONDITIONS OF INITIAL PURCHASER'S OBLIGATIONS. The obligations of the
Initial Purchaser on the Closing Date are subject to the
accuracy of the representations and warranties of the Company
contained in Section 1 hereof or in certificates of any
officer of the Company or any of its subsidiaries delivered
pursuant to the provisions hereof, to the performance by the
Company of its obligations hereunder, and to the following
further conditions:
OPINION OF COUNSEL FOR THE COMPANY. ON THE CLOSING DATE, THE INITIAL PURCHASER
AND THE TRANSFEREES, IF ANY, IDENTIFIED BY THE INITIAL PURCHASER ON OR PRIOR TO
THE CLOSING DATE SHALL HAVE RECEIVED THE FAVORABLE OPINION, DATED THE CLOSING
DATE, OF ST. JOHN & WAYNE, L.L.C., SPECIAL COUNSEL FOR THE COMPANY, IN
SUBSTANTIALLY THE FORM SET OUT IN ANNEX C HERETO, IN FORM AND SUBSTANCE
REASONABLY SATISFACTORY TO THE INITIAL PURCHASER AND SUCH TRANSFEREES. SUCH
COUNSEL MAY STATE THAT, INSOFAR AS SUCH OPINION INVOLVES FACTUAL MATTERS, THEY
HAVE RELIED, TO THE EXTENT THEY DEEM PROPER, UPON CERTIFICATES OF OFFICERS OF
THE COMPANY OR ANY OF ITS SUBSIDIARIES AND PUBLIC OFFICIALS.
CERTIFICATE. ON THE CLOSING DATE, THERE SHALL NOT HAVE BEEN, SINCE THE DATE
HEREOF OR SINCE THE RESPECTIVE DATES AS OF WHICH INFORMATION IS GIVEN IN THE
1934 ACT REPORTS, ANY MATERIAL ADVERSE EFFECT, AND THE INITIAL PURCHASER AND THE
TRANSFEREES, IF ANY, IDENTIFIED BY THE INITIAL PURCHASER ON OR PRIOR TO THE
CLOSING DATE SHALL HAVE RECEIVED A CERTIFICATE OF THE CHAIRMAN, THE CHIEF
EXECUTIVE OFFICER, THE PRESIDENT, ANY EXECUTIVE VICE PRESIDENT OR ANY VICE
PRESIDENT OF THE COMPANY AND OF THE CHIEF FINANCIAL OFFICER OR CHIEF ACCOUNTING
OFFICER OF THE COMPANY, DATED THE CLOSING DATE, 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 ON AND AS OF THE CLOSING
DATE, AND (III) THE
COMPANY HAS COMPLIED WITH ALL AGREEMENTS AND SATISFIED ALL CONDITIONS ON ITS
PART TO BE PERFORMED OR SATISFIED ON OR PRIOR TO THE CLOSING DATE. MAINTENANCE
OF RATINGS. FROM THE DATE OF THIS AGREEMENT THROUGH THE CLOSING DATE, THERE
SHALL NOT HAVE OCCURRED A DOWNGRADING IN OR WITHDRAWAL OF ANY RATING ASSIGNED TO
ANY DEBT SECURITIES OR PREFERRED STOCK OF THE COMPANY OR ANY OF ITS SUBSIDIARIES
BY ANY "NATIONALLY RECOGNIZED STATISTICAL RATING ORGANIZATION," AS THAT TERM IS
DEFINED BY THE COMMISSION FOR THE PURPOSES OF RULE 436(G)(2) UNDER THE 1933 ACT,
AND NO SUCH ORGANIZATION SHALL HAVE PUBLICLY ANNOUNCED THAT IT HAS UNDER
SURVEILLANCE OR REVIEW ITS RATING, IF ANY, OF ANY DEBT SECURITIES OR PREFERRED
STOCK OF THE COMPANY OR ANY OF ITS SUBSIDIARIES.
INITIAL PURCHASER'S RESALES OF SHARES. THE INITIAL PURCHASER SHALL HAVE ENTERED
INTO AGREEMENTS WITH TRANSFEREES FOR THE RESALE OF 7,000 SHARES AND ON OR PRIOR
TO THE CLOSING DATE SHALL NOT HAVE BEEN NOTIFIED BY ANY TRANSFEREE OF ITS
DETERMINATION NOT TO PURCHASE ALL OF THE SHARES THAT IT THERETOFORE AGREED TO
PURCHASE FROM THE INITIAL PURCHASER.
(b) ADDITIONAL DOCUMENTS. ON THE CLOSING DATE, (I) THE CERTIFICATE
OF AMENDMENT WILL BE IN FULL FORCE AND EFFECT, (II) THE COMPANY, DTC AND THE
AGENT SHALL HAVE EXECUTED THE DTC AGREEMENT RELATING TO THE SHARES AND THE
SHARES SHALL BE ELIGIBLE FOR CLEARANCE, SETTLEMENT AND TRADING THROUGH DTC AND
DESIGNATED AS PORTAL SECURITIES IN ACCORDANCE WITH THE NASD'S RULES AND
REGULATIONS RELATING TO TRADING IN THE PORTAL MARKET, (III) THE COMPANY AND THE
CALCULATION AGENT SHALL HAVE EXECUTED THE CALCULATION AGREEMENT, (IV) THE
INITIAL PURCHASER AND THE TRANSFEREES, IF ANY, IDENTIFIED BY THE INITIAL
PURCHASER ON OR PRIOR TO THE CLOSING DATE SHALL HAVE BEEN FURNISHED SUCH
DOCUMENTS AND OPINIONS AS THEY MAY REASONABLY REQUEST IN CONNECTION WITH THE
ISSUANCE, SALE AND DELIVERY OF THE SHARES AND (V) ALL PROCEEDINGS TAKEN BY THE
COMPANY IN CONNECTION WITH THE ISSUANCE, SALE AND DELIVERY OF THE SHARES SHALL
BE SATISFACTORY IN FORM AND SUBSTANCE TO THE INITIAL PURCHASER AND SUCH
TRANSFEREES.
(c) 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 INITIAL PURCHASER BY NOTICE TO THE COMPANY AT
ANY TIME ON OR PRIOR TO THE CLOSING DATE. IF THE SALE OF THE SHARES TO THE
INITIAL PURCHASER IS NOT CONSUMMATED BECAUSE ANY CONDITION SET FORTH IN SECTION
5(A), (B), (C) OR (E) IS NOT SATISFIED, BECAUSE OF ANY TERMINATION PURSUANT TO
SECTION 10(A) HEREOF OR BECAUSE OF ANY REFUSAL, INABILITY OR FAILURE ON THE PART
OF THE COMPANY TO PERFORM ANY AGREEMENT HEREIN OR COMPLY WITH ANY PROVISION
HEREOF, THE COMPANY WILL REIMBURSE THE INITIAL PURCHASER UPON DEMAND FOR ALL
DOCUMENTED OUT-OF-POCKET EXPENSES (INCLUDING REASONABLE FEES AND DISBURSEMENTS
OF COUNSEL) THAT SHALL HAVE BEEN INCURRED BY THE INITIAL PURCHASER IN CONNECTION
WITH THE PROPOSED SALE. IN ADDITION, SUCH TERMINATION SHALL BE SUBJECT TO
SECTION 4 HEREOF, AND SECTIONS 7 AND 8 HEREOF SHALL SURVIVE ANY SUCH TERMINATION
AND REMAIN IN FULL FORCE AND EFFECT.
OFFERS AND SALES OF THE SHARES.
OFFER AND SALE PROCEDURES. THE INITIAL PURCHASER AND THE COMPANY HEREBY
ESTABLISH AND AGREE TO OBSERVE THE FOLLOWING PROVISIONS WITH RESPECT TO THE
OFFER, ISSUE, SALE, RESALE AND TRANSFER OF THE SHARES:
REPRESENTATION OF THE INITIAL PURCHASER. THE INITIAL PURCHASER REPRESENTS AND
WARRANTS THAT IT IS AN "ACCREDITED INVESTOR" WITHIN THE MEANING OF RULE
501(A)(1), (2), (3), (7), OR (8) UNDER THE 1933 ACT.
OFFERS AND SALES BY THE INITIAL PURCHASER. OFFERS AND SALES OF THE SHARES WILL
BE MADE BY THE INITIAL PURCHASER TO ANY TRANSFEREE ONLY IN A TRANSACTION NOT
REQUIRING REGISTRATION UNDER THE 1933 ACT.
NO GENERAL SOLICITATION. NO GENERAL SOLICITATION OR GENERAL ADVERTISING (WITHIN
THE MEANING OF RULE 502(C) UNDER THE 1933 ACT) HAS BEEN OR WILL BE USED IN
CONNECTION WITH THE OFFER AND SALE OF THE SHARES.
NO DIRECTED SELLING EFFORTS. NO DIRECTED SELLING EFFORTS (WITHIN THE MEANING OF
REGULATION S) HAVE BEEN OR WILL BE USED WITH RESPECT TO THE OFFER AND SALE OF
THE SHARES.
TRANSFEREE NOTIFICATION. PRIOR TO OR CONTEMPORANEOUSLY WITH THE PURCHASE OF THE
SHARES BY ANY TRANSFEREE, THE INITIAL PURCHASER WILL TAKE REASONABLE STEPS TO
INFORM SUCH TRANSFEREE THAT THE SHARES (A) HAVE NOT BEEN AND WILL NOT BE
REGISTERED UNDER THE 1933 ACT, (B) ARE BEING SOLD TO SUCH TRANSFEREE WITHOUT
REGISTRATION UNDER THE 1933 ACT IN ACCORDANCE WITH AN EXEMPTION FROM, OR IN A
TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE 1933 ACT AND
(C) MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED EXCEPT IN ACCORDANCE WITH
THE LEGEND SET FORTH IN ANNEX D HERETO.
COVENANTS OF THE COMPANY. THE COMPANY COVENANTS WITH THE INITIAL PURCHASER AS
FOLLOWS:
DUE DILIGENCE. IN CONNECTION WITH INITIAL RESALES OF THE SHARES PURCHASED, OR TO
BE PURCHASED, BY THE INITIAL PURCHASER HEREUNDER, THE COMPANY AGREES THAT THE
INITIAL PURCHASER AND THE TRANSFEREES SHALL HAVE THE RIGHT TO MAKE REASONABLE
INQUIRIES INTO THE BUSINESS OF THE COMPANY AND THE SUBSIDIARIES OF THE COMPANY.
THE COMPANY ALSO AGREES TO PROVIDE ANSWERS TO THE INITIAL PURCHASER AND THE
TRANSFEREES, IF REQUESTED, CONCERNING THE COMPANY AND THE SUBSIDIARIES OF THE
COMPANY (TO THE EXTENT THAT SUCH INFORMATION IS AVAILABLE OR CAN BE ACQUIRED AND
MADE AVAILABLE WITHOUT UNREASONABLE EFFORT OR EXPENSE AND TO THE EXTENT THE
PROVISION THEREOF IS NOT PROHIBITED BY APPLICABLE LAW) AND THE TERMS AND
CONDITIONS OF THE OFFERING AND SALE OF THE SHARES.
INTEGRATION. THE COMPANY AGREES THAT IT WILL NOT, AND WILL CAUSE ITS AFFILIATES
NOT TO, MAKE ANY OFFER OR SALE OF SECURITIES OF ANY CLASS IF, AS A RESULT OF THE
DOCTRINE OF "INTEGRATION" REFERRED TO IN RULE 502 UNDER THE 1933 ACT, SUCH OFFER
OR SALE WOULD RENDER INVALID THE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF
THE 1933 ACT PROVIDED BY SECTION 4(2) THEREOF OR BY RULE 144A OR OTHERWISE.
RESTRICTION ON REPURCHASES. UNTIL THE EXPIRATION OF TWO (2) YEARS (OR SUCH
SHORTER PERIOD AS MAY HEREAFTER BE REFERRED TO IN RULE 144(K) (OR SIMILAR
SUCCESSOR RULE)) AFTER THE ORIGINAL ISSUANCE OF THE SHARES, THE COMPANY WILL
NOT, AND WILL CAUSE ITS AFFILIATES NOT TO, PURCHASE OR AGREE TO PURCHASE OR
OTHERWISE ACQUIRE ANY SHARES WHICH ARE "RESTRICTED SECURITIES" (AS SUCH TERM IS
DEFINED UNDER RULE 144(A)(3) UNDER THE 1933 ACT), WHETHER AS BENEFICIAL OWNER OR
OTHERWISE, UNLESS, IMMEDIATELY UPON ANY SUCH PURCHASE, THE COMPANY SHALL CANCEL
SUCH SHARES.
RULE 144A(D)(4) INFORMATION. THE COMPANY AGREES THAT IT WILL MAKE AVAILABLE,
UPON REQUEST, TO ANY HOLDER OR BENEFICIAL OWNER OF SHARES OR PROSPECTIVE
ACQUIRORS OF SHARES THE INFORMATION SPECIFIED IN RULE 144A(D)(4) UNDER THE 1933
ACT UNLESS SUCH INFORMATION IS FURNISHED TO THE COMMISSION PURSUANT TO SECTION
13 OR 15(D) OF THE 1934 ACT.
INDEMNIFICATION.
INDEMNIFICATION OF THE INITIAL PURCHASER. THE COMPANY AGREES TO INDEMNIFY AND
HOLD HARMLESS: (X) THE INITIAL PURCHASER, (Y) EACH PERSON, IF ANY, WHO CONTROLS
(WITHIN THE MEANING OF SECTION 15 OF THE 1933 ACT OR SECTION 20 OF THE 1934 ACT)
THE INITIAL PURCHASER (EACH SUCH PERSON, A "CONTROLLING PERSON") AND (Z) THE
RESPECTIVE PARTNERS, DIRECTORS, OFFICERS, EMPLOYEES AND AGENTS OF THE INITIAL
PURCHASER OR ANY SUCH CONTROLLING PERSON, AS FOLLOWS:
AGAINST ANY AND ALL LOSS, LIABILITY, CLAIM, DAMAGE AND EXPENSE WHATSOEVER, AS
INCURRED, RELATING TO OR ARISING OUT OF, OR BASED UPON, IN WHOLE OR IN PART, (A)
ANY UNTRUE STATEMENT OR ALLEGED UNTRUE STATEMENT OF A MATERIAL FACT INCLUDED IN
THE 1934 ACT REPORTS, 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; (B) ANY UNTRUE
STATEMENT OR ALLEGED UNTRUE STATEMENT OF MATERIAL FACT CONTAINED IN ANY
INFORMATION (WHETHER WRITTEN OR ORAL) OR DOCUMENTS EXECUTED IN FAVOR OF OR
FURNISHED OR MADE AVAILABLE TO THE INITIAL PURCHASER BY THE COMPANY; (C) ANY
OMISSION OR ALLEGED OMISSION TO STATE IN ANY INFORMATION (WHETHER WRITTEN OR
ORAL) OR DOCUMENTS EXECUTED IN FAVOR OF OR FURNISHED OR MADE AVAILABLE TO THE
INITIAL PURCHASER BY THE COMPANY A MATERIAL FACT NECESSARY TO MAKE THE
STATEMENTS THEREIN NOT MISLEADING; OR (D) THE BREACH OR ALLEGED BREACH OF ANY
REPRESENTATION, WARRANTY AND AGREEMENT OF THE COMPANY CONTAINED HEREIN; 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, OR BREACH OR ALLEGED
BREACH OF ANY SUCH REPRESENTATION, WARRANTY OR AGREEMENT; PROVIDED, THAT
(SUBJECT TO SECTION 7(C) HEREOF) ANY SUCH SETTLEMENT IS EFFECTED WITH THE
WRITTEN CONSENT OF THE COMPANY; AND AGAINST ANY AND ALL EXPENSE WHATSOEVER, AS
INCURRED (INCLUDING THE FEES AND DISBURSEMENTS OF COUNSEL CHOSEN BY THE INITIAL
PURCHASER), 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,
OR BREACH OR ALLEGED BREACH OF ANY SUCH REPRESENTATION, WARRANTY OR AGREEMENT,
TO THE EXTENT THAT ANY SUCH EXPENSE IS NOT PAID UNDER (I) OR (II) ABOVE.
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. COUNSEL
TO THE INDEMNIFIED PARTIES SHALL BE SELECTED BY THE INITIAL PURCHASER. AN
INDEMNIFYING PARTY MAY PARTICIPATE AT ITS OWN EXPENSE IN THE DEFENSE OF ANY SUCH
ACTION; PROVIDED, HOWEVER, THAT COUNSEL TO THE INDEMNIFYING PARTY SHALL NOT
(EXCEPT WITH THE CONSENT OF THE INDEMNIFIED PARTY) ALSO BE COUNSEL TO THE
INDEMNIFIED PARTY. IN NO EVENT SHALL THE INDEMNIFYING PARTIES BE LIABLE FOR FEES
AND EXPENSES OF MORE THAN ONE COUNSEL (IN ADDITION TO ANY LOCAL COUNSEL)
SEPARATE FROM THEIR OWN COUNSEL FOR ALL INDEMNIFIED PARTIES IN CONNECTION WITH
ANY ONE ACTION OR SEPARATE BUT SIMILAR OR RELATED ACTIONS IN THE SAME
JURISDICTION ARISING OUT OF THE SAME GENERAL ALLEGATIONS OR CIRCUMSTANCES. 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 7 OR SECTION 8 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. 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 7(A)(II) 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 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, PROVIDED,
HOWEVER, THAT AN INDEMNIFYING PARTY SHALL NOT BE LIABLE FOR ANY SUCH SETTLEMENT
EFFECTED WITHOUT ITS CONSENT IF SUCH INDEMNIFYING PARTY (1) REIMBURSES SUCH
INDEMNIFIED PARTY WITH RESPECT TO THOSE FEES AND EXPENSES OF COUNSEL THAT IT
DETERMINES IN GOOD FAITH ARE REASONABLE AND (2) PROVIDES WRITTEN NOTICE WITHIN
10 DAYS AFTER RECEIPT OF THE REQUEST FOR REIMBURSEMENT TO THE INDEMNIFIED PARTY
SUBSTANTIATING THE UNPAID BALANCE AS UNREASONABLE, IN EACH CASE PRIOR TO THE
DATE OF SUCH SETTLEMENT.
CONTRIBUTION. In order to provide for just and equitable contribution
in circumstances under which the indemnification provided for
in Section 7 hereof is for any reason held to be unenforceable
for the benefit of an indemnified party in respect of any
losses, liabilities, claims, damages or expenses referred to
therein, then each indemnifying party shall contribute to the
aggregate amount of such losses, liabilities, claims, damages
and expenses incurred by such indemnified party, as incurred,
(i) in such proportion as is appropriate to reflect the
relative benefits received by the Company, on the one hand,
and the Initial Purchaser, on the other hand, from the offer
and sale of the Shares 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 Company, on the
one hand, and the Initial Purchaser, on the other hand, in
connection with the statements, omissions or breaches which
resulted in such losses, liabilities, claims, damages or
expenses, as well as any other
relevant equitable considerations.
The relative benefits received by the Company, on the one
hand, and the Initial Purchaser, on the other hand, in connection with the offer
and sale of the Shares pursuant to this Agreement shall be deemed to be in the
same respective proportions as the total net proceeds from the sale of the
Shares pursuant to this Agreement (before deducting expenses) received by the
Company and the total commission received by the Initial Purchaser, if any, bear
to the aggregate of such net proceeds and commissions.
The Company and the Initial Purchaser agree that it would not
be just and equitable if contribution pursuant to this Section 8 were determined
by pro rata or per capita allocation or by any other method of allocation which
does not take account of the equitable considerations referred to above in this
Section 8. The aggregate amount of losses, liabilities, claims, damages and
expenses incurred by an indemnified party and referred to above in this Section
8 shall be deemed to include any legal or other expenses reasonably incurred by
such indemnified party in investigating, preparing or defending against any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever based upon any such
untrue or alleged untrue statement, omission or alleged omission or breach or
alleged breach.
Notwithstanding the provisions of this Section 8, the Initial
Purchaser shall not be required to contribute any amount in excess of the total
commissions received by it from the Company.
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 8, each person, if any, who
controls the Initial Purchaser 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 the Initial Purchaser or any such controlling person
shall have the same rights to contribution as the Initial Purchaser, while each
officer and director of the Company and each person, if any, who controls the
Company within the meaning of Section 15 of the 1933 Act or Section 20 of the
1934 Act shall have the same rights to contribution as the Company.
REPRESENTATIONS, WARRANTIES AND AGREEMENTS TO SURVIVE DELIVERY. All
representations, warranties and agreements contained in this
Agreement or in certificates of officers of the Company
submitted pursuant hereto shall remain operative and in full
force and effect, and shall survive delivery of the Shares by
the Company.
TERMINATION OF AGREEMENT.
TERMINATION; GENERAL. THE INITIAL PURCHASER MAY TERMINATE THIS AGREEMENT, BY
NOTICE TO THE COMPANY, AT ANY TIME ON OR PRIOR TO THE CLOSING DATE IF, SINCE THE
TIME OF EXECUTION OF THIS AGREEMENT OR, IN THE CASE OF (I) BELOW, SINCE THE
RESPECTIVE DATES AS OF WHICH INFORMATION IS GIVEN IN THE 1934 ACT REPORTS, (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 POLITICAL, FINANCIAL OR ECONOMIC
CONDITIONS, IN EACH CASE THE EFFECT OF WHICH IS SUCH AS TO
MAKE IT, IN THE JUDGMENT OF THE INITIAL PURCHASER, IMPRACTICABLE TO MARKET THE
SHARES OR TO ENFORCE CONTRACTS FOR THE SALE OF THE SHARES, OR (III) TRADING IN
ANY SECURITIES OF THE COMPANY OR ANY OF ITS SUBSIDIARIES HAS BEEN SUSPENDED OR
LIMITED BY THE COMMISSION OR ANY NATIONAL STOCK EXCHANGE OR MARKET ON OR IN
WHICH SUCH SECURITIES ARE TRADED OR QUOTED, 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 NATIONAL
ASSOCIATION OF SECURITIES DEALERS OR ANY OTHER GOVERNMENTAL AUTHORITY, OR (IV) A
BANKING MORATORIUM HAS BEEN DECLARED BY UNITED STATES FEDERAL OR NEW JERSEY OR
NEW YORK STATE AUTHORITIES OR (V) THERE HAS OCCURRED A MATERIAL DISRUPTION IN
COMMERCIAL BANKING OR SECURITIES SETTLEMENT OR CLEARANCE SERVICES IN THE UNITED
STATES. 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 AND SECTION 5 HEREOF, AND PROVIDED FURTHER THAT
SECTIONS 1, 7 AND 8 HEREOF SHALL SURVIVE SUCH TERMINATION AND REMAIN IN FULL
FORCE AND EFFECT.
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 Initial Purchaser
shall be directed to Sandler O'Neill & Partners, L.P.,
as follows: 919 Third Avenue, 6th Floor, New York, New
York 10022, Attention: Thomas W. Killian, Principal,
with a copy to Sidley Austin Brown & Wood LLP, 787
Seventh Avenue, New York, New York 10019, Attention:
Edward F. Petrosky; and notices to the Company shall be
directed to City National Bancshares Corporation, 900
Broad Street, Newark, New Jersey 07102, Attention:
Edward R. Wright, with a copy to St. John & Wayne,
L.L.C., Two Penn Plaza East, 10th Floor, Newark, New
Jersey 07105-2249, Attention: Lee A. Albanese, Esq.
PARTIES. This Agreement shall inure to the benefit of and be
binding upon each of the Initial Purchaser and the
Company and their respective successors and nothing
expressed or mentioned in this Agreement is intended or
shall be construed to give any person, firm or
corporation, other than the Initial Purchaser and the
Company, and their respective successors and the
controlling persons and other persons referred to in
Sections 1, 7 and 8 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; provided, however, that the
parties hereto acknowledge that each Transferee is an
intended "third party beneficiary" of this Agreement as
set forth in Section 2(a) hereof. Subject to the
previous sentence, this Agreement and all conditions and
provisions hereof are intended to be for the sole and
exclusive benefit of the Initial Purchaser and the
Company 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.
GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK,
WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES OF SAID
STATE OTHER THAN SECTION 5-1401 OF THE NEW YORK GENERAL
OBLIGATIONS LAW.
THE COMPANY 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.
THE COMPANY 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.
EFFECT OF HEADINGS. The Section headings herein are for convenience only and
shall not affect the construction hereof.
If the foregoing is in accordance with your understanding of
our agreement, please sign and return to the Company a counterpart hereof,
whereupon this instrument, along with all counterparts, will become a binding
agreement between the Initial Purchaser and the Company in accordance with its
terms.
Very truly yours,
CITY NATIONAL BANCSHARES CORPORATION
By: /S/ EDWARD R. WRIGHT/S/
-----------------------
Name: Edward R. Wright
Title: Senior Vice President & Chief
Financial Officer
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/ROBERT A. KLEINERT/S/
------------------------
Robert A. Kleinert
An Officer of the Corporation
ANNEX A
[Certificate of Amendment]
ANNEX B
The purchase price for the 7,000 Shares sold hereby is $970.00 (or 97%) of the
liquidation preference per Share.
ANNEX C
Pursuant to Section 5(a) of the Purchase Agreement, special counsel for the
Company shall deliver an opinion in substantially the following form:
(i) The Company has been duly organized and is validly existing as a
corporation in good standing under the laws of the State of New Jersey.
(ii) The Company has corporate power and authority to (i) execute
and deliver, and to perform its obligations under, the Purchase Agreement, the
DTC Agreement and the Calculation Agreement and (ii) issue, sell and deliver the
Shares to and through the Initial Purchaser.
(iii) The Company is registered as a bank holding company under the
Bank Holding Company Act of 1956, as amended.
(iv) (i) Each Significant Subsidiary is validly existing and in good
standing under the laws of the jurisdiction of its organization; and (ii) all of
the issued and outstanding shares of capital stock of each Significant
Subsidiary are owned of record by the Company, directly or through other
subsidiaries.
(v) The deposit accounts of each of the Company's subsidiary
depository institutions are insured by the Federal Deposit Insurance Corporation
up to the maximum amount allowable under applicable law and, to the best of our
knowledge, no proceeding for the termination of such insurance is pending or
threatened.
(vi) Each of the Company and its subsidiaries (i) is duly qualified
to do business as a foreign corporation and is in good standing under the laws
of each jurisdiction which requires such qualification wherein it owns or leases
properties or conducts business and (ii) holds all approvals, authorizations,
orders, licenses, certificates and permits from governmental authorities
necessary for the conduct of its business, except where the failure to be so
qualified or to hold such approvals, authorizations, orders, licenses,
certificates and/or permits would not, singularly or in the aggregate, have a
Material Adverse Effect.
(vii) No consent, approval, authorization or order of, or filing,
registration or qualification with, or notice to, any Governmental Entity is
required under any law or regulation of the United States or the states in which
the Company or the Company's subsidiary depository institutions are organized in
connection with the authorization, execution or delivery of, or the performance
by the Company of its obligations under, the Purchase Agreement, the DTC
Agreement or the Calculation Agreement or the consummation of the transactions
contemplated thereby, including the issuance, sale and delivery of the Shares to
and through the Initial Purchaser, except as have already been obtained or made.
(viii) The Purchase Agreement, the DTC Agreement and the Calculation
Agreement have each been duly authorized, executed and delivered by the Company
and, assuming due authorization, execution and delivery of the Purchase
Agreement by the Initial Purchaser, the DTC Agreement by the Agent and DTC and
the Calculation Agreement by the Calculation Agent, as the case may be, each
constitutes a valid, legal and binding agreement of the Company, enforceable
against the Company in accordance with its terms, except as rights to
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indemnity and contribution thereunder may be limited under applicable law or
public policy, and except further to the extent that enforceability thereof may
be limited by the Enforceability Exceptions.
(ix) The Shares have been duly authorized by the Company for
issuance, sale and delivery pursuant to the Purchase Agreement. The Shares, when
issued and delivered by the Company pursuant to the Purchase Agreement against
payment of the consideration therefor specified in such Purchase Agreement, will
be validly issued, fully paid and non-assessable and will not be subject to
preemptive or other similar rights of any securityholder of the Company. No
holder of Shares is or will be subject to personal liability by reason of being
such a holder. The form of certificate used to evidence the Shares is due and
proper form and complies with the applicable statutory requirements and with any
applicable requirements of the charter or by-laws of the Company. The
Certificate of Amendment has been properly filed in the Department of Treasury
of the State of New Jersey.
(x) The execution, delivery and performance of the Purchase
Agreement, the DTC Agreement and the Calculation Agreement by the Company and
the consummation by the Company of the transactions contemplated by the Purchase
Agreement, including the issuance, sale and delivery of the Shares to and
through the Initial Purchaser, will not result in any violation of the charter,
bylaws or other organizational document of the Company or any of its
subsidiaries, the terms of any indenture or other agreement or instrument known
to such counsel to which the Company or any of its subsidiaries is a party or
bound or any judgment, order or decree of any Governmental Entity having
jurisdiction over the Company or any of its subsidiaries, or any law or
administrative regulation of any state applicable to the Company or any of the
subsidiaries.
(xi) Assuming (i) the accuracy of the representations and warranties
contained in Section 1(a)(i), (xxiv) and (xxv) and Section 6(a)(i), (iii) and
(iv) of the Purchase Agreement, and compliance with the agreements contained in
Section 6(a)(ii), (iii), (iv) and (v) and Section 6(b)(ii) of the Purchase
Agreement and (ii) that the Shares are sold in the manner contemplated by, and
in accordance with, the Purchase Agreement, it is not necessary in connection
with the offer, sale and delivery of the Shares by the Company to the Initial
Purchaser and by the Initial Purchaser to its Transferees to register the Shares
under the 1933 Act.
(xii) The Company is not, and immediately following the consummation
of the transactions contemplated by the Purchase Agreement and the application
of the net proceeds therefrom the Company will not be, an "investment company"
or entity "controlled" by an "investment company", in each case within the
meaning of the 1940 Act.
In rendering such opinions, such counsel may (A) state that its opinion is
limited to the laws of the State of New York, the laws of the State of New
Jersey and the Federal laws of the United States and (B) rely as to matters
involving the application of laws of any jurisdiction other than the State of
New York, the State of New Jersey or the United States, to the extent deemed
proper and specified in such opinion, upon the opinion of other counsel of good
standing believed to be reliable and who are satisfactory to you and, as to
matters of fact, to the extent deemed proper, on certificates of responsible
officers of the Company and public officials.
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ANNEX D
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC") TO THE COMPANY
OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME
AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE
TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS OR ANY
OTHER APPLICABLE SECURITIES LAWS. NEITHER THIS SECURITY NOR ANY INTEREST OR
PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED,
ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR
UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT. THE HOLDER OF THIS SECURITY OR ANY INTEREST
OR PARTICIPATION HEREIN, BY ITS ACCEPTANCE HEREOF OR THEREOF, AS THE CASE MAY
BE, HEREIN AGREES TO OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY OR ANY
INTEREST OR PARTICIPATION HEREIN PRIOR TO THE DATE (THE "RESALE RESTRICTION
TERMINATION DATE") WHICH IS THE LATER OF (i) TWO YEARS (OR SUCH SHORTER PERIOD
OF TIME AS PERMITTED BY RULE 144(k) UNDER THE SECURITIES ACT) AFTER THE LATER OF
(Y) THE DATE OF ORIGINAL ISSUANCE HEREOF AND (Z) THE LAST DATE ON WHICH THE
COMPANY OR ANY AFFILIATE (AS DEFINED IN RULE 405 UNDER THE SECURITIES ACT) OF
THE COMPANY WAS THE HOLDER OF THIS SECURITY OR SUCH INTEREST OR PARTICIPATION
(OR ANY PREDECESSOR THERETO) AND (ii) SUCH LATER DATE, IF ANY, AS MAY BE
REQUIRED BY ANY SUBSEQUENT CHANGE IN APPLICABLE LAW, ONLY (A) TO THE COMPANY,
(B) PURSUANT TO RULE 144A UNDER THE SECURITIES ACT ("RULE 144A"), TO A PERSON
THE HOLDER REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER," AS DEFINED
IN RULE 144A, THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A
QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING
MADE IN RELIANCE ON RULE 144A, (C) PURSUANT TO AN EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT TO AN "ACCREDITED INVESTOR"
WITHIN THE MEANING OF SUBPARAGRAPH (a) (1), (2), (3), (7) OR (8) OF RULE 501
UNDER THE SECURITIES ACT THAT IS ACQUIRING THIS SECURITY OR SUCH INTEREST OR
PARTICIPATION FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF SUCH AN ACCREDITED
INVESTOR, FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO, OR FOR OFFER OR SALE
IN CONNECTION WITH, ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, (D)
PURSUANT TO OFFERS AND SALES TO NON-U.S. PERSONS THAT OCCUR
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OUTSIDE THE UNITED STATES PURSUANT TO REGULATION S UNDER THE SECURITIES ACT OR
(E) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS
OF THE SECURITIES ACT, SUBJECT TO THE COMPANY'S RIGHT PRIOR TO ANY SUCH OFFER,
SALE OR TRANSFER PURSUANT TO CLAUSE (C) OR (E) ABOVE TO REQUIRE THE DELIVERY OF
AN OPINION OF COUNSEL, CERTIFICATIONS AND/OR OTHER INFORMATION REASONABLY
SATISFACTORY TO IT. PRIOR TO THE RESALE RESTRICTION TERMINATION DATE, THE HOLDER
OF THIS SECURITY OR ANY INTEREST OR PARTICIPATION HEREIN, BY ITS ACCEPTANCE
HEREOF OR THEREOF, AS THE CASE MAY BE, AGREES THAT IT WILL COMPLY WITH THE
FOREGOING RESTRICTIONS. THE HOLDER OF THIS SECURITY OR ANY INTEREST OR
PARTICIPATION HEREIN, BY ITS ACCEPTANCE HEREOF OR THEREOF, AS THE CASE MAY BE,
FURTHER AGREES THAT IT WILL NOT, DIRECTLY OR INDIRECTLY, ENGAGE IN ANY HEDGING
TRANSACTIONS WITH REGARD HERETO OR THERETO EXCEPT AS PERMITTED BY THE SECURITIES
ACT.
THE HOLDER OF THIS SECURITY OR ANY INTEREST OR PARTICIPATION HEREIN,
BY ITS ACCEPTANCE HEREOF OR THEREOF, AS THE CASE MAY BE, ALSO AGREES, REPRESENTS
AND WARRANTS THAT IT IS NOT AN EMPLOYEE BENEFIT PLAN, INDIVIDUAL RETIREMENT
ACCOUNT OR OTHER PLAN OR ARRANGEMENT SUBJECT TO TITLE I OF THE EMPLOYEE
RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR SECTION 4975 OF
THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE") (EACH A "PLAN"), OR
AN ENTITY WHOSE UNDERLYING ASSETS INCLUDE "PLAN ASSETS" BY REASON OF ANY PLAN'S
INVESTMENT IN THE ENTITY, AND NO PERSON INVESTING "PLAN ASSETS" OF ANY PLAN MAY
ACQUIRE OR HOLD THIS SECURITY OR ANY INTEREST OR PARTICIPATION HEREIN, UNLESS
SUCH PURCHASER OR HOLDER IS ELIGIBLE FOR THE EXEMPTIVE RELIEF AVAILABLE UNDER
U.S. DEPARTMENT OF LABOR PROHIBITED TRANSACTION CLASS EXEMPTION 96-23, 95-60,
91-38, 90-1 OR 84-14 OR ANOTHER APPLICABLE EXEMPTION OR ITS PURCHASE AND HOLDING
OF THIS SECURITY OR SUCH INTEREST OR PARTICIPATION IS NOT PROHIBITED BY SECTION
406 OF ERISA OR SECTION 4975 OF THE CODE WITH RESPECT TO SUCH PURCHASE OR
HOLDING. ANY PURCHASER OR HOLDER OF THIS SECURITY OR ANY INTEREST OR
PARTICIPATION HEREIN WILL BE DEEMED TO HAVE REPRESENTED BY ITS PURCHASE AND
HOLDING HEREOF OR THEREOF, AS THE CASE MAY BE, THAT EITHER (i) IT IS NOT AN
EMPLOYEE BENEFIT PLAN WITHIN THE MEANING OF SECTION 3(3) OF ERISA, OR A PLAN TO
WHICH SECTION 4975 OF THE CODE IS APPLICABLE, A TRUSTEE OR OTHER PERSON ACTING
ON BEHALF OF AN EMPLOYEE BENEFIT PLAN OR PLAN, OR ANY OTHER PERSON OR ENTITY
USING THE ASSETS OF ANY EMPLOYEE BENEFIT PLAN OR PLAN TO FINANCE SUCH PURCHASE,
OR (ii) SUCH PURCHASE AND HOLDING WILL NOT RESULT IN A PROHIBITED TRANSACTION
UNDER SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE FOR WHICH THERE IS NO
APPLICABLE STATUTORY OR ADMINISTRATIVE EXEMPTION.
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PRIOR TO THE RESALE RESTRICTION TERMINATION DATE, THIS SECURITY WILL
BE ISSUED AND MAY BE TRANSFERRED ONLY IN LOTS OF AT LEAST 100 SECURITIES. ANY
ATTEMPTED TRANSFER OF THIS SECURITY IN A LOT OF LESS THAN 100 SECURITIES PRIOR
TO THE RESALE RESTRICTION TERMINATION DATE SHALL BE DEEMED TO BE VOID AND OF NO
LEGAL EFFECT WHATSOEVER. ANY SUCH PURPORTED TRANSFEREE SHALL BE DEEMED NOT TO BE
THE HOLDER OF THIS SECURITY OR ANY INTEREST OR PARTICIPATION HEREIN FOR ANY
PURPOSE, INCLUDING, BUT NOT LIMITED TO, THE RECEIPT OF DIVIDENDS, AND SUCH
PURPORTED TRANSFEREE SHALL BE DEEMED TO HAVE NO INTEREST WHATSOEVER IN THIS
SECURITY OR ANY INTEREST OR PARTICIPATION HEREIN.
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