1
Exhibit 1
$100,000,000
PROVIDENT CAPITAL TRUST I
8.60% CAPITAL SECURITIES
PURCHASE AGREEMENT
November 22, 1996
LEHMAN BROTHERS INC.,
for itself and
Donaldson Lufkin & Jenrette Securities Corporation,
Keefe Bruyette & Woods, Inc. and
McDonald & Company Securities, Inc.,
Three World Financial Center
New York, New York 10285
Ladies and Gentlemen:
Provident Capital Trust I, a Delaware statutory business trust (the
"Trust"), proposes to sell to you (collectively, the "Initial Purchasers")
$100,000,000 8.60% Capital Securities (liquidation amount $1000 per Capital
Security) (the "Capital Securities"), guaranteed (the "Guarantee"; together with
the Capital Securities, the "Securities") by the Company (as defined herein) to
the extent set forth in the Guarantee Agreement (the "Guarantee Agreement") to
be entered into between the Company and The Bank of New York, as Guarantee
Trustee (the "Guarantee Trustee"). Provident Bancorp, Inc., an Ohio corporation
(the "Company"), will be the owner of all of the beneficial ownership interests
represented by common securities (the "Common Securities") of the Trust.
Concurrently with the issuance of the Securities and the Company's purchase of
all of the beneficial interests represented by common securities of the Trust
(the "Common Securities"), the Trust will invest the proceeds of each thereof in
the Company's 8.60% Junior Subordinated Debentures (the "Junior Subordinated
Debentures"). The Junior Subordinated Debentures are to be issued pursuant to an
Indenture (the "Indenture") to be entered into between the Company and The Bank
of New York, as Indenture Trustee (the "Indenture Trustee").
The Securities will be offered without being registered under the
Securities Act of 1933, as amended (the "Securities Act"), in reliance on
exemptions therefrom.
In connection with the sale of the Securities, the Trust and the
Company will prepare a final offering memorandum (the "Memorandum") setting
forth or including a description of the terms of the Securities, the terms of
the offering, a description of the Company and the Trust and any material
developments relating to the Company occurring after the date of the most recent
financial statements included therein.
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1. Representations, Warranties and Agreements of the Company
and the Trust. The Company and the Trust, jointly and severally, represent and
warrant to, and agree with each of the Initial Purchasers that as of the date
hereof:
(a) The Memorandum will not contain any untrue
statement of a material fact or omit to state a material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading,
except that the representations and warranties set forth in
this Section 1(a) do not apply to statements or omissions in
the Memorandum based upon information furnished to the Company
or the Trust in writing by or on behalf of any Initial
Purchaser through you expressly for use therein. Reference
herein to the Memorandum shall be deemed to refer to and
include any document filed by the Company under the Securities
Exchange Act of 1934, as amended (the "Exchange Act") which is
incorporated in the Memorandum by reference.
(b) It is not required by applicable law or
regulation in connection with the offer, sale and delivery of
the Securities to you in the manner contemplated by this
Agreement to register the Securities or the Junior
Subordinated Debentures under the Securities Act or to qualify
the Declaration (as defined herein), the Guarantee Agreement
or the Indenture in respect of the Securities or the Junior
Subordinated Debentures under the Trust Indenture Act of 1939,
as amended (the "Trust Indenture Act").
(c) The Company and each of its subsidiaries (as
defined in Section 14) have been duly incorporated and are
validly existing as corporations in good standing under the
laws of their respective jurisdictions of incorporation, are
duly qualified to do business and are in good standing as
foreign corporations in each jurisdiction in which their
respective ownership or lease of property or the conduct of
their respective businesses requires such qualification, save
where the failure to be so qualified could not reasonably be
expected to have a material adverse effect on their businesses
or properties, and have all power and authority necessary to
own or hold their respective properties and to conduct the
businesses in which they are engaged.
(d) The Company has an authorized capitalization as
set forth, or incorporated by reference, in the Memorandum,
and all of the issued shares of capital stock of the Company
have been duly and validly authorized and issued, are fully
paid and non-assessable and conform to the description thereof
contained, or incorporated by reference, in the Memorandum;
and all of the issued shares of capital stock of each
subsidiary of the Company have been duly and validly
authorized and issued and are fully paid and non-assessable
and are owned directly or indirectly by the Company (save for
West Shell Mortgage Company where the Company holds a 50%
general partnership interest), free and clear of all liens,
encumbrances, equities or claims.
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(e) The Trust has been duly created and is validly
existing as a statutory business trust in good standing under
the Business Trust Act of the State of Delaware (the "Delaware
Business Trust Act") with the trust power and authority to own
property and conduct its business as described in the
Memorandum, and has conducted and will conduct no business
other than the transactions contemplated by this Agreement as
described in the Memorandum; the Trust is not a party to or
bound by any agreement or instrument other than this
Agreement, the Registration Rights Agreement (the
"Registration Rights Agreement") to be entered into among the
Company, the Trust and the Initial Purchasers, the Amended and
Restated Declaration of Trust (the "Declaration") among the
Company, as sponsor, Allen L. Davis, John R. Farrenkopf and
Mark E. Magee, The Bank of New York and The Bank of New York
(Delaware) (the "Trustees"), and the agreements and
instruments contemplated by the Declaration and described in
the Memorandum; the Trust has no liabilities or obligations
other than those arising out of the transactions contemplated
by this Agreement and the Declaration and described in the
Memorandum; and the Trust is not a party to or subject to any
action, suit or proceeding of any nature.
(f) The Declaration has been duly authorized and,
when duly executed and delivered by the Company, as Sponsor,
and the Trustees, and assuming due authorization, execution
and delivery of the Declaration by the Property Trustee and
the Delaware Trustee, the Declaration will be a valid and
binding obligation of the Company, enforceable against the
Company in accordance with its terms, subject to the effects
of bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws relating to
or affecting creditors' rights generally, general equitable
principles (whether considered in a proceeding in equity or at
law) and an implied covenant of good faith and fair dealing,
and will conform to all statements relating thereto in the
Memorandum.
(g) All of the outstanding beneficial interests in
the Trust have been, and the Capital Securities and the Common
Securities, upon issuance and delivery and payment therefor in
the manner described herein, will be, duly authorized, validly
issued, fully paid and non-assessable and will conform to the
descriptions of the Capital Securities and the Common
Securities contained in the Memorandum.
(h) Each of the Indenture and the Guarantee Agreement
has been duly authorized and, when duly executed and delivered
by the proper officers of the Company (assuming, in the case
of the Indenture, due execution and delivery by the Indenture
Trustee and, in the case of the Guarantee Agreement, due
execution and delivery by the Guarantee Trustee) and delivered
by the Company, will each constitute a valid and legally
binding agreement of the Company enforceable against the
Company in accordance with its terms, subject to the effects
of bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws relating to
or affecting creditors' rights generally, general
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equitable principles (whether considered in a proceeding in
equity or at law) and an implied covenant of good faith and
fair dealing; and the Junior Subordinated Debentures and the
Guarantee have been duly authorized, and, when duly executed,
authenticated, issued and delivered as provided in the
Indenture and the Guarantee Agreement, respectively, and
delivered against payment of the purchase price therefor as
provided in this Agreement, will be duly and validly issued
and outstanding, and will constitute valid and legally binding
obligations of the Company entitled to the benefits of the
Indenture and the Guarantee Agreement, respectively, and
enforceable against the Company in accordance with their
terms, subject to the effects of bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other
similar laws relating to or affecting creditors' rights
generally, general equitable principles (whether considered in
a proceeding in equity or at law) and an implied covenant of
good faith and fair dealing; and the Junior Subordinated
Debentures and the Guarantee, when issued and delivered, will
conform to the descriptions thereof contained in the
Memorandum.
(i) This Agreement has been duly authorized, executed
and delivered by each of the Trust and the Company and the
Registration Rights Agreement has been duly authorized and
will be duly delivered and executed by each of the Trust and
the Company.
(j) The execution, delivery and performance of this
Agreement, the Declaration, the Registration Rights Agreement,
the Common Securities and the Capital Securities by the Trust,
the purchase of the Junior Subordinated Debentures by the
Trust from the Company, the distribution of the Junior
Subordinated Debentures upon the liquidation of the Trust in
the circumstances contemplated by the Declaration and
described in the Memorandum, and the consummation of the
transactions contemplated herein and in the Declaration (the
"Trust Transactions"), will not conflict with or result in a
violation of any statute or order, rule or regulation of any
court or governmental agency or body having jurisdiction over
the Trust or any of its assets; and except for such consents,
approvals, authorizations, registrations or qualifications as
may be required under applicable state securities laws in
connection with the purchase and distribution of the Capital
Securities by the Initial Purchasers, no consent, approval,
authorization or order of or filing or registration with, any
such court or governmental agency or body is required for the
Trust Transactions.
(k) The execution, delivery and performance of this
Agreement, the Guarantee Agreement, the Registration Rights
Agreement, the Indenture and the Junior Subordinated
Debentures by the Company, the purchase of the Common
Securities by the Company from the Trust, and the consummation
by the Company of the transactions herein (the "Company
Transactions") will not conflict with or result in a breach or
violation of any of the terms or provisions of, or
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constitute a default under, any indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument to
which the Company or any of its subsidiaries is a party or by
which the Company or any of its subsidiaries is bound or to
which any of the properties or assets of the Company or any of
its subsidiaries is subject, nor will such actions result in
any violation of the provisions of the charter or by-laws of
the Company or any of its subsidiaries or any statute or
order, rule or regulation of any court or governmental agency
or body having jurisdiction over the Company, any of its
subsidiaries or any of their properties or assets; and except
for such consents, approvals, authorizations, registrations or
qualifications as may be required under applicable state
securities laws in connection with the purchase and
distribution of the Capital Securities by the Initial
Purchasers, no consent, approval, authorization or order of,
or filing or registration with, any such court or governmental
agency or body is required for the Company Transactions.
(l) Neither the Company nor any of its subsidiaries
has sustained, since the date of the latest quarterly
financial statements included in the Memorandum, any material
loss or interference with its business from fire, explosion,
flood or other calamity, whether or not covered by insurance,
or from any labor dispute or court or governmental action,
order or decree, otherwise than as set forth or contemplated
in the Memorandum; and, since such date, there has not been
any change in the capital stock or long-term debt of the
Company or any of its subsidiaries or any material adverse
change, or any development involving a prospective material
adverse change, in or affecting the general affairs,
management, financial position, stockholders' equity or
results of operations of the Company and its subsidiaries,
otherwise than as set forth or contemplated in the Memorandum.
(m) The financial statements (including the related
notes and supporting schedules) incorporated in the Memorandum
present fairly the financial condition and results of
operations of the entities purported to be shown thereby, at
the dates and for the periods indicated, and have been
prepared in conformity with generally accepted accounting
principles applied on a consistent basis throughout the
periods involved.
(n) Ernst & Young, LLP, who have certified certain
financial statements of the Company, whose report is
incorporated by reference in the Memorandum and who have
delivered the initial letter referred to in Section hereof,
are independent public accountants as required by the
Securities Act and the Rules and Regulations during the
periods covered by the financial statements on which they
reported contained in the Memorandum.
(o) There are no legal or governmental proceedings
pending to which the Company or any of its subsidiaries is a
party or of which any property or asset of
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the Company or any of its subsidiaries is the subject which,
if determined adversely to the Company or any of its
subsidiaries, might have a material adverse effect on the
consolidated financial position, stockholders' equity, results
of operations, business or prospects of the Company and its
subsidiaries; and to the best of the Company's knowledge, no
such proceedings are threatened or contemplated by
governmental authorities or threatened by others.
(p) No relationship, direct or indirect, exists
between or among the Company and the Trust on the one hand,
and the directors, officers, stockholders, customers or
suppliers of the Company on the other hand, which is required
to be described in the Memorandum which is not so described.
(q) Since the date as of which information is given
in the Memorandum through the date hereof, and except as may
otherwise be disclosed in the Memorandum, neither the Company
nor the Trust has (i) issued or granted any securities, (ii)
incurred any liability or obligation, direct or contingent,
other than liabilities and obligations which were incurred in
the ordinary course of business, (iii) entered into any
transaction not in the ordinary course of business or (iv) in
the case of the Company, declared or paid any dividend on its
capital stock, other than its regular quarterly dividend, paid
on November 22, 1996, in respect of its common and preferred
stock.
(r) Neither the Company nor any of its subsidiaries
(i) is in violation of its charter or by-laws, (ii) is in
default in any material respect, and no event has occurred
which, with notice or lapse of time or both, would constitute
such a default, in the due performance or observance of any
term, covenant or condition contained in any material
indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument to which it is a party or by which it
is bound or to which any of its properties or assets is
subject or (iii) is in violation in any material respect of
any law, ordinance, governmental rule, regulation or court
decree to which it or its properties or assets may be subject
or has failed to obtain any material license, permit,
certificate, franchise or other governmental authorization or
permit necessary to the ownership of its properties or assets
or to the conduct of its business.
(s) There has been no storage, disposal, generation,
manufacture, refinement, transportation, handling or treatment
of toxic wastes, medical wastes, hazardous wastes or hazardous
substances by the Company or any of its subsidiaries (or, to
the knowledge of the Company, any of their predecessors in
interest) at, upon or from any of the properties now or
previously owned or leased by the Company or its subsidiaries
in violation of any applicable law, ordinance, rule,
regulation, order, judgment, decree or permit or which would
require remedial action under any applicable law, ordinance,
rule, regulation, order, judgment, decree or permit, except
for any violation or remedial action which
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would not have, or could not be reasonably likely to have,
singularly or in the aggregate with all such violations and
remedial actions, a material adverse effect on the general
affairs, management, financial position, stockholders' equity
or results of operations of the Company and its subsidiaries;
there has been no material spill, discharge, leak, emission,
injection, escape, dumping or release of any kind onto such
property or into the environment surrounding such property of
any toxic wastes, medical wastes, solid wastes, hazardous
wastes or hazardous substances due to or caused by the Company
or any of its subsidiaries or with respect to which the
Company or any of its subsidiaries have knowledge, except for
any such spill, discharge, leak, emission, injection, escape,
dumping or release which would not have or would not be
reasonably likely to have, singularly or in the aggregate with
all such spills, discharges, leaks, emissions, injections,
escapes, dumpings and releases, a material adverse effect on
the general affairs, management, financial position,
stockholders' equity or results of operations of the Company
and its subsidiaries; and the terms "hazardous wastes", "toxic
wastes", "hazardous substances" and "medical wastes" shall
have the meanings specified in any applicable local, state,
federal and foreign laws or regulations with respect to
environmental protection.
(t) Neither the Company nor any subsidiary nor the
Trust is an "investment company" within the meaning of such
term under the Investment Company Act of 1940 and the rules
and regulations of the Securities and Exchange Commission (the
"Commission") thereunder.
(u) The Company is duly registered as a bank holding
company under the Bank Holding Company Act of 1956, as amended
(the "BHC Act"); and the deposit accounts of The Provident
Bank are insured by the Federal Deposit Insurance Corporation
("FDIC") to the fullest extent permitted by law and the rules
and regulations of the FDIC, and no proceedings for the
termination of such insurance are pending or threatened.
(v) The Company and each of its subsidiaries are in
compliance in all material respects with all laws administered
by and regulations of the Board of Governors of the Federal
Reserve System, the Federal Deposit Insurance Corporation, the
Ohio Division of Financial Institutions and any other federal
or state bank regulatory authority with jurisdiction over the
Company or any of its subsidiaries (the "Bank Regulatory
Authorities"), other than where such failures to comply would
not have a material adverse effect on the Company and its
subsidiaries, taken as a whole. Neither the Company nor any of
its subsidiaries is a party to any written agreement or
memorandum of understanding with, or a party to any commitment
letter or similar undertaking to, or is subject to any order
or directive by, or is a recipient of any extraordinary
supervisory letter from, or has adopted any board resolutions
at the request of, any Bank Regulatory Authority which
restricts materially the conduct of its business, or in any
manner
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relates to its capital adequacy, its credit policies or its
management, nor have any of them been advised by any Bank
Regulatory Authority that it is contemplating issuing or
requesting (or is considering the appropriateness of issuing
or requesting) any such order, decree, agreement, memorandum
of understanding, extraordinary supervisory letter, commitment
letter or similar submission, or any such board resolutions.
(w) Neither the Company nor any of its affiliates (as
defined in Rule 501(b) of Regulation D under the Securities
Act, an "Affiliate") has directly, or through any agent, (i)
sold, offered for sale, solicited offers to buy or otherwise
negotiated in respect of, any security (as defined in the
Securities Act) which is or will be integrated with the sale
of the Capital Securities in a manner that would require the
registration under the Securities Act of the Securities or
(ii) engaged in any form of general solicitation or general
advertising in connection with the offering of the Securities
(as those terms are used in Regulation D under the Securities
Act), or in any manner involving a public offering within the
meaning of Section 4(2) of the Securities Act.
2. Purchase of the Capital Securities by the Initial
Purchasers. (i) 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 you, and each of you, severally and not jointly, agrees to
purchase from the Trust, the liquidation amount of the Capital Securities as set
forth opposite each Initial Purchaser's name in Schedule 1 hereto, at a purchase
price equal to 100% of their liquidation amount.
As compensation to the Initial Purchasers for their
commitments hereunder, the Company agrees to pay the Initial Purchasers a
commission of 1.25% of the purchase price of the Capital Securities set forth in
Schedule I opposite each Initial Purchaser's name.
(ii) The Company shall not be obligated to deliver any of the
Capital Securities, except upon payment for all of the Capital Securities to be
purchased as hereinafter provided.
3. Sale and Resale of the Capital Securities by the Initial
Purchasers. You have advised the Company that you propose to offer the Capital
Securities for resale upon the terms and conditions set forth in this Agreement
and in the Offering Memorandum. You hereby represent and warrant to, and agree
with, the Company that you (i) are purchasing the Capital Securities pursuant to
a private sale exempt from registration under the Securities Act, (ii) will not
solicit offers for, or offer or sell, the Capital Securities by means of any
form of general solicitation or general advertising or in any manner involving a
public offering within the meaning of Section 4(2) of the Securities Act, and
(iii) will solicit offers for the Capital Securities only from, and will offer,
sell or deliver the Capital Securities, as part of their initial offering, only
to (A) in the case of offers inside the United States, (1) persons whom you
reasonably believe to be qualified institutional buyers ("Qualified
Institutional Buyers") as defined in Rule 144A under the Securities Act, as such
rule may be amended from time to time ("Rule
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144A") or, if any such person is buying for one or more institutional accounts
for which such person is acting as fiduciary or agent, only when such person has
represented to you that each such account is a Qualified Institutional Buyer, to
whom notice has been given that such sale or delivery is being made in reliance
on Rule 144A or (2) institutional accredited investors ("Accredited Investors")
as defined in Rule 501(a)(1)(2), (3) or (7) under Regulation D who execute
letters of representation in the form included as Appendix A to the Offering
Memorandum in private sales exempt from registration under the Securities Act
and (B) in the case of offers outside the United States, to persons other than
U.S. persons ("foreign purchasers", which term shall include dealers or other
professional fiduciaries in the United States acting on a discretionary basis
for foreign beneficial owners (other than an estate or trust)).
4. Delivery of and Payment for the Capital Securities. (a)
Payment of the purchase price for, and delivery of, the Capital Securities shall
be made at the offices of Simpson Thacher & Bartlett, New York, New York or at
such other place as shall be agreed upon by the Company and you, at 9:30 a.m.
(New York time), on November 27, 1996 or at such other time or date as you and
the Company shall determine (such date and time of payment and delivery being
herein called the "Closing Date").
(b) On the Closing Date, payment shall be made to the Company
in same-day funds by wire transfer to such account or accounts as the Company
shall specify prior to the Closing Date or by such means as the parties hereto
shall agree prior to the Closing Date against delivery to you of the
certificates evidencing the Capital Securities. Upon delivery, the Capital
Securities shall be registered in such names and in such denominations as the
Initial Purchasers shall request in writing not less than two full business days
prior to the Closing Date. For the purpose of expediting the checking and
packaging of certificates evidencing the Capital Securities, the Company agrees
to make such certificates available for inspection at least 24 hours prior to
the Closing Date.
5. Further Agreements of the Company. Each of the Company
and the Trust agrees:
(a) To furnish to you, without charge, as many copies
of the Memorandum and any supplements and amendments thereto
as you may reasonably request.
(b) Prior to making any amendment or supplement to
the Memorandum, the Company shall furnish a copy thereof to
the Initial Purchasers and counsel to the Initial Purchasers
and will not effect any such amendment or supplement to which
the Initial Purchasers shall reasonably object by notice to
the Company after a reasonable period to review, which shall
not in any case be longer than five business days after
receipt of such copy.
(c) If, at any time prior to completion of the
distribution of the Capital Securities by you to purchasers,
any event shall occur or condition exist as a result of which
it is necessary, in the opinion of counsel for you or counsel
for the
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Company, to amend or supplement the Memorandum in order that
the Memorandum 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 not misleading in light
of the circumstances existing at the time it is delivered to a
purchaser, or if it is necessary to amend or supplement the
Memorandum to comply with applicable law, to promptly prepare
such amendment or supplement as may be necessary to correct
such untrue statement or omission or so that the Memorandum,
as so amended or supplemented, will comply with applicable law
and to furnish you such number of copies as you may reasonably
request.
(d) So long as the Capital Securities are outstanding
and are "Restricted Securities" within the meaning of Rule
144(a)(3) under the Securities Act, to furnish to holders of
the Capital Securities and prospective purchasers of Capital
Securities designated by such holders, upon request of such
holders or such prospective purchasers, the information
required to be delivered pursuant to Rule 144A(d)(4) under the
Securities Act.
(e) For a period of five years following the date of
the Memorandum, to furnish to the Initial Purchasers copies of
all materials furnished by the Company to its shareholders and
all public reports and all reports and financial statements
furnished by each of the Company and the Trust to the
principal national securities exchange upon which the Capital
Securities may be listed pursuant to requirements of or
agreements with such exchange or to the Commission pursuant to
the Exchange Act or any rule or regulation of the Commission
thereunder.
(f) Promptly from time to time to take such action as
the Initial Purchasers may reasonably request to qualify the
Capital Securities, the Guarantee Agreement and the Junior
Subordinated Debentures for offering and sale under the
securities laws of such jurisdictions as the Initial
Purchasers may request and to comply with such laws so as to
permit the continuance of sales and dealings therein in such
jurisdictions for as long as may be necessary to complete the
distribution of the Capital Securities.
(g) Not to offer, sell, contract to sell or otherwise
dispose of any additional securities of the Trust or the
Company substantially similar to the Capital Securities or any
securities convertible into or exchangeable for or that
represent the right to receive any such similar securities,
without the consent (which consent shall not be unreasonably
withheld) of the Initial Purchasers during the period
beginning from the date of this Agreement and continuing to
and including the earlier of (i) the termination of trading
restrictions on the Capital Securities, as communicated to the
Company by the Initial Purchasers, and (ii) 90 days following
the Closing Date.
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(h) To use its best efforts to permit the Capital
Securities to be designated Private Offerings, Resales and
Trading through Automated Linkages Market ("PORTAL")
securities in accordance with the rules and regulations
adopted by the National Association of Securities Dealers,
Inc. relating to trading in the PORTAL Market and to permit
the Capital Securities to be eligible for clearance and
settlement through The Depository Trust Company (the "DTC").
(i) To apply the net proceeds from the sale of the
Capital Securities being sold by the Trust as set forth in the
Memorandum.
(j) Except following the effectiveness of the
Registration Statement (as defined in the Registration Rights
Agreement), not to, and will cause its affiliates not to,
solicit any offer to buy or offer to sell the Capital
Securities by means of any form of general solicitation or
general advertising (as those terms are used in Regulation D
under the Securities Act) or in any manner involving a public
offering within the meaning of Section 4(2) of the Securities
Act.
(k) Not to, and will cause its affiliates not to,
sell, offer for sale or solicit offers to buy or otherwise
negotiate in respect of any security (as defined in the
Securities Act) in a transaction that could be integrated with
the sale of the Capital Securities in a manner that would
require the registration under the Securities Act of the
Capital Securities.
(l) To take such steps as shall be necessary to
ensure that neither the Company, any subsidiary of the Company
nor the Trust shall become an "investment company" within the
meaning of such term under the Investment Company Act of 1940
and the rules and regulations of the Commission thereunder.
6. Expenses. The Company agrees to pay (a) the costs incident
to the authorization, issuance, sale and delivery of the Capital Securities and
any taxes payable in that connection; (b) the costs incident to the preparation
and printing of the Memorandum and any amendments or supplements thereto; (c)
the costs of distributing the Memorandum and any amendments or supplements
thereto; (d) the fees and expenses of qualifying the Capital Securities under
the securities laws of the several jurisdictions as provided in Section 5(f) and
of preparing, printing and distributing a Blue Sky Memorandum and a Legal
Investment Survey (including related fees and expenses of counsel to the Initial
Purchasers); (e) any fees charged by securities rating services for rating the
Capital Securities; (f) all fees and expenses, if any, incurred in connection
with the admission of such Securities for trading in PORTAL; (g) the fees and
expenses of the Property Trustee (as defined in the Declaration), the Guarantee
Trustee and the Indenture Trustee; and (h) all other costs and expenses incident
to the performance of the obligations of the Company and the Trust.
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7. Conditions to the Initial Purchasers' Obligations. The
respective obligations of the Initial Purchasers hereunder are subject to the
accuracy, when made and on the Closing Date, of the representations and
warranties of the Company and the Trust contained herein, to the performance by
the Company and the Trust of their respective obligations hereunder, and to each
of the following additional terms and conditions:
(a) No Initial Purchaser shall have discovered and
disclosed to the Company and the Trust on or prior to the
Closing Date that the Memorandum or any amendment or
supplement thereto contains any untrue statement of a fact
which, in the opinion of Simpson Thacher & Bartlett, counsel
for the Initial Purchasers, is material or omits to state any
fact which, in the opinion of such counsel, is material and is
required to be stated therein or is necessary to made the
statements therein not misleading.
(b) All corporate proceedings and other legal matters
incident to the authorization, form and validity of this
Agreement, the Indenture, the Junior Subordinated Debentures,
the Guarantee Agreement, the Capital Securities, the Common
Securities, the Memorandum, and all other legal matters
relating to this Agreement and the transactions contemplated
hereby shall be satisfactory in all respects to counsel for
the Initial Purchasers, and the Company and the Trust shall
have furnished to such counsel all documents and information
that they may reasonably request to enable them to pass upon
such matters.
(c) Keating, Muething & Klekamp shall have furnished
to the Initial Purchasers their written opinion, as counsel to
the Company, addressed to the Initial Purchasers and dated the
Closing Date, in form and substance satisfactory to the
Initial Purchasers, to the effect set forth in Exhibit A
hereto and to such further effect as counsel to the Initial
Purchasers may reasonably request.
(d) Morris, Nichols, Arsht & Tunnell shall have
furnished to the Initial Purchasers their written opinion, on
certain matters of Delaware law relating to the validity of
the Capital Securities, addressed to the Initial Purchasers
and dated the Closing Date, in form and substance satisfactory
to the Initial Purchasers, to the effect set forth in Exhibit
B hereto and to such further effect as counsel to the Initial
Purchasers may reasonably request.
(e) Simpson Thacher & Bartlett, special tax counsel
to the Company, shall have furnished to the Initial Purchasers
their written opinion, to the effect that the statements
contained in the Memorandum under the caption "Certain United
States Federal Income Tax Consequences" insofar as they
describe federal statutes, rules and regulations, constitute a
fair summary thereof.
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(f) You shall have received on the Closing Date a
letter, dated the date hereof and the Closing Date, as the
case may be, in form and substance satisfactory to you, from
Ernst & Young, LLP, independent public accountants, containing
statements and information of the type ordinarily included in
accountants' "comfort letters" to underwriters with respect to
the financial statements and certain financial information,
including the financial information, contained or incorporated
by reference in the Memorandum as identified by you.
(g) The Company and the Trust shall have furnished to
the Initial Purchasers a certificate, dated the Closing Date,
of the Chairman of the Board, President or a Vice President of
the Company and its chief financial officer stating that:
(i) The representations, warranties and
agreements of the Company and the Trust in Section 1
are true and correct as of the Closing Date and the
Company has complied with all its agreements
contained herein;
(ii) (A) Neither the Company nor any of its
subsidiaries has sustained since the date of the
latest quarterly financial statements included or
incorporated by reference in the Memorandum any
material loss or interference with its business from
fire, explosion, flood or other calamity, whether or
not covered by insurance, or from any labor dispute
or court or governmental action, order or decree,
otherwise than as set forth or contemplated in the
Memorandum or (B) since such date there has not been
any change in the capital stock or long-term debt of
the Company or any of its subsidiaries or any change,
or any development involving a prospective change, in
or affecting the general affairs, management,
financial position, stockholders' equity or results
of operations of the Company and its subsidiaries,
otherwise than as set forth or contemplated in the
Memorandum; and
(iii) They have carefully examined the
Memorandum and, in their opinion (A) the Memorandum,
as of its date, did not include any untrue statement
of a material fact and did not omit to state any
material fact necessary to make the statements
therein, in the light of the circumstances under
which they were made, not misleading, and (B) since
the date of the Memorandum no event has occurred
which should have been set forth in a supplement or
amendment to the Memorandum.
(h) (i) Neither the Company nor any of its
subsidiaries shall have sustained since the date of the latest
audited financial statements included or incorporated by
reference in the Memorandum any loss or interference with its
business from fire, explosion, flood or other calamity,
whether or not covered by
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insurance, or from any labor dispute or court or governmental
action, order or decree, otherwise than as set forth or
contemplated in the Memorandum or (ii) since such date there
shall not have been any change in the capital stock or
long-term debt of the Company or any of its subsidiaries or
any change, or any development involving a prospective change,
in or affecting the general affairs, management, financial
position, stockholders' equity or results of operations of the
Company and its subsidiaries, otherwise than as set forth or
contemplated in the Memorandum, the effect of which, in any
such case described in clause (i) or (ii), is, in the judgment
of the Initial Purchasers, so material and adverse as to make
it impracticable or inadvisable to proceed with the offering
or the delivery of the Capital Securities on the terms and in
the manner contemplated in the Memorandum.
(i) Subsequent to the execution and delivery of this Agreement
(i) no downgrading shall have occurred in the rating accorded the
Trust's Capital Securities by any "nationally recognized statistical
rating organization", as that term is defined by the Commission for
purposes of Rule 436(g)(2) of the Rules and Regulations and (ii) no
such organization shall have publicly announced that it has under
surveillance or review, with possible negative implications, its rating
of any of the Trust's Capital Securities.
(j) Subsequent to the execution and delivery of this Agreement
there shall not have occurred any of the following: (i) trading in
securities generally on the New York Stock Exchange or the American
Stock Exchange or in the over-the-counter market, or trading in any
securities of the Company on any exchange or in the over-the-counter
market, shall have been suspended or minimum prices shall have been
established on any such exchange or such market by the Commission, by
such exchange or by any other regulatory body or governmental authority
having jurisdiction, (ii) a banking moratorium shall have been declared
by Federal or state authorities, (iii) the United States shall have
become engaged in hostilities, there shall have been an escalation in
hostilities involving the United States or there shall have been a
declaration of a national emergency or war by the United States or (iv)
there shall have occurred such a material adverse change in general
economic, political or financial conditions (or the effect of
international conditions on the financial markets in the United States
shall be such) as to make it, in the judgment of a majority in interest
of the Initial Purchasers, impracticable or inadvisable to proceed with
the offering or delivery of the Capital Securities on the terms and in
the manner contemplated in the Memorandum.
(k) The Initial Purchasers shall have received on the
date hereof the Registration Rights Agreement executed by the Company
and the Trust.
All opinions, letters, evidence and certificates mentioned
above or elsewhere in this Agreement shall be deemed to be in compliance with
the provisions hereof only if they are in form and substance satisfactory to
counsel for the Initial Purchasers.
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8. Indemnification and Contribution.
(a) The Company shall indemnify and hold harmless each Initial
Purchaser, its officers and employees and each person, if any, who controls any
Initial Purchaser within the meaning of the Securities Act, from and against any
loss, claim, damage or liability, joint or several, or any action in respect
thereof (including, but not limited to, any loss, claim, damage, liability or
action relating to purchases and sales of Capital Securities), to which that
Initial Purchaser, officer, employee or controlling person may become subject,
under the Securities Act or otherwise, insofar as such loss, claim, damage,
liability or action arises out of, or is based upon, (i) any untrue statement or
alleged untrue statement of a material fact contained (A) in the Memorandum or
in any amendment or supplement thereto, or (B) in any blue sky application or
other document prepared or executed by the Company or the Trust (or based upon
any written information furnished by the Company or the Trust) specifically for
the purpose of qualifying any or all of the Capital Securities under the
securities laws of any state or other jurisdiction (any such application,
document or information being hereinafter called a "Blue Sky Application"), or
(ii) the omission or alleged omission to state in the Memorandum or in any
amendment or supplement thereto, or in any Blue Sky Application any material
fact required to be stated therein or necessary to make the statements therein
not misleading or the offering contemplated hereby, and which is included as
part of or referred to in any loss, claim, damage, liability or action arising
out of or based upon matters covered by clause (i) or (ii) above and shall
reimburse each Initial Purchaser and each such officer, employee and controlling
person promptly upon demand for any legal or other expenses reasonably incurred
by that Initial Purchaser, officer, employee or controlling person in connection
with investigating or defending or preparing to defend against any such loss,
claim, damage, liability or action as such expenses are incurred; provided,
however, that the Company shall not be liable in any such case to the extent
that any such loss, claim, damage, liability or action arises out of, or is
based upon, any untrue statement or alleged untrue statement or omission or
alleged omission made in the Memorandum or in any such amendment or supplement,
or in any Blue Sky Application in reliance upon and in conformity with the
written information furnished to the Company or the Trust by or on behalf of any
Initial Purchaser specifically for inclusion therein and described in Section .
The foregoing indemnity agreement is in addition to any liability which the
Company may otherwise have to any Initial Purchaser or to any officer, employee
or controlling person of that Initial Purchaser.
(b) Each Initial Purchaser, severally and not jointly, shall
indemnify and hold harmless the Company, its officers and employees, each of its
directors and each Trustee, and each person, if any, who controls the Company or
the Trust within the meaning of the Securities Act, from and against any loss,
claim, damage or liability, joint or several, or any action in respect thereof,
to which the Company, any such director or officer, or any such Trustee or any
controlling person may become subject, under the Securities Act or otherwise,
insofar as such loss, claim, damage, liability or action arises out of, or is
based upon, (i) any untrue statement or alleged untrue statement of a material
fact contained (A) in the Memorandum or in any amendment or supplement thereto,
or (B) in any Blue Sky Application or (ii) the omission or alleged omission to
state in the Memorandum or in any amendment or supplement thereto, or in any
Blue Sky Application any material fact required to be stated therein or
necessary to make
16
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the statements therein not misleading, but in each case only to the extent that
the untrue statement or alleged untrue statement or omission or alleged omission
was made in reliance upon and in conformity with the written information
furnished to the Company or the Trustee by or on behalf of that Initial
Purchaser specifically for inclusion therein and described in Section , and
shall reimburse the Company and any such director or officer, or the Trust or
any such Trustee, or controlling person for any legal or other expenses
reasonably incurred by the Company or any such director or officer, or the Trust
or any such Trustee, or any controlling person in connection with investigating
or defending or preparing to defend against any such loss, claim, damage,
liability or action as such expenses are incurred. The foregoing indemnity
agreement is in addition to any liability which any Initial Purchaser may
otherwise have to the Company or any such director or officer, or the Trust or
any such Trustee, or any controlling person.
(c) Promptly after receipt by an indemnified party under this
Section of notice of any claim or the commencement of any action, the
indemnified party shall, if a claim in respect thereof is to be made against the
indemnifying party under this Section , notify the indemnifying party in writing
of the claim or the commencement of that action; provided, however, that the
failure to notify the indemnifying party shall not relieve it from any liability
which it may have under this Section except to the extent it has been materially
prejudiced by such failure and, provided further, that the failure to notify the
indemnifying party shall not relieve it from any liability which it may have to
an indemnified party otherwise than under this Section . If any such claim or
action shall be brought against an indemnified party, and it shall notify the
indemnifying party thereof, the indemnifying party shall be entitled to
participate therein and, to the extent that it wishes, jointly with any other
similarly notified indemnifying party, to assume the defense thereof with
counsel satisfactory to the indemnified party. After notice from the
indemnifying party to the indemnified party of its election to assume the
defense of such claim or action, the indemnifying party shall not be liable to
the indemnified party under this Section for any legal or other expenses
subsequently incurred by the indemnified party in connection with the defense
thereof other than reasonable costs of investigation; provided, however, that
the Initial Purchasers shall have the right to employ counsel to represent
jointly the Initial Purchasers and their respective officers, employees and
controlling persons who may be subject to liability arising out of any claim in
respect of which indemnity may be sought by the Initial Purchasers against the
Company under this Section if, in the reasonable judgment of the Initial
Purchasers, it is advisable for the Initial Purchasers and those officers,
employees and controlling persons to be jointly represented by separate counsel,
and in that event the fees and expenses of such separate counsel shall be paid
by the Company. Each indemnified party, as a condition of the indemnity
agreements contained in Sections and , shall use its best efforts to cooperate
with the indemnifying party in the defense of any such action or claim. No
indemnifying party shall (i) without the prior written consent of the
indemnified parties (which consent shall not be unreasonably withheld), settle
or compromise or consent to the entry of any judgment with respect to any
pending or threatened claim, action, suit or proceeding in respect of which
indemnification or contribution may be sought hereunder (whether or not the
indemnified parties are actual or potential parties to such claim or action)
unless such settlement, compromise or consent includes an unconditional release
of each indemnified party from all
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liability arising out of such claim, action, suit or proceeding, or (ii) be
liable for any settlement of any such action effected without its written
consent (which consent shall not be unreasonably withheld), but if settled with
its written consent or if there be a final judgment of the plaintiff in any such
action, the indemnifying party agrees to indemnify and hold harmless any
indemnified party from and against any loss of liability by reason of such
settlement or judgment.
(d) If the indemnification provided for in this Section shall
for any reason be unavailable to or insufficient to hold harmless an indemnified
party under Section or in respect of any loss, claim, damage or liability, or
any action in respect thereof, referred to therein, then each indemnifying party
shall, in lieu of indemnifying such indemnified party, contribute to the amount
paid or payable by such indemnified party as a result of such loss, claim,
damage or liability, or action in respect thereof, (i) in such proportion as
shall be appropriate to reflect the relative benefits received by the Company
and the Trust on the one hand and the Initial Purchasers on the other from the
offering of the Capital Securities or (ii) if the allocation provided by clause
(i) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of the Company and the Trust on the one hand
and the Initial Purchasers on the other with respect to the statements or
omissions which resulted in such loss, claim, damage or liability, or action in
respect thereof, as well as any other relevant equitable considerations. The
relative benefits received by the Company and the Trust on the one hand and the
Initial Purchasers on the other with respect to such offering shall be deemed to
be in the same proportion as the total net proceeds from the offering of the
Capital Securities purchased under this Agreement (before deducting expenses)
received by the Trust on the one hand, and the total underwriting commissions
received by the Initial Purchasers with respect to the Capital Securities
purchased under this Agreement, on the other hand, bear to the total gross
proceeds from the offering of the shares of the Capital Securities under this
Agreement, in each case as set forth in the table on the cover page of the
Memorandum. The relative fault shall be determined by reference to whether the
untrue or alleged untrue statement of a material fact or omission or alleged
omission to state a material fact relates to information supplied by the Company
and the Trust on the one hand or the Initial Purchasers, the intent of the
parties and their relative knowledge, access to information and opportunity to
correct or prevent such statement or omission. The Company and the Initial
Purchasers agree that it would not be just and equitable if contributions
pursuant to this Section were to be determined by pro rata allocation (even if
the Initial Purchasers were treated as one entity for such purpose) or by any
other method of allocation which does not take into account the equitable
considerations referred to herein. The amount paid or payable by an indemnified
party as a result of the loss, claim, damage or liability, or action in respect
thereof, referred to above in this Section shall be deemed to include, for
purposes of this Section , any legal or other expenses reasonably incurred by
such indemnified party in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this Section , no Initial
Purchaser shall be required to contribute any amount in excess of the amount by
which the total price at which the Capital Securities sold and distributed by it
was offered to the purchasers exceeds the amount of any damages which such
Initial Purchaser has otherwise paid or become liable to pay by reason of any
untrue or alleged untrue statement or omission or alleged omission. No person
guilty of
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18
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The Initial Purchasers' obligations
to contribute as provided in this Section are several in proportion to their
respective underwriting obligations and not joint.
(e) The Initial Purchasers severally confirm that the
statements with respect to the offering of the Capital Securities set forth in
the bottom paragraph on the cover page of, and under the caption "Plan of
Distribution" in, the Memorandum are correct and constitute the only information
furnished in writing to the Company or the Trust by or on behalf of the Initial
Purchasers specifically for inclusion in the Memorandum.
9. Termination. The obligations of the Initial Purchasers
hereunder may be terminated by them by notice given to and received by the
Company or the Trust prior to delivery of and payment for the Capital Securities
if, prior to that time, any of the events described in Sections 7(h), 7(i) or
7(j) shall have occurred or if the Initial Purchasers shall decline to purchase
the Capital Securities for any reason permitted under this Agreement.
10. Reimbursement of Initial Purchasers' Expenses. If (a) the
Trust shall fail to tender the Capital Securities for delivery to the Initial
Purchasers for any reason, or (b) the Initial Purchasers shall decline to
purchase the Capital Securities for any reason permitted under this Agreement,
the Company shall reimburse the Initial Purchasers for the reasonable fees and
expenses of their counsel and for such other out-of-pocket expenses as shall
have been incurred by them in connection with this Agreement and the proposed
purchase of the Capital Securities, and upon demand the Company shall pay the
full amount thereof to the Initial Purchasers.
11. Notices, etc. All statements, requests, notices and
agreements hereunder shall be in writing, and:
(a) if to the Initial Purchasers, shall be delivered
or sent by mail, telex or facsimile transmission to Lehman
Brothers Inc., Three World Financial Center, New York, New
York 10285, Attention: Syndicate Department (Fax: 212-528-
8822);
(b) if to the Company or the Trust shall be delivered
or sent by mail, telex or facsimile transmission to the
address of the Company set forth in the Primary Memorandum,
Attention: Mark E. Magee (Fax: 513-763-8069).
Any such statements, requests, notices or agreements shall take effect at the
time of receipt thereof. The Company and the Trust shall be entitled to act and
rely upon any request, consent, notice or agreement given or made on behalf of
the Initial Purchasers by Lehman Brothers Inc.
12. Persons Entitled to Benefit of Agreement. This Agreement
shall inure to the benefit of and be binding upon the Initial Purchasers, the
Company, the Trust and their respective successors. This Agreement and the terms
and provisions hereof are for the sole
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19
benefit of only those persons, except that (A) the representations, warranties,
indemnities and agreements of the Company and the Trust contained in this
Agreement shall also be deemed to be for the benefit of the officers and
employees of each Initial Purchaser and the person or persons, if any, who
control each Initial Purchaser within the meaning of Section 15 of the
Securities Act and (B) the indemnity agreement of the Initial Purchasers
contained in Section of this Agreement shall be deemed to be for the benefit of
directors, officers and employees of the Company and the Trust and any person
controlling the Company or the Trust within the meaning of Section 15 of the
Securities Act. Nothing in this Agreement is intended or shall be construed to
give any person, other than the persons referred to in this Section 12, any
legal or equitable right, remedy or claim under or in respect of this Agreement
or any provision contained herein.
13. Survival. The respective indemnities, representations,
warranties and agreements of the Company and the Trust the Initial Purchasers
contained in this Agreement or made by or on behalf of them, respectively,
pursuant to this Agreement, shall survive the delivery of and payment for the
Capital Securities and shall remain in full force and effect, regardless of any
investigation made by or on behalf of any of them or any person controlling any
of them.
14. Definition of the Terms "Business Day" and "Subsidiary".
For purposes of this Agreement, (a) "business day" means any day on which the
New York Stock Exchange, Inc. is open for trading and (b) "subsidiary" has the
meaning set forth in Rule 405 of the Rules and Regulations.
15. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF NEW YORK.
16. Counterparts. This Agreement may be executed in one or
more counterparts and, if executed in more than one counterpart, the executed
counterparts shall each be deemed to be an original but all such counterparts
shall together constitute one and the same instrument.
17. Headings. The headings herein are inserted for convenience
of reference only and are not intended to be part of, or to affect the meaning
or interpretation of, this Agreement.
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20
If the foregoing correctly sets forth the agreement among the
Company, the Trust and the Initial Purchasers, please indicate your acceptance
in the space provided for that purpose below.
Very truly yours,
PROVIDENT BANCORP, INC.
By:
--------------------
PROVIDENT CAPITAL TRUST I
By:
---------------------
Regular Trustee
Accepted:
LEHMAN BROTHERS INC.
By:
-------------------
For itself and the several other Initial Purchasers
named in Schedule 1 hereto
21
SCHEDULE 1
Liquidation Amount of
Initial Purchasers Capital Securities
------------------ ---------------------
Lehman Brothers Inc...................................................$ 52,000,000
Donaldson Lufkin & Jenrette Securities Corporation....................$ 16,000,000
Keefe Bruyette & Woods, Inc...........................................$ 16,000,000
McDonald & Company Securities, Inc....................................$ 16,000,000
------------
Total............................................................$100,000,000
============
22
EXHIBIT A
FORM OF OPINION OF KEATING, MUETHING & KLEKAMP,
COMPANY COUNSEL TO BE DELIVERED
PURSUANT TO SECTION 7(c)
(i) The Company and each of its subsidiaries have been duly
incorporated and are validly existing as corporations in good standing under the
laws of their respective jurisdictions of incorporation, are duly qualified to
do business and are in good standing as foreign corporations in each
jurisdiction in which their respective ownership or lease of property or the
conduct of their respective businesses requires such qualification (other than
those jurisdictions in which the failure to so qualify would not have a material
adverse effect on the Company or the Company and its subsidiaries taken as a
whole), and have all power and authority necessary to own or hold their
respective properties and conduct the businesses in which they are engaged.
(ii) Each of the Purchase Agreement and the Registration
Rights Agreement has been duly authorized, executed and delivered by the Company
and has been duly executed and delivered by the Trust.
(iii) The Indenture has been duly authorized, executed, and
delivered by the Company and, when duly authorized, executed and delivered by
the Indenture Trustee, will constitute a valid and legally binding obligation of
the Company, enforceable against the Company, in accordance with its terms,
subject to the effects of bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws relating to or affecting
creditors' rights generally, general equitable principles (whether considered in
a proceeding in equity or at law) and implied covenant of good faith and fair
dealing.
(iv) The Junior Subordinated Debentures have been duly
authorized, executed and delivered by the Company, and, when duly authenticated
by the Indenture Trustee and upon payment and delivery as described in the
Purchase Agreement will constitute valid and legally binding obligations of the
Company enforceable against the Company in accordance with their terms, subject
to the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws relating to or affecting creditors' rights
generally, general equitable principles (whether considered in a proceeding in
equity or at law) and an implied covenant of good faith and fair dealing.
(v) The Guarantee Agreement has been duly authorized, executed
and delivered by the Company and assuming due authorization, execution and
delivery by the Guarantee Trustee, will constitute a valid and legally binding
obligation of the Company, enforceable against the Company in accordance with
its terms subject to the effects of bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and other similar laws relating to or
affecting creditors' rights generally, general equitable principles (whether
considered in a proceeding in equity or at law) and an implied covenant of good
faith and fair dealing.
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A-2
(vi) The Declaration has been duly authorized, executed and
delivered by the Company.
(vii) The execution, delivery and performance of the Purchase
Agreement, the Declaration, the Indenture, the Junior Subordinated Debentures
and the Guarantee Agreement (collectively, the "Transaction Documents") by the
Company and the Trust, as applicable, will not constitute a material breach of,
or constitute a default under, any material indenture, mortgage, deed of trust,
loan agreement or other agreement or instrument to which the Company or any of
its subsidiaries is a party or by which the Company or any of its subsidiaries
is bound or to which any of the property or assets of the Company or any of its
subsidiaries is subject, nor will such actions result in any violation of the
provisions of the character or by-laws of the Company or any of its subsidiaries
or any statute or any order, rule or regulation of any court or governmental
agency or body having jurisdiction over the Company or any of its subsidiaries
or any of their respective properties or assets, the effects of which breach,
violation or default would be material to the Company and its subsidiaries taken
as a whole.
(viii) All of the outstanding shares of capital stock of each
significant subsidiary (as such term is defined in the Exchange Act) have been
duly authorized and validly issued and are fully paid and non-assessable; except
as disclosed in the Memorandum, all such shares are owned by the Company free
and clear of any pledge, lien, security interest, charge, claim, equitable right
or encumbrance of any kind.
(ix) No consent, approval, authorization, order, registration
or qualification of or which any Federal or Ohio governmental agency or body or
any Delaware governmental agency or body acting pursuant to the Delaware General
Corporation Law or, to our knowledge, and Federal or Ohio court or any Delaware
court acting pursuant to the Delaware General Corporation Law is required for
the issue and sale by the Trust of the Capital Securities, the issuance by the
Company of the Junior Subordinated Debentures, the issuance of the Guarantee
Agreement by the Company and the compliance by the Company and Trust with all of
the provisions of the Purchase Agreement, except for such consents approvals,
authorizations, registrations or qualifications as may be required under state
securities or Blue Sky laws in connection with the purchase and distribution of
the Capital Securities and the Guarantee Agreement by the Initial Purchasers.
(x) The statements made in the Memorandum under the captions
"Description of Junior Subordinated Debentures", "The Trust", "Description of
Capital Securities", "Description of Guarantee" and "Relationship Among the
Capital Securities, the Junior Subordinated Debentures and the Guarantee",
insofar as such statements purport to constitute summaries of the terms of the
Capital Securities, the Junior Subordinated Debentures and the Guarantee,
constitute accurate summaries of the terms of the Capital Securities, the Junior
Subordinated Debentures and the Guarantee.
(xi) All descriptions in the Memorandum of contracts and other
documents which the Company or its subsidiaries are a party are accurate in all
material respects; to the best of our knowledge, there are no franchises,
contracts, indentures, mortgages, loan agreements, notes, leases or other
instruments required to be described or referred to in the Memorandum other than
those described or referred to therein.
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A-3
(xii) To our knowledge, there is not pending or threatened any
legal or governmental proceeding required to be described in the Memorandum
which is not described as required.
(xiii) The Trust is not a party to or otherwise bound by any
agreement other than those described in the Memorandum.
(xiv) Neither the Company nor the Trust is required to be
registered as an "investment company" under the 1940 Act.
(xv) The Company is duly registered as a bank holding company
under the Bank Holding Company Act of 1956, as amended (the "BHC Act"); and the
deposit accounts of the Bank are insured by the Federal Deposit Insurance
Corporation ("FDIC") to the fullest extent permitted by law and the rules and
regulations of the FDIC, and no proceedings for the termination of such
insurance are pending or threatened.
(xvi) The Company and each of its subsidiaries are in
compliance in all material respects with all laws administered by and
regulations of the Board of Governors of the Federal Reserve System, the Federal
Deposit Insurance Corporation, the Ohio Division of Financial Institutions and
any other federal or state bank regulatory authority with jurisdiction over the
Company or any of its subsidiaries (the "Bank Regulatory Authorities"), other
than where such failures to comply would not have a material adverse effect on
the Company and its subsidiaries, taken as a whole. Neither the Company nor any
of its subsidiaries is a party to any written agreement or memorandum of
understanding with, or a party to any commitment letter or similar undertaking
to, or is subject to any order or directive by, or is a recipient of any
extraordinary supervisory letter from, or has adopted any board resolutions at
the request of, any Bank Regulatory Authority which restricts materially the
conduct of its business, or in any manner relates to its capital adequacy, its
credit policies or its management, nor have any of them been advised by any Bank
Regulatory Authority that it is contemplating issuing or requesting (or is
considering the appropriateness of issuing or requesting) any such order,
decree, agreement, memorandum of understanding, extraordinary supervisory
letter, commitment letter or similar submission, or any such board resolutions.
(xvii) No registration of the Securities, the Guarantee or the
Junior Subordinated Debentures under the Securities Act of 1933, as amended (the
"Act"), and no qualification of the Declaration, the Guarantee or the Indenture
under the Trust Indenture Act of 1939, as amended, is required for the offer and
sale of the Securities by the Company to the Initial Purchasers or the initial
reoffer and resale of the Securities by the Initial Purchasers solely in the
manner contemplated by the Memorandum.
We have not independently verified the accuracy, completeness
or fairness of the statements made or included in the Memorandum or in the
documents incorporated by reference therein (the "Exchange Act Documents") and
take no responsibility therefor, except as and to the extent set forth in
paragraph (x) above. In the course of the preparation by the Company of the
Memorandum, we participated in conferences with certain officers and employees
of the Company, with representatives of Ernst & Young, LLP and with counsel to
the Initial Purchasers. Based on our examination of the Memorandum and the
Exchange Act Documents, our investigations made in connection with the
preparation of the Memorandum and our participation
25
A-4
in the conferences referred to above, we have no reason to believe that the
Memorandum (including the Exchange Act Documents) contains any untrue statement
of a material fact or omits 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.
26
EXHIBIT B
FORM OF OPINION OF MORRIS, NICHOLS, ARSHT & TUNNELL
SPECIAL DELAWARE COUNSEL TO THE COMPANY AND
THE TRUST TO BE DELIVERED PURSUANT TO SECTION 7(d)
(i) The Trust has been duly created and is validly existing in
good standing as a business trust under the Delaware Trust Act with the business
trust power and authority to own property and to conduct its business as
described in the Memorandum and to enter into and perform its obligations under
each of the Purchase Agreement, the Capital Securities, the Common Securities
and the Declaration; to such counsel's knowledge, the Trust is not a party to or
otherwise bound by any agreement other than those described in the Memorandum.
(ii) The Common Securities have been duly authorized by the
Declaration and, when issued and delivered by the Trust to the Company against
payment therefor as described in the Memorandum, will be validly issued and
(subject to the terms of the Declaration) fully paid undivided beneficial
interests in the assets of the Trust (such counsel may note that the Holders of
Common Securities will be subject to the withholding provisions of Section 10.4
of the Declaration, will be required to make payment or provide indemnity or
security as set forth in the Declaration and will be liable for the debts and
obligations of the Trust to the extent provided in Section 9.1(b) of the
Declaration); under the Delaware Trust Act and the Declaration the issuance of
the Common Securities is not subject to preemptive or other similar rights.
(iii) The Capital Securities have been duly authorized by the
Declaration and, when issued and delivered against payment of the consideration
as set forth in the Purchase Agreement, the Capital Securities will be validly
issued and (subject to the terms of the Declaration) fully paid and
non-assessable undivided beneficial interests in the Trust, the Holders of the
Capital Securities will be entitled to the benefits of the Declaration (subject
to the limitations set forth in clause (v) below) and will be entitled to the
same limitation of personal liability under Delaware law as extended to
stockholders of private corporations for profit (such counsel may note that the
Holders of Capital Securities will be subject to the withholding provisions of
Section 10.4 of the Declaration and will be required to make payment or provide
indemnity or security as set forth in the Declaration).
(iv) All necessary trust action has been taken to duly
authorize the execution and delivery by the Trust of the Purchase Agreement.
(v) Assuming the Declaration has been duly authorized by the
Company and has been duly executed and delivered by the Company and the Regular
Trustees, and assuming due authorization, execution and delivery of the
Declaration by the Property Trustee and the Delaware Trustee, the Declaration
constitutes a valid and binding obligation of the Company and the Regular
Trustees, enforceable against the Company and the Regular Trustees in accordance
with its terms, except to the extent that enforcement thereof may be limited by
(i) bankruptcy, insolvency, receivership, liquidation, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability relating to
or affecting creditors' rights and remedies, (ii) general principles of equity
(regardless of whether considered and applied in a proceeding in equity or
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27
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at law), and (iii) considerations of public policy and the effect of applicable
law relating to fiduciary duties.
(vi) The issuance and sale by the Trust of the Securities, the
purchase by the Trust of the Debentures, the execution, delivery and performance
by the Trust of the Purchase Agreement, the consummation by the Trust of the
transactions contemplated by the Purchase Agreement and compliance by the Trust
with its obligations thereunder will not violate (i) any of the provisions of
the Certificate of Trust or the Declaration or (ii) any applicable Delaware law
or administrative regulation.
(vii) Assuming that the Trust derives no income from or
connected with services provided within the State of Delaware and has no assets,
activities (other than having a Delaware Trustee as required by the Delaware
Trust Act and the filing of documents with the Secretary of State of Delaware)
or employees in the State of Delaware, no filing with, or authorization,
approval, consent, license, order, registration, qualification or decree of, any
Delaware court or Delaware governmental authority or agency (other that as may
be required under the securities or blue sky laws of the state of Delaware, as
to which such counsel need express no opinion) is necessary or required in
connection with the due authorization, execution and delivery of the Purchase
Agreement or the offering, issuance, sale or delivery of the Capital Securities.
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