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Exhibit 1
OHIO LEGACY CORP
up to 1,200,000 Shares
COMMON SHARES
(no par value)
Subscription Price $10.00 Per Share
AGENCY AGREEMENT
_______________ __, 1999
▇▇▇▇▇▇▇ ▇▇▇▇ & Company, a Division of
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Ladies and Gentlemen:
Ohio Legacy Corp, an Ohio corporation (the "Company" or "Holding
Company"), and Ohio Legacy Bank, Wooster, Ohio, a national banking association
in organization (the "Bank") (references to the "Bank" include both the Bank in
organization and after its articles of association have been granted, as
indicated by the context), with its deposit accounts insured by the Bank
Insurance Fund ("BIF") administered by the Federal Deposit Insurance Corporation
("FDIC"), hereby confirm their agreement with ▇▇▇▇▇▇▇ ▇▇▇▇ & Company, a Division
of ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, Inc. ("▇▇▇▇", "KBW" or "the Agent"), as follows:
SECTION 1. THE OFFERING. The Holding Company is offering a minimum of
900,000 shares and up to a maximum of 1,200,000 shares of common shares, no par
value (the "Shares" or "Common Shares"), in a community offering (the "Community
Offering" or "Offering") in connection with the Company's initial public
offering and capitalization of the Bank, a de novo, FDIC insured national bank.
The Company is offering all shares of Common Shares through approved
broker-dealer firms which are members of the National Association of Securities
Dealers, Inc. ("NASD")("Assisting Brokers").
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form SB-2 (File No. ___-_____) (the
"Registration Statement")
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containing a prospectus relating to the Offering for the registration of the
Shares under the Securities Act of 1933 (the "1933 Act"), and has filed such
amendments thereof and such amended prospectuses as may have been required to
the date hereof. The term "Registration Statement" shall include any documents
incorporated by reference therein and all financial schedules and exhibits
thereto, as amended, including post-effective amendments. The prospectus, as
amended, on file with the Commission at the time the Registration Statement
initially became effective is hereinafter called the "Prospectus," except that
if any Prospectus is filed by the Company pursuant to Rule 424(b) or (c) of the
rules and regulations of the Commission under the 1933 Act (the "1933 Act
Regulations") differing from the prospectus on file at the time the Registration
Statement initially becomes effective, the term "Prospectus" shall refer to the
prospectus filed pursuant to Rule 424(b) or (c) from and after the time said
prospectus is filed with the Commission.
The Bank has filed with the Office of the Comptroller of the Currency
("OCC") for approval to form a de novo national banking association, and with
the FDIC for insurance of accounts, and has filed amendments thereto as required
by the OCC and the FDIC (as so amended, the "Applications"). The Applications
have been approved by the OCC and the FDIC. The Company has filed with the Board
of Governors of the Federal Reserve System (the "FRB") its application (the
"Holding Company Application") to acquire the Bank under the Bank Holding
Company Act, as amended, and the regulations promulgated thereunder ("BHCA")
(the OCC, FDIC and Federal Reserve being hereafter referred to collectively as
the "Regulatory Agencies").
SECTION 2. RETENTION OF AGENT; COMPENSATION; SALE AND DELIVERY OF THE
SHARES. Subject to the terms and conditions herein set forth, the Company and
the Bank hereby appoint the Agent as their exclusive financial advisor and
marketing agent (i) to utilize its best efforts to solicit subscriptions for
Common Shares and to advise and assist the Company and the Bank with respect to
the Company's sale of the Shares in the Offering and (ii) to manage the sale of
Shares through a group of selected broker dealers if necessary.
On the basis of the representations and warranties and subject to the
terms and conditions of this Agreement, the Agent accepts such appointment and
agrees to consult with and advise the Company and the Bank as to matters set
forth in the letter agreement ("Letter Agreement"), dated September 7, 1999,
between the Bank, the Company and ▇▇▇▇ (a copy of which is attached hereto as
Exhibit A). It is acknowledged by the Company and the Bank that the Agent shall
not be obligated to purchase any Shares and shall not be obligated to take any
action which is inconsistent with any applicable law, regulation, decision or
order. Subscriptions will be offered by means of Order Forms as described in the
Prospectus. Except as provided in the paragraph below, the appointment of the
Agent hereunder shall terminate upon completion of the Offering.
▇▇▇▇ agrees to provide financial advisory assistance to the Bank and
the Company at no charge for a period of one year following the completion of
the Offering including general advice on the market for bank stocks and the
stock of the Company, shareholder enhancement methods and other related matters.
Thereafter, if the parties wish to continue the relationship, a fee will be
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negotiated and an agreement with respect to specific advisory services will be
entered into at that time.
In the event the Company is unable to sell a minimum of 900,000 Shares
within the period herein provided, this Agreement shall terminate and the
Company shall refund to any persons who have subscribed for any of the Shares
the full amount which it may have received from them as set forth in the
Prospectus; and none of the parties to this Agreement shall have any obligation
to the other parties hereunder, except as set forth in this Section 2 and in
Sections 6, 8 and 9 hereof.
In the event the Offering is terminated for any reason not attributable
to the action or inaction of the Agent, the Agent shall be paid the fees due to
the date of such termination pursuant to subparagraphs (a) and (b) below.
If all conditions precedent to the consummation of the Offering are
satisfied, the Company agrees to issue, or have issued, the Shares sold in the
Offering and to release for delivery certificates for such Shares on the Closing
Date (as hereinafter defined) against payment to the Company by any means
authorized pursuant hereto; provided, however, that no funds shall be released
to the Company until the conditions specified in Section 7A hereof shall have
been complied with to the reasonable satisfaction of the Agent and their
counsel. The release of Shares against payment therefor shall be made on a date
and at a place acceptable to the Company, the Bank and the Agent. Certificates
for shares shall be delivered directly to the purchasers in accordance with
their directions. The date upon which the Company shall release or deliver the
Shares sold in the Offering, in accordance with the terms herein, is called the
"Closing Date."
The Agent shall receive the following compensation for its services
hereunder:
(a) An advisory fee of $10,000. Such fees shall be deemed to have been
earned and shall be applied against the fees pursuant to subsection (b), below.
(b) (i) 0% of the aggregate actual purchase price of the stock sold
to officers, directors and employees of the Bank;
(ii) 4.0% of the aggregate actual purchase price of the stock sold
to investors who are included on the lists provided by the directors in
conjunction with the Community Offering and who placed their orders with ▇▇▇▇;
and
(iii) 7.0% of the aggregate actual purchase price of the stock sold
to investors in conjunction with the Community Offering; and
(iv) In the event that a syndicate of selected broker-dealers are
used to assist in the Community Offering, the fee for such shares be 7.0% of the
aggregate actual purchase price of the securities sold through such syndicate.
▇▇▇▇ will pass on to such selected broker-dealers who assist in the Community
Offering an amount competitive with gross underwriting discounts charged at
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such time for comparable amounts of stock sold at a comparable price per share
in a similar market environment. Fees with respect to purchases effected through
selected broker-dealers other than ▇▇▇▇ shall be transmitted by ▇▇▇▇ to such
selected broker-dealer. The decision to utilize selected broker-dealers will be
made by the Company upon consultation with the Underwriter with due diligence
regard to the Company's stock distribution strategy.
(v) In the event that the Company utilizes a syndicate of selected
broker-dealers to sell Shares to institutional investors in the institutional
offering, which may include KBW, the fee for such shares shall be 7.0% of the
aggregate actual purchase price of the securities sold through such syndicate.
▇▇▇▇ will pass on to such selected broker-dealers who assist in the
institutional offering an amount competitive with gross underwriting discounts
charged at such time for comparable amounts of stock sold at a comparable price
per share in a similar market environment. Fees with respect to purchases
effected through selected institutional broker-dealers other than ▇▇▇▇ shall be
transmitted by ▇▇▇▇ to such selected broker-dealer. The decision to utilize
selected broker-dealers to offer and sell shares to institutional investors will
be made by the Company upon consultation with ▇▇▇▇ with due regard to the
Company's stock distribution strategy.
Full payment of Agent's actual and accountable expenses, advisory fees
and compensation shall be made in next day funds on the earlier of the Closing
Date or a determination by the Company to terminate or abandon the offering.
SECTION 3. PROSPECTUS; OFFERING. The Shares are to be offered in the
Offering at $10.00 per share.
SECTION 4. REPRESENTATIONS AND WARRANTIES. The Company and the Bank
jointly and severally represent and warrant to and agree with the Agent as
follows:
(a) The Holding Company and the Bank have all such power, authority,
authorizations, approvals and orders as may be required to enter into this
Agreement, to carry out the provisions and conditions hereof and to issue and
sell the capital stock of the Bank to the Holding Company and the Shares to be
sold by the Holding Company as provided herein and as described in the
Prospectus. The consummation of the Offering, the execution, delivery and
performance of this Agreement and the consummation of the transactions herein
contemplated have been duly and validly authorized by all necessary corporate
action on the part of the Holding Company and the Bank and this Agreement has
been validly executed and delivered by the Holding Company and the Bank and is
the valid, legal and binding agreement of the Holding Company and the Bank
enforceable in accordance with its terms, except to the extent, if any, that the
provisions of Sections 8 and 9 hereof may be unenforceable as against public
policy, and except to the extent that such enforceability may be limited by
bankruptcy laws, insolvency laws, or other laws affecting the enforcement of
creditors' rights generally, or the rights of creditors of financial
institutions insured by the FDIC (including the laws relating to the rights of
the contracting parties to equitable remedies).
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(b) As of the Closing Date, the Bank shall have completed all
conditions precedent to the Offering in accordance with the Prospectus and shall
have complied in all material respects with applicable laws, regulations (except
as modified or waived in writing by Regulatory Agencies), decisions and orders,
including all terms, conditions, requirements and provisions precedent to the
Offering imposed upon it by the Regulatory Agencies as set forth in the
correspondence received from the Regulatory Agencies.
(c) The Registration Statement was declared effective by the Commission
on _________ __, 1999; and no stop order has been issued with respect thereto
and no proceedings therefore have been initiated or to the best knowledge of the
Bank threatened by the Commission. At the time the Registration Statement,
including the Prospectus contained therein (including any amendment or
supplement thereto), became effective, the Registration Statement complied as to
form in all material respects with the requirements of the 1933 Act and the
regulations promulgated thereunder and the Registration Statement including the
Prospectus contained therein (including any amendment or supplement thereto),
any Blue Sky Application or any Sales Information (as such terms are defined in
Section 8 hereof) authorized by the Holding Company or the Bank for use in
connection with the Offering did not contain an untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
to make the statements therein, in light of the circumstances under which they
were made, not misleading, and at the time any Rule 424(b) or (c) Prospectus was
filed with or mailed to the Commission for filing and at the Closing Date, the
Registration Statement including the Prospectus contained therein (including any
amendment or supplement thereto) and any Blue Sky Application or any Sales
Information authorized by the Holding Company or the Bank for use in connection
with the Offering will not contain an untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements therein,
in light of the circumstances under which they were made, not misleading;
provided, however, that the representations and warranties in this Section 4A
shall not apply to statements or omissions made in reliance upon and in
conformity with written information furnished to the Holding Company or the Bank
by the Agent expressly regarding the Agent for use under the caption "Sales
Agent" or written statements or omissions from any sales information or
information filed pursuant to state securities or blue sky laws or regulations
regarding the Agent.
(d) The OCC application, including the Prospectus, was approved by the
OCC on ________ __, 1999. At the time of the approval of the Application,
including the Prospectus, by the OCC (including any amendment or supplement
thereto) and at all times subsequent thereto until the Closing Date, the
Application, including the Prospectus, will comply as to form in all material
respects with all applicable rules and regulations of the OCC (except as
modified or waived in writing by the OCC). The Application, including the
Prospectus (including any amendment or supplement thereto), does not include any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading; provided, however,
that representations or warranties in this subsection (d) shall not apply to
statements or omissions made in reliance upon and in conformity with written
information furnished to the Holding Company by the Agent expressly regarding
the Agent for use in the Prospectus contained in the Application under the
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caption ("Sales Agent") or written statements or omissions from any sales
information filed pursuant to state securities or blue sky laws or regulations
regarding the Agent.
(e) No order has been issued by the Commission, the OCC, the FRB or the
FDIC (and hereinafter reference to the FDIC shall include the BIF), or any state
regulatory authority, preventing or suspending the use of the Prospectus and no
action by or before any such government entity to revoke any approval,
authorization or order of effectiveness related to the Offering or the
Application is, to the best knowledge of the Bank or the Holding Company,
pending or threatened.
(f) At the Closing Date, the Offering will have been adopted by the
Boards of Directors of both the Holding Company and the Bank, and the Holding
Company and the Bank will have completed all conditions precedent to the
Offering specified in the Applications and approvals from the Regulatory
Agencies, and the offer and sale of the Shares will have been conducted in all
material respects in compliance with all applicable laws, regulations, decisions
and orders, including all terms, conditions, requirements and provisions
precedent to the Offering imposed upon the Holding Company or the Bank by the
Regulatory Agencies, the Commission or any regulatory authority, and in the
manner described in the Prospectus. At the Closing Date, to the best knowledge
of the Holding Company and the Bank, no person will have sought to obtain review
of the final action of the Regulatory Agencies in approving the Applications
pursuant to any applicable state or federal statute or regulation.
(g) The Holding Company has filed with the FRB the Holding Company
Application and has received, as of the Closing Date, approval of its
acquisition of the Bank from the FRB.
(h) ▇▇▇▇▇ ▇▇▇▇▇▇ & Company, LLP, which certified the financial
statements filed as part of the Registration Statement and the Applications,
have advised the Holding Company and the Bank in writing that they are, with
respect to the Holding Company and the Bank, independent certified public
accountants within the meaning of the Code of Professional Ethics of the
American Institute of Certified Public Accountants and under the 1933 Act and
the regulations promulgated thereunder.
(i) The financial statements and the schedules and notes thereto which
are included in the Registration Statement and which are a part of the
Prospectus present fairly the financial position and retained earnings of the
Holding Company as of the dates indicated and the results of operations and cash
flows for the periods specified. The financial statements comply in all material
respects with generally accepted accounting principles ("GAAP") applied on a
consistent basis during the periods presented except as otherwise noted therein
and present fairly in all material respects the information required to be
stated therein and are consistent with the most recent financial statements and
other reports filed by the Bank with the Regulatory Agencies except that
accounting principles employed in such filings conform to requirements of such
authorities and not necessarily to GAAP. The other financial statistical and
pro forma information and related notes included in the Prospectus fairly
present the information shown therein on a basis consistent with the audited
and unaudited financial statements included in the Prospectus, and as to the
pro forma adjustments, the adjustments made therein have been properly applied
on the basis described therein.
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(j) Since the respective dates as of which information is given in the
Registration Statement, including the Prospectus: (i) there has not been any
material adverse change in the financial condition or in the management,
earnings, capital, properties or business affairs of the Holding Company or the
Bank considered as one enterprise, whether or not arising in the ordinary course
of business, (ii) there has not been any material change in total assets,
liabilities or equity from the amount set forth in the Prospectus; nor has the
Holding Company issued any securities or incurred any liability or obligation
for borrowings other than set forth in the Prospectus; (iii) there has not been
any material transactions entered into by the Holding Company or the Bank, other
than those set forth in the Prospectus; and (iv) the capitalization,
liabilities, assets, properties and business of the Holding Company and the Bank
conform in all material respects to the descriptions thereof contained in the
Prospectus and, neither the Bank nor the Holding Company has any material
liabilities of any kind, contingent or otherwise, except as set forth in or
contemplated by the Registration Statement and the Prospectus.
(k) The Holding Company is a corporation duly organized and in good
standing under the laws of the State of Ohio, with corporate power and authority
to own its properties and to conduct its business as described in the
Prospectus, and is duly qualified to transact business and is in good standing
in each jurisdiction in which the conduct of its business requires such
qualification unless the failure to qualify in one or more of such jurisdictions
would not have a material adverse effect on the financial condition, earnings,
capital, properties or business affairs of the Holding Company and the Bank
considered as a whole.
(l) The Bank is a bank in organization and has all conditional
approvals to transact its business. At the closing, the Bank will be a duly
organized and validly existing national banking association, with FDIC insurance
of accounts and duly authorized to conduct its business as described in the
Prospectus; the activities of the Bank are permitted by the rules, regulations
and practices of the OCC and the FDIC; the Bank has or will obtain all licenses,
permits and other governmental authorizations required for the conduct of its
business except those that individually or in the aggregate would not materially
adversely affect the financial condition of the Holding Company and the Bank
taken as a whole; all such licenses, permits and other governmental
authorizations are in full force and effect and the Bank is in good standing
under the laws of the United States and is or will be duly qualified as a
foreign corporation to transact business in each jurisdiction in which failure
to so qualify would have a material adverse effect upon the financial condition,
earnings, capital, properties or business affairs of the Bank; all of the issued
and outstanding capital stock of the Bank after the Offering will be duly and
validly issued and fully paid and nonassessable; and the Holding Company will
directly own all of such capital stock free and clear of any mortgage, pledge,
lien, encumbrance, claim or restriction. The Bank does not own equity securities
or any equity interest in any other business enterprise except as described in
the Prospectus.
(m) The Bank is a member of the Federal Reserve Bank; the deposit
accounts of the Bank are insured by the FDIC up to applicable limits.
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(n) Upon the completion of the Offering, the authorized, issued and
outstanding equity capital of the Holding Company will be as described in the
Prospectus under the caption "Capitalization," and no shares of Common Shares
have been or will be issued and outstanding prior to the Closing Date; the
shares of Common Shares to be subscribed for in the Offering have been duly and
validly authorized for issuance, and when issued and delivered by the Holding
Company against payment of the consideration calculated as set forth in the
Prospectus, will be duly and validly issued and fully paid and nonassessable;
the issuance of the shares of Common Shares is not subject to preemptive rights;
and the terms and provisions of the shares of Common Shares will conform in all
material respects to the description thereof contained in the Prospectus. Upon
issuance of the Shares, good title to the Shares will be transferred from the
Holding Company to the purchaser thereof against payment therefore, subject to
such claims as may be asserted against the purchasers thereof by third party
claimants.
(o) As of the date hereof and as of the Closing Date, neither the
Holding Company nor the Bank is in violation of its certificate of incorporation
or articles of association, respectively, or its bylaws or in material default
in the performance or observance of any obligation, agreement, covenant, or
condition contained in any contract, lease, loan agreement, indenture or other
instrument to which it is a party or by which it, or any of its property, may be
bound which would result in a material adverse change in the condition
(financial or otherwise), earnings, capital, properties or business affairs of
the Holding Company or Bank considered as one enterprise or which would
materially affect their properties or assets. The consummation of the
transactions herein contemplated will not (i) conflict with or constitute a
breach of, or default under, the certificate of incorporation and bylaws of the
Holding Company, the articles of association and bylaws of the Bank, or
materially conflict with or constitute a material breach of, or default under
any material contract, lease or other instrument to which the Holding Company or
the Bank has a beneficial interest, or any applicable law, rule, regulation or
order that is material to the financial condition of the Holding Company and the
Bank on a consolidated basis; (ii) violate any authorization, approval,
judgment, decree, order, statute, rule or regulation applicable to the Holding
Company or the Bank except for such violations which would not have a material
adverse effect on the financial condition and results of operations of the
Holding Company and the Bank on a consolidated basis; or (iii) result in the
creation of any material lien, charge or encumbrance upon any property of the
Holding Company or the Bank.
(p) No material default exists, and no event has occurred which with
notice or lapse of time, or both, would constitute a material default on the
part of the Holding Company or the Bank, in the due performance and observance
of any term, covenant or condition of any indenture, mortgage, deed of trust,
note, bank loan or credit agreement or any other material instrument or
agreement to which the Holding Company or the Bank is a party or by which any of
them or any of their property is bound or affected in any respect which, in any
such case, is material to the Holding Company or the Bank considered as one
enterprise, and such agreements are in full force and effect; and no other party
to any such agreements has instituted or, to the best knowledge of the Holding
Company or the Bank, threatened any action or proceeding wherein the Holding
Company or the Bank is alleged to be in default thereunder under circumstances
where such action or proceeding,
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if determined adversely to the Holding Company or the Bank, as the case may be,
would have a material adverse effect upon the Holding Company and the Bank
considered as one enterprise.
(q) The Holding Company and the Bank have good and marketable title to
all assets which are material to the business of the Holding Company and the
Bank and to those assets described in the Prospectus as owned by them free and
clear of all material liens, charges, encumbrances, restrictions or other
claims, except such as are described in the Prospectus or which do not have a
material adverse effect on the business of the Holding Company and the Bank
taken as a whole; and all of the leases and subleases which are material to the
business of the Holding Company and the Bank, as described in the Registration
Statement or Prospectus, are in full force and effect.
(r) Except as, described in the Prospectus, the Holding Company and the
Bank are not in material violation of any directive from the OCC, the FRB, the
FDIC, the Commission or any other agency to make any material change in the
method of conducting their respective businesses; the Holding Company and the
Bank have conducted and are conducting their respective businesses so as to
comply in all material respects with all applicable statutes and regulations
(including, without limitation, regulations, decisions, directives and orders of
the OCC, the FRB, the Commission and the FDIC) and except as set forth in the
Prospectus, there is no charge, investigation, action, suit or proceeding before
or by any court, regulatory authority or governmental agency or body pending or,
to the best knowledge of either the Holding Company or the Bank, threatened,
which would reasonably be expected to materially and adversely affect the
Offering, the performance of this Agreement, or the consummation of the
transactions contemplated as described in the Registration Statement, or which
would reasonably be expected to result in any material adverse change in the
financial condition or in the earnings, capital, properties or business affairs
of the Holding Company and the Bank considered as one enterprise.
(s) Neither the Bank nor the Holding Company has relied on the Agent or
the Agent's counsel with respect to any legal, tax, or accounting advice in
connection with the Offering.
(t) The Holding Company and the Bank have timely filed all required
federal and state tax returns, have paid all taxes that have become due and
payable in respect of such returns, except where permitted to be extended, have
made adequate reserves for similar future tax liabilities and no deficiency has
been asserted with respect thereto by any taxing authority.
(u) No approval, authorization, consent or order of any regulatory or
supervisory or other public authority is required for the execution and delivery
by the Holding Company and the Bank of this Agreement, or the issuance of the
Shares, except for the approval of the Regulatory Agencies and the Commission
(which have been received) and any necessary qualification, notification, or
registration or exemption under the securities or blue sky laws of the various
states in which the shares are to be offered and except as may be required under
the rules and regulations of The Nasdaq Stock Market, Inc. ("NASDAQ") or the
NASD.
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(v) The Holding Company and the Bank have made appropriate arrangements
for placing the funds received from subscriptions for Shares in the designated
subscription account at the Champaign National Bank & Trust (the "Escrow Agent")
until the minimum number of Shares are sold and paid for, with provision for
refund to the purchasers in the event that the Offering is not completed for
whatever reason or for delivery to the Holding Company if all Shares are sold.
(w) Prior to the Offering, neither the Holding Company nor the Bank
has: (i) issued any securities (except as disclosed in the Prospectus); (ii) had
any material dealings with respect to sales of securities with any member of the
NASD, or any person related to or associated with such member, other than
discussions and meetings relating to the proposed Offering and routine purchases
and sales of U.S. government and agency and other securities; (iii) entered into
a financial or management consulting agreement except as contemplated hereunder
(except as disclosed in the Prospectus); or (iv) engaged any intermediary
between the Agent and the Holding Company and the Bank in connection with the
offering of Shares and no person is being compensated in any manner for such
service.
(x) To the best knowledge of the Holding Company and the Bank, neither
the Holding Company, the Bank nor the employees of the Holding Company or the
Bank have made any payment of funds of the Holding Company or the Bank as a loan
to any person for the purchase of the Shares.
Any certificates signed by an officer of the Holding Company or the
Bank and delivered to the Agent or its counsel that refer to this Agreement
shall be deemed to be a representation and warranty by the Holding Company or
the Bank to the Agent as to the matters covered thereby with the same effect as
if such representation and warranty were set forth herein.
SECTION 5. REPRESENTATIONS AND WARRANTIES.
▇▇▇▇ represents and warrants to the Company and the Bank that:
(a) it is a corporation and is validly existing in good standing under
the laws of the State of New York and licensed to conduct business in the State
of Ohio and that ▇▇▇▇ is an unincorporated division thereof with full power and
authority to provide the services to be furnished to the Bank and the Company
hereunder.
(b) The execution and delivery of this Agreement and the consummation
of the transactions contemplated hereby have been duly and validly authorized by
all necessary action on the part of the Agent, and this Agreement has been duly
and validly executed and delivered by the Agent and is a legal, valid and
binding agreement of the Agent, enforceable in accordance with its terms.
(c) Each of the Agent and its employees, agents and representatives who
shall perform any of the services hereunder shall be duly authorized and
empowered, and shall have all licenses, approvals and permits necessary to
perform such services; and the Agent is a registered selling agent
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in each of the jurisdictions in which the Shares are to be offered by the
Company in reliance upon the Agent as a registered selling agent as set forth in
the blue sky memorandum prepared with respect to the Offering.
(d) The execution and delivery of this Agreement by the Agent, the
consummation of the transactions contemplated hereby and compliance with the
terms and provisions hereof will not conflict with, or result in a breach of,
any of the terms, provisions or conditions of, or constitute a default (or an
event which with notice or lapse of time or both would constitute a default)
under, the articles of incorporation or bylaws of the Agent or any agreement,
indenture or other instrument to which the Agent is a party or by which it or
its property is bound.
(e) No approval of any regulatory or supervisory or other public
authority is required in connection with the Agent's execution and delivery of
this Agreement, except as may have been received.
(f) There is no suit or proceeding or charge or action before or by any
court, regulatory authority or government agency or body or, to the knowledge of
the Agent, pending or threatened, which might materially adversely affect the
Agent's performance of this Agreement.
SECTION 5.L COVENANTS OF THE COMPANY AND THE BANK. The Company and the
Bank hereby jointly and severally covenant with KBW as follows:
(a) The Holding Company has filed the Registration Statement with the
Commission. The Holding Company will not, at any time after the date the
Registration Statement is declared effective, file any amendment or supplement
to the Registration Statement without providing the Agent and its counsel an
opportunity to review such amendment or file any amendment or supplement to
which amendment the Agent or its counsel shall reasonably object.
(b) The Bank has filed the Applications with the Regulatory Agencies.
The Bank will not, at any time after the date an Application is approved, file
any amendment or supplement to an Application without providing the Agent and
its counsel an opportunity to review such amendment or supplement or file any
amendment or supplement to which amendment or supplement the Agent or its
counsel shall reasonably object.
(c) The Holding Company and the Bank will use their best efforts to
cause any post-effective amendment to the Registration Statement to be declared
effective by the Commission and any post-effective amendment to an Application
to be approved by the Regulatory Agencies, and will immediately upon receipt of
any information concerning the events listed below notify the Agent (i) when the
Registration Statement, as amended, has become effective; (ii) when an
Application, as amended, has been approved by the Regulatory Agencies; (iii) of
the receipt of any comments from the Commission, a Regulatory Agency or any
other governmental entity with respect to the Offering or the transactions
contemplated by this Agreement; (iv) of any request by the Commission, a
Regulatory Agency or any other governmental entity for any amendment or
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supplement to the Registration Statement or an Application or for additional
information; (v) of the issuance by the Commission, a Regulatory Agency or any
other governmental agency of any order or other action suspending the Offering
or the use of the Registration Statement or the Prospectus or any other filing
of the Holding Company and the Bank under applicable regulations or other
applicable law, or the threat of any such action; (vi) of the issuance by the
Commission, any Regulatory Agency or any state authority of any stop order
suspending the effectiveness of the Registration Statement or of the initiation
or threat of initiation or threat of any proceedings for that purpose; or (vii)
of the occurrence of any event mentioned in paragraph (g) below. The Holding
Company and the Bank will make every reasonable effort to prevent the issuance
by the Commission, any Regulatory Agency or any state authority of any such
order and, if any such order shall at any time be issued, to obtain the lifting
thereof at the earliest possible time.
(d) The Holding Company and the Bank will provide the Agent and its
counsel with notice of its intention to file, and reasonable time to review
prior to filing, any amendment or supplement to the any Application and will not
file any such amendment or supplement to which the Agent shall reasonably object
or which shall be reasonably disapproved by its counsel.
(e) The Holding Company and the Bank will deliver to the Agent and to
its counsel conformed copies of each of the following documents, with all
exhibits: the Applications, as originally filed and of each amendment or
supplement thereto, and the Registration Statement, as originally filed and each
amendment thereto. Further, the Holding Company and the Bank will deliver such
additional copies of the foregoing documents to counsel to the Agent as may be
required for any NASD filings. In addition, the Holding Company and the Bank
will also deliver to the Agent such number of copies of the Prospectus, as
amended or supplemented, as the Agent may reasonably request.
(f) The Holding Company and the Bank will comply in all material
respects with any and all terms, conditions, requirements and provisions with
respect to the Offering and the transactions contemplated thereby imposed by the
Commission, by applicable state law and regulations, and by the 1933 Act, the
Securities Exchange Act of 1934 (the "1934 Act") and the rules and regulations
of the Commission promulgated under such statutes, to be complied with prior to
or subsequent to the Closing Date; and when the Prospectus is required to be
delivered, the Holding Company and the Bank will comply in all material
respects, at their own expense, with all material requirements imposed upon them
by the Regulatory Agencies, the Commission, by applicable state law and
regulations and by the 1933 Act, the 1934 Act and the rules and regulations of
the Commission promulgated under such statutes, in each case as from time to
time in force, so far as necessary to permit the continuance of sales or dealing
in shares of Common Shares during such period in accordance with the provisions
hereof and the Prospectus.
(g) If any event relating to or affecting the Holding Company or the
Bank shall occur, as a result of which it is necessary, in the reasonable
opinion of counsel for the Holding Company or the Bank or for the Agent, to
amend or supplement the Registration Statement or the Prospectus in order to
make them not misleading in light of the circumstances existing at the time of
its use, the
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Holding Company and the Bank will, at their expense, forthwith prepare, file
with the Commission and the Regulatory Agencies, and furnish to the Agent, a
reasonable number of copies of an amendment or amendments of, or a supplement or
supplements to, the Registration Statement and the Prospectus (in form and
substance satisfactory to counsel for the Agent after a reasonable time for
review) which will amend or supplement the Registration Statement and/or the
Prospectus so that as amended or supplemented it will not contain an untrue
statement of a material fact or omit to state a material fact necessary in order
to make the statements therein, in light of the circumstances existing at the
time, not misleading. For the purpose of this subsection, the Holding Company
and the Bank each will furnish such information with respect to itself as the
Agent may from time to time reasonably request.
(h) The Holding Company will endeavor in good faith, in cooperation
with the Agent, to register or to qualify the Shares for offering and sale under
the applicable securities laws of the jurisdictions in which the Offering will
be conducted; provided, however, that the Holding Company shall not be obligated
to file any general consent to service of process or to qualify to do business
in any jurisdiction in which it is not so qualified. In each jurisdiction where
any of the Shares shall have been registered or qualified as above provided, the
Holding Company will make and file such statements and reports in each year as
are or may be required by the laws of such jurisdictions.
The Holding Company and the Bank and each of the directors and officers
of the Holding Company and the Bank will not sell or issue, contract to sell or
otherwise dispose of, for a period of 180 days after the date hereof, without
the Agent's prior written consent, which consent shall not be unreasonably
withheld, any shares of Common Shares other than in connection with any plan or
arrangement described in the Prospectus.
(i) For the period of three years from the date of this Agreement, the
Holding Company will furnish to the Agent upon request (i) a copy of each report
of the Holding Company furnished to or filed with the Commission under the 1934
Act or any national securities exchange or system on which any class of
securities of the Holding Company is listed or quoted, (ii) a copy of each
report of the Holding Company mailed to holders of Common Shares or
nonconfidential report filed with the Commission or a Regulatory Agency or any
other supervisory or regulatory authority or any national securities exchange or
system on which any class of the securities of the Holding Company is listed or
quoted, and (iii) from time to time, such other publicly available information
concerning the Holding Company and the Bank as the Agent may reasonably request.
(j) The Holding Company and the Bank will use the net proceeds from the
sale of the Common Shares in the manner set forth in the Prospectus under the
caption "Use of Proceeds."
(k) Prior to the Closing Date, the Holding Company and the Bank will
inform the Agent of any event or circumstances of which it is aware as a result
of which the Registration Statement and/or Prospectus, or the Applications as
then supplemented or amended, would 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.
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(l) The Holding Company and the Bank will distribute the Prospectus or
other offering materials in connection with the offering and sale of the Common
Shares only as set forth in the Prospectus, and only in accordance with the 1933
Act and the 1934 Act and the rules and regulations promulgated under such
statutes, and the laws of any state in which the shares are qualified for sale.
(m) The Holding Company shall register its Common Shares under Section
12(g) of the 1934 Act, concurrent with the effective date of the Registration
Statement. The Holding Company shall maintain the effectiveness of such
registration for not less than three years.
(n) For so long as the Holding Company's Common Shares is registered
under the 1934 Act, the Holding Company will furnish to its stockholders as soon
as practicable after the end of each fiscal year such reports and other
information as are required to be furnished to its stockholders under the 1934
Act (including consolidated financial statements of the Holding Company and its
subsidiaries, certified by independent public accountants).
(o) The Holding Company will comply with the provisions of Rule 158 of
the 1933 Act.
(p) The Holding Company will use its best efforts to obtain approval
for and maintain quotation of the Common Shares on the Nasdaq Bulletin Board
effective on or prior to the Closing Date.
(q) The Bank will maintain appropriate arrangements with the Escrow
Agent for depositing all funds received from persons mailing subscriptions for
or orders to purchase Shares in the Offering as described in the Prospectus
until the Closing Date and satisfaction of all conditions precedent to the
release of the Bank's obligation to refund payments received from persons
subscribing for or ordering Shares in the Offering as described in the
Prospectus.
(r) The Holding Company will promptly register as a bank holding
company under the BHCA.
(s) The Holding Company and the Bank will take such actions and furnish
such information as are reasonably requested by the Agent in order for the Agent
to ensure compliance with the "Interpretation of the Board of Governors of the
NASD on Free Riding and Withholding."
(t) The Holding Company and the Bank will conduct their businesses in
compliance in all material respects with all applicable federal and state laws,
rules, regulations, decisions, directives and orders including, all decisions,
directives and orders of the Commission, the OCC, the FRB and the FDIC.
(u) The Bank will not amend the Offering without notifying the Agent
prior thereto.
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(v) The Holding Company will not deliver the Shares until the Holding
Company and the Bank have satisfied or caused to be satisfied each condition set
forth in Section 7A hereof, unless such condition is waived in writing by the
Agent.
SECTION 6. PAYMENT OF EXPENSES. Whether or not the Offering is
completed or the sale of the Shares by the Holding Company is consummated, the
Holding Company and the Bank will pay for all expenses incident to the
performance of this Agreement, including without limitation: (a) the preparation
and filing of the Applications; (b) the preparation, printing, filing, delivery
and shipment of the Registration Statement, including the Prospectus, and all
amendments and supplements thereto; (c) all filing fees and expenses in
connection with the qualification or registration of the Shares for offer and
sale by the Holding Company under the securities or "blue sky" laws, including
without limitation filing fees, reasonable legal fees and disbursements of
counsel in connection therewith, and in connection with the preparation of a
blue sky law survey; (d) the filing fees of the NASD; (e) all expenses related
to "road shows" and (f) the actual out-of-pocket expenses of the Agent up to a
maximum of $7,000. Subject to such maximum limitation, any such expense incurred
by the Agent shall be reimbursed by the Holding Company and the Bank, except for
its legal fees and expenses.
SECTION 7A. CONDITIONS TO THE AGENT'S OBLIGATIONS. The obligations of
the Agent hereunder and the occurrence of the Closing and the Offering are
subject to the condition that all representations and warranties and other
statements of the Holding Company and the Bank herein contained are at and as of
the commencement of the Offering and at and as of the Closing Date, true and
correct in all material respects, the condition that the Holding Company and the
Bank shall have performed in all material respects all of their obligations
hereunder to be performed on or before such dates and to the following further
conditions:
(a) The Registration Statement shall have been declared effective by
the Commission and the Applications approved by the Regulatory Agencies not
later than 5:30 p.m. on the date of this Agreement, and no stop order or other
action suspending the effectiveness of the Registration Statement shall have
been issued under the 1933 Act or proceedings therefore initiated or, to the
Company's or Bank's best knowledge, threatened by the Commission or any state
authority and no order or other action suspending the authorization for use of
the Prospectus or the consummation of the Offering shall have been issued or
proceedings therefore initiated or, to the Company's or Bank's best knowledge,
threatened by the Regulatory Agencies, the Commission, or any other governmental
body.
(b) At the Closing Date, the Agent shall have received:
(1) The favorable opinion, dated as of the Closing Date, of Squire,
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, L.L.P., special counsel for the Holding Company and the Bank,
in form and substance satisfactory to counsel for the Agent to the effect that:
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(i) The Holding Company is a corporation duly organized and
validly existing and in good standing under the laws of the United States, with
corporate power and authority to own its properties and to conduct its business
as described in the Prospectus, and to such counsel"s knowledge is duly
qualified to transact business and is in good standing in each jurisdiction in
which the conduct of its business requires such qualification and in which the
failure to qualify would have a material adverse effect on the financial
condition, earnings, capital, properties or business affairs of the Holding
Company.
(ii) The Bank is a duly organized and validly existing national
banking association with full power and authority to own its properties and to
conduct its business as described in the Prospectus and to enter into this
Agreement and perform its obligations hereunder; the activities of the Bank as
described in the Prospectus are permitted by the rules, regulations and
practices of the Regulatory Agencies; the issuance and sale of the capital stock
of the Bank to the Holding Company has been duly and validly authorized by all
necessary corporate action on the part of the Holding Company and the Bank and,
upon payment therefore as described in the Prospectus, will be validly issued,
fully paid and nonassessable; and will be owned of record and beneficially by
the Holding Company, free and clear of any mortgage, pledge, lien, encumbrance,
claim or restriction.
(iii) The Bank is a member of the Federal Reserve and the
deposit accounts of the Bank are insured by the FDIC up to the maximum amount
allowed by law and to such counsel's knowledge no proceedings for the
termination or revocation of such insurance are pending or threatened.
(iv) Upon the completion of the Offering, the authorized,
issued and outstanding capital stock of the Holding Company and the Bank will be
as set forth in the Prospectus under the caption "Capitalization," and no shares
of Common Shares have been or will be issued and outstanding prior to the
Closing Date; the shares of Common Shares of the Holding Company to be
subscribed for in the Offering have been duly and validly authorized for
issuance, and when issued and delivered by the Holding Company pursuant to the
Plan against payment of the consideration calculated as set forth in the Plan,
will be fully paid and nonassessable; and the issuance of the shares of Common
Shares is not subject to preemptive rights.
(v) The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have been duly authorized
by all necessary action on the part of the Holding Company and the Bank; and
this Agreement constitutes a valid, legal and binding obligation of each of the
Holding Company and the Bank, enforceable in accordance with its terms, except
to the extent that the provisions of Sections 8 and 9 hereof may be
unenforceable as against public policy, and except to the extent that such
enforceability may be limited by bankruptcy laws, insolvency laws, or other laws
affecting the enforcement of creditors' rights generally, or the rights of
creditors of financial institutions insured by the FDIC (including the laws
relating to the rights of the contracting parties to equitable remedies).
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(vi) Subject to the satisfaction of the conditions to the
Regulatory Agencies' approval of the Applications, no further approval,
registration, authorization, consent or other order of any federal regulatory
agency, public board or body is required in connection with the execution and
delivery of this Agreement, the offer, sale and issuance of the Shares and the
consummation of the Offering.
(vii) The Applications, including the Prospectus as filed with
the Regulatory Agencies, has been approved by the Regulatory Agencies. The FRB
has issued its order of approval under the BHCA, and the purchase by the Holding
Company of all of the issued and outstanding capital stock of the Bank has been
authorized by the FRB and no action has been taken, or to such counsel's
knowledge is pending or threatened, to revoke any such authorization or
approval.
(viii) The Registration Statement has become effective under
the 1933 Act, no stop order suspending the effectiveness of the Registration
Statement has been issued, and to the best of such counsel's knowledge no
proceedings for that purpose have been instituted or threatened.
(ix) The consummation of the Offering and the transactions
contemplated thereunder will have no material tax consequences to the Holding
Company, the Bank or any person subscribing for shares in the Offering.
(x) The terms and provisions of the shares of Common Shares
conform to the description thereof contained in the Registration Statement and
the Prospectus and such description describes in all material respects the
rights of the holders thereof, the information in the Prospectus under the
caption "Articles of Incorporation" to the extent that it constitutes matters of
law or legal conclusions has been prepared by such counsel and is accurate in
all material respects; and the forms of certificates proposed to be used to
evidence the shares of Common Shares are in due and proper form.
(xi) At the time the Application, including the Prospectus
contained therein, was approved, the Application (as amended or supplemented)
complied as to form in all material respects with the requirements of the
Regulatory Agencies and all applicable laws, rules and regulations and decisions
and orders of the Regulatory Agencies, except as modified or waived in writing
by the Regulatory Agencies, (other than the financial statements, notes to
financial statements, financial tables and other financial and statistical data
included therein as to which counsel need express no opinion and other than
compliance with state securities or Blue Sky laws as to which such counsel need
express no opinion). To such counsel's knowledge, no person has sought to obtain
regulatory or judicial review of the final action of the Regulatory Agencies
approving the Applications.
(xii) At the time that the Registration Statement became
effective (i) the Registration Statement (as amended or supplemented) (other
than the financial statements, notes to financial statements, financial tables
or other financial and statistical data included therein as to
-17-
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which counsel need express no opinion), complied as to form in all material
respects with the requirements of the 1933 Act and the rules and regulations
promulgated thereunder; and (ii) the Prospectus (other than the financial
statements, notes to financial statements, financial tables and other financial
and statistical data included therein, as to which counsel need express no
opinion) complied as to form in all material respects with the requirements of
the 1933 Act and the rules and regulations promulgated thereunder, and the
rules, regulations and decisions and orders of the Regulatory Agencies, except
as modified or waived in writing by the Regulatory Agencies.
(xiii) To the best of such counsel's knowledge, there are no
legal or governmental proceedings pending, or threatened (i) asserting the
invalidity of this Agreement or, (ii) seeking to prevent the Offering.
(xiv) The information in the Prospectus under the caption
"Supervision and Regulation", to the extent that it constitutes matters of law,
summaries and supervision of legal matters, documents or proceedings, or legal
conclusions, has been prepared by such counsel and is accurate in all material
respects (except as to the financial statements and other financial data
included therein as to which such counsel need express no opinion).
(xv) To the best of counsel's knowledge, the Holding Company
and the Bank have obtained all material licenses, permits and other governmental
authorizations required for the conduct of their respective businesses as
described in the Registration Statement and the Prospectus, except where the
failure to obtain such licenses, permits and other governmental authorizations
would not have a material adverse effect on the financial condition of the
Holding Company or the Bank considered as one enterprise, or on the earnings,
capital, properties or business affairs of the Holding Company or the Bank
considered as one enterprise, and all such licenses, permits and other
governmental authorizations are in full force and effect and the Holding Company
and the Bank are in all material respects complying therewith.
(xvi) Neither the Holding Company nor the Bank is in violation
of its certificate of incorporation or its articles of association,
respectively, or its bylaws or to the best of such counsel's knowledge, in
violation of any material obligation, agreement, covenant or condition contained
in any material contract, indenture, mortgage, loan agreement, note, lease or
other instrument to which it is a party or by which it or its property may be
bound, which violation would have a material adverse effect on the financial
condition of the Holding Company or the Bank considered as one enterprise, or on
the earnings, capital, properties or business affairs of the Holding Company and
the Bank considered as one enterprise; the execution and delivery of this
Agreement by the Holding Company and the Bank, the incurrence of the obligations
herein set forth and the consummation of the transactions contemplated herein,
will not materially conflict with, constitute a material breach of, or default
under, or result in the creation or imposition of any material lien, charge or
encumbrance upon any property or assets of the Holding Company or the Bank which
are material to their business considered as one enterprise, pursuant to any
contract, indenture, mortgage, loan agreement, note, lease or other instrument
to which the Holding Company or the Bank is a party or by which any of them may
be bound, or to which any of the property or assets of the Holding
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Company or the Bank is subject. In addition, such action will not result in any
material violation of the provisions of the certificate of incorporation or
bylaws of the Holding Company or the Bank or any material violation of any
applicable law, act, regulation or to such counsel's knowledge, order or court
order, writ, injunction or decree.
(xvii) To the best of counsel's knowledge, the Holding Company
and the Bank are not in violation in any material respect of any directive from
any Regulatory Agency to make any material change in the method of conducting
their business.
(2) The letter of Squire, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, L.L.P., special
counsel for the Holding Company and the Bank, in form and substance to the
effect that:
In addition, during the preparation of the Registration Statement and
the Prospectus, Squire, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, L.L.P. participated in conferences
with certain officers of and other representatives of the Bank and the Holding
Company, counsel to the Agent, representatives of the independent public
accountants for the Bank and the Holding Company and representatives of the
Agent at which the contents of the Registration Statement and the Prospectus and
related matters were discussed and, although Squire, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, L.L.P.
is not passing upon and does not assume the accuracy of the statements contained
in the Registration Statement and Prospectus, on the basis of the foregoing
without independent verification (relying as to materiality as to factual
matters on certificates of officers and other factual representations by the
Bank and the Holding Company), nothing has come to the attention of Squire,
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, L.L.P. that caused Squire, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, L.L.P. to
believe that the Registration Statement at the time it was declared effective by
the SEC or the Prospectus as of its date, contained or contains any untrue
statement of a material fact or omitted to state any material fact required to
be stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading (it being understood
that counsel need express no comment or opinion with respect to the financial
statements, schedules and other financial and statistical data included, or
statistical or appraisal methodology employed, in the Registration Statement or
Prospectus).
The opinion shall be limited to matters governed by the laws of the
United States or the State of Ohio. In rendering such opinion, such counsel may
rely (A) as to matters involving the application of laws of any jurisdiction
other than the United States or Ohio, to the extent such counsel deems proper
and specified in such opinion, upon the opinion of other counsel of good
standing, as long as such other opinion indicates that the Agent may rely on the
opinion, and (B) as to matters of fact, to the extent such counsel deems proper,
on certificates of responsible officers of the Company and the Bank and public
officials; provided copies of any such opinion(s) or certificates of public
officials are delivered to you together with the opinion to be rendered
hereunder by special counsel to the Company and the Bank. The opinion of such
counsel for the Company shall state that it has no reason to believe that you
are not justified in relying thereon.
(3) The favorable opinion, dated as of the Closing Date, of counsel
for the Agent, with respect to such matters as the Agent may reasonably require,
such opinion may rely as to
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matters of fact, upon certificates of officers and directors of the Holding
Company and the Bank delivered pursuant hereto or as such counsel may reasonably
request.
(c) Concurrently with the execution of this Agreement, the Agent shall
receive a letter from ▇▇▇▇▇ ▇▇▇▇▇▇ and Company LLP dated the date hereof and
addressed to the Agent, (i) such letter confirming that ▇▇▇▇▇ ▇▇▇▇▇▇ and Company
LLP is a firm of independent public accountants within the meaning of the Code
of Professional Ethics of the American Institute of Certified Public
Accountants, the 1933 Act and the regulations promulgated thereunder, and no
information concerning its relationship with or interests in the Holding Company
or the Bank is required by the Application or Item 10 of the Registration
Statement, and stating in effect that in ▇▇▇▇▇ ▇▇▇▇▇▇ and Company LLP's opinion
the financial statements of the Holding Company included in the Prospectus
comply as to form in all material respects with the applicable accounting
requirements of the 1933 Act, the 1934 Act and the related published rules and
regulations of the Commission thereunder and generally accepted accounting
principles; (ii) stating in effect that, on the basis of certain agreed upon
procedures (but not an audit examination in accordance with generally accepted
auditing standards) consisting of a reading of the latest available unaudited
interim financial statements of the Holding Company and the Bank prepared by the
Holding Company and the Bank, a reading of the minutes of the meetings of the
Board of Directors of the Holding Company and the Bank, a review of interim
financial information in accordance with Statement on Auditing Standards No. 71,
and consultations with officers of the Holding Company and the Bank responsible
for financial and accounting matters, nothing came to their attention which
caused them to believe that: (A) such unaudited financial statements, including
Recent Developments, if any, are not in conformity with generally accepted
accounting principles applied on a basis substantially consistent with that of
the audited financial statements included in the Prospectus; or (B) during the
period from the date of the latest unaudited consolidated financial statements
included in the Prospectus to a specified date not more than five business days
prior to the date hereof, there was any material increase in borrowings (defined
as securities sold under agreements to repurchase and any other form of debt
other than deposits) of the Holding Company or the Bank (other than as disclosed
in the Prospectus); or (C) there was any decrease in retained earnings of the
Bank at the date of such letter as compared with amounts shown in the latest
unaudited statement of condition included in the Prospectus or there was any
decrease in net income or net interest income of the Bank for the number of full
months commencing immediately after the period covered by the latest unaudited
income statement included in the Prospectus and ended on the latest month ending
prior to the date of the Prospectus or in such letter as compared to the
corresponding period in the preceding year; and (iii) stating that, in addition
to the audit examination referred to in its opinion included in the Prospectus
and the performance of the procedures referred to in clause (ii) of this
subsection (D), they have compared with the general accounting records of the
Holding Company and/or the Bank, as applicable, which are subject to the
internal controls of the Holding Company and/or the Bank, as applicable,
accounting system and other data prepared by the Holding Company and/or the
Bank, as applicable, directly from such accounting records, to the extent
specified in such letter, such amounts and/or percentages set forth in the
Prospectus as the Agent may reasonably request, and they have found such amounts
and percentages to be in agreement therewith (subject to rounding).
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(d) At the Closing Date, the Agent shall receive letters from ▇▇▇▇▇
▇▇▇▇▇▇ and Company LLP dated the Closing Date, addressed to the Agent,
confirming the statements made by its letter delivered by it pursuant to
subsection (f) of this Section 9A, the "specified date" referred to in clause
(ii)(B) thereof to be a date specified in such letter, which shall not be more
than five business days prior to the Closing Date.
(e) At the Closing Date counsel to the Agent shall have been furnished
with such documents and opinions as counsel for the Agent may require for the
purpose of enabling them to advise the Agent with respect to the issuance and
sale of the Common Shares as herein contemplated and related proceedings, or in
order to evidence the accuracy of any of the representations and warranties, or
the fulfillment of any of the conditions herein contained.
(f) At the Closing Date, the Agent shall receive a certificate of the
Chief Executive Officer and Chief Financial Officer of each of the Holding
Company and the Bank, dated the Closing Date, to the effect that (i) they have
carefully examined the Prospectus and at the time the Prospectus became
authorized for final use, the Prospectus did not contain any untrue statement of
a material fact or omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; (ii) there has not been, since the respective dates as of
which information is given in the Prospectus, any material adverse change in the
financial condition or in the management, earnings, capital, properties,
business prospects or business affairs of the Holding Company or the Bank,
considered as one enterprise, whether or not arising in the ordinary course of
business; (iii) the representations and warranties contained in Section 4 of
this Agreement are true and correct with the same force and effect as though
made at and as of the Closing Date; (iv) the Holding Company and the Bank have
complied in all material respects with all material agreements and satisfied all
conditions on its part to be performed or satisfied at or prior to the Closing
Date including the conditions contained in this Section 7A; (v) no stop order
has been issued or, to the best of their knowledge, is threatened, by the
Commission, a Regulatory Agency or any other governmental body; (vi) no order
suspending the Offering, the acquisition of all of the shares of the Bank by the
Holding Company or the effectiveness of the Prospectus has been issued and to
the best of their knowledge, no proceedings for any such purpose have been
initiated or threatened by any Regulatory Agency or any other federal or state
authority; (vii) to the best of their knowledge, no person has sought to obtain
regulatory or judicial review of the action of the OCC, FRB or FDIC in approving
the Applications.
(g) The Holding Company or the Bank shall not have sustained since the
date of the latest audited financial statements included in the Registration
Statement and Prospectus, 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 in the Registration Statement and the
Prospectus, and since the respective dates as of which information are given in
the Registration Statement and the Prospectus, there shall not have been any
material change in the long-term debt of the Holding Company or the Bank or any
material change, or any development, involving a prospective material change in
or affecting the general affairs of the management, financial position,
stockholders' equity or results of operations of the
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Holding Company or the Bank, otherwise than as set forth or contemplated in the
Registration Statement and the Prospectus, the effect of which, in any such case
described above, is in the Agent's reasonable judgment sufficiently material and
adverse as to make it impracticable or inadvisable to proceed with the Offering
or the delivery of the Shares on the terms and in the manner contemplated in the
Prospectus.
(h) Prior to and at the Closing Date: (1) in the reasonable opinion of
the Agent, there shall have been no material adverse change in the management,
financial condition or in the earnings, capital, properties or business affairs
of the Holding Company or the Bank independently, or of the Holding Company and
the Bank, considered as one enterprise, from that as of the latest dates as of
which such condition is set forth in the Prospectus, except as referred to
therein; (ii) there shall have been no material transaction entered into by the
Holding Company and the Bank, considered as one enterprise, from the latest date
as of which the financial condition of the Holding Company or the Bank is set
forth in the Prospectus other than transactions referred to or contemplated
therein; (iii) the Holding Company or the Bank shall not have received from the
OCC, FRB or the FDIC any direction (oral or written) to make any material change
in the method of conducting their business with which it has not complied in all
material respects (which direction, if any, shall have been disclosed to the
Agent) and which would reasonably be expected to have a material and adverse
effect on the management, condition (financial or otherwise) or on the earnings,
capital, properties or business affairs of the Holding Company or the Bank
considered as one enterprise; (iv) neither the Holding Company nor the Bank
shall have been in default (nor shall an event have occurred which, with notice
or lapse of time or both, would constitute a default) under any provision of any
agreement or instrument relating to any material outstanding indebtedness; (v)
no action, suit or proceedings, at law or in equity or before or by any federal
or state commission, board or other administrative agency, shall be pending or,
to the knowledge of the Holding Company or the Bank, threatened against the
Holding Company or the Bank or affecting any of their properties wherein an
unfavorable decision, ruling or finding would reasonably be expected to have a
material and adverse effect on the management, financial condition or on the
earnings, capital, properties or business affairs of the Holding Company or the
Bank, considered as one enterprise; and (vi) the Shares have been qualified or
registered for offering and sale under the securities or blue sky laws of the
jurisdictions as to which the Holding Company and the Agent shall have agreed.
(i) At or prior to the Closing Date, the Agent shall receive (i) a copy
of the letters from the OCC and FDIC approving the Applications, (ii) a copy of
the order from the Commission declaring the Registration Statement effective,
(iii) a copy of certificate of corporate existence for the Bank from the OCC,
(iv) a certificate of good standing from the State of Ohio evidencing the good
standing of the Holding Company and (v) a copy of the letter from the FRB
approving the Holding Company Application.
(j) Subsequent to the date hereof, there shall not have occurred any of
the following: (i) a suspension or limitation in trading in securities generally
on the New York Stock Exchange or American Stock Exchange or in the
over-the-counter market, or quotations halted generally on the Nasdaq Stock
Market, or minimum or maximum prices for trading have been fixed, or maximum
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ranges for prices for securities have been required by either of such exchanges
or the NASD or by order of the Commission or any other governmental authority;
(ii) a general moratorium on the operations of commercial banks or other
federally-insured financial institutions or general moratorium on the withdrawal
of deposits from commercial banks or other federally-insured financial
institutions declared by either federal or state authorities; (iii) the
engagement by the United States in hostilities which have resulted in the
declaration, on or after the date hereof, of a national emergency or war; or
(iv) a material decline in the price of equity or debt securities if the effect
of any of (i) through (iv) herein, in the Agent's reasonable judgment, makes it
impracticable or inadvisable to proceed with the Offering or the delivery of the
Shares on the terms and in the manner contemplated in the Registration Statement
and the Prospectus.
SECTION 7B. CONDITIONS TO THE HOLDING COMPANY AND THE BANK'S
OBLIGATIONS.
The obligations of the Holding Company and the Bank hereunder are
subject to the accuracy of the representations and warranties of the Agent, to
the performance by the Agent of its obligations hereunder, and to the
satisfaction of the conditions contained in Paragraph (a) of Section 7A
hereunder.
SECTION 8. INDEMNIFICATION.
(a) The Company and the Bank jointly and severally agree to indemnify
and hold harmless the Agent, its respective officers and directors, employees
and agents, and each person, if any, who controls the Agent within the meaning
of Section 15 of the 1933 Act or Section 20(a) of the 1934 Act, against any and
all loss, liability, claim, damage or expense whatsoever (including, but not
limited to, settlement expenses and the establishment of the Foundation and the
contribution of the Foundation Shares thereto by the Company), joint or several,
that the Agent or any of them may suffer or to which the Agent and any such
persons may become subject under all applicable federal or state laws or
otherwise, and to promptly reimburse the Agent and any such persons upon written
demand for any expense (including reasonable fees and disbursements of counsel)
incurred by the Agent or any of them in connection with investigating, preparing
or defending any actions, proceedings or claims (whether commenced or
threatened) to the extent such losses, claims, damages, liabilities or actions:
(i) arise out of or are based upon any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement (or any
amendment or supplement thereto), preliminary or final Prospectus (or any
amendment or supplement thereto), the Application (or any amendment or
supplement thereto), the Holding Company Application or any instrument or
document executed by the Company or the Bank or based upon written information
supplied by the Company or the Bank filed in any state or jurisdiction to
register or qualify any or all of the Shares or to claim an exemption therefrom
or provided to any state or jurisdiction to exempt the Company as a
broker-dealer or its officers, directors and employees as broker-dealers or
agent, under the securities laws thereof (collectively, the "Blue Sky
Application"), or any document, advertisement, oral statement or communication
("Sales Information") prepared, made or executed by or on behalf of the Company
or the Bank with their consent or based upon written or oral information
furnished by or on behalf of the Company or the Bank, whether or not filed in
any
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jurisdiction, in order to qualify or register the Shares or to claim an
exemption therefrom under the securities laws thereof; (ii) arise out of or are
based upon the omission or alleged omission to state in any of the foregoing
documents or information a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading; or (iii) arise from any theory of
liability whatsoever relating to or arising from or based upon the Registration
Statement (or any amendment or supplement thereto), preliminary or final
Prospectus (or any amendment or supplement thereto), the Application (or any
amendment or supplement thereto), any Blue Sky Application or Sales Information
or other documentation distributed in connection with the Offering; provided,
however, that no indemnification is required under this paragraph (a) to the
extent such losses, claims, damages, liabilities or actions arise out of or are
based upon any untrue material statement or alleged untrue material statement
in, or material omission or alleged material omission from, the Registration
Statement (or any amendment or supplement thereto), preliminary or final
Prospectus (or any amendment or supplement thereto), the Application, any Blue
Sky Application or Sales Information made in reliance upon and in conformity
with information furnished in writing to the Company or the Bank by the Agent or
its counsel regarding the Agent, provided, that it is agreed and understood that
the only information furnished in writing to the Company or the Bank by the
Agent regarding the Agent is set forth in the Prospectus under the caption
"Sales Agent"; and, PROVIDED FURTHER, that neither the Company nor the Bank
should be liable under this Section 8 in respect of any losses, claims, damages,
liabilities, actions or expenses to the extent same is determined, in a final
judgment by a court of competent jurisdiction, to have resulted from the gross
negligence or bad faith of ▇▇▇▇.
(b) The Agent agrees to indemnify and hold harmless the Company and the
Bank, their directors and officers and each person, if any, who controls the
Company or the Bank within the meaning of Section 15 of the 1933 Act or Section
20(a) of the 1934 Act against any and all loss, liability, claim, damage or
expense whatsoever (including but not limited to settlement expenses), joint or
several, which they, or any of them, may suffer or to which they, or any of them
may become subject under all applicable federal and state laws or otherwise, and
to promptly reimburse the Company, the Bank, and any such persons upon written
demand for any expenses (including reasonable fees and disbursements of counsel)
incurred by them, or any of them, in connection with investigating, preparing or
defending any actions, proceedings or claims (whether commenced or threatened)
to the extent such losses, claims, damages, liabilities or actions: (i) arise
out of or are based upon any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement (or any amendment or
supplement thereto), the Application (or any amendment or supplement thereto),
the preliminary or final Prospectus (or any amendment or supplement thereto),
any Blue Sky Application or Sales Information, (ii) are based upon the omission
or alleged omission to state in any of the foregoing documents 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, or
(iii) arise from any theory of liability whatsoever relating to or arising from
or based upon the Registration Statement (or any amendment or supplement
thereto), preliminary or final Prospectus (or any amendment or supplement
thereto), the Application (or any amendment or supplement thereto), or any Blue
Sky Application or Sales Information or other documentation distributed in
connection with the Offering; provided, however, that the Agent's
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obligations under this Section 8(b) shall exist only if and only to the extent
that such untrue statement or alleged untrue statement was made in, or such
material fact or alleged material fact was omitted from, the Registration
Statement (or any amendment or supplement thereto), the preliminary or final
Prospectus (or any amendment or supplement thereto), the Application (or any
amendment or supplement thereto), any Blue Sky Application or Sales Information
in reliance upon and in conformity with information furnished in writing to the
Company or the Bank by the Agent or its counsel regarding the Agent, provided,
that it is agreed and understood that the only information furnished in writing
to the Company or the Bank by the Agent regarding the Agent is set forth in the
Prospectus under the caption "Sales Agent," provided further that the Company
and the Bank also agree that neither ▇▇▇▇, nor any of its affiliates, nor
officer, director, employee or agent of ▇▇▇▇ or any of its affiliates, nor any
person controlling ▇▇▇▇ or any of its affiliates, shall have any liability to
the Company or the Bank for or in connection with such engagement except for any
such liability for losses, claims, damages, liabilities or expenses incurred by
the Company that is finally judicially determined to have resulted from gross
negligence or bad faith of ▇▇▇▇. Notwithstanding the foregoing, ▇▇▇▇ shall not
be required to indemnify or reimburse the Company for expenses hereunder in an
amount, in the aggregate, in excess of any fees actually paid pursuant to
Section 2 above. The foregoing shall be in addition to any rights that ▇▇▇▇ or
any Agent thereof may have at common law or otherwise.
(c) Each indemnified party shall give prompt written notice to each
indemnifying party of any action, proceeding, claim (whether commenced or
threatened), or suit instituted against it in respect of which indemnity may be
sought hereunder, but failure to so notify an indemnifying party shall not
relieve it from any liability which it may have on account of this Section 8 or
otherwise. An indemnifying party may participate at its own expense in the
defense of such action. In addition, if it so elects within a reasonable time
after receipt of such notice, an indemnifying party, jointly with any other
indemnifying parties receiving such notice, may assume defense of such action
with counsel chosen by it and approved by the indemnified parties that are
defendants in such action, unless such indemnified parties reasonably object to
such assumption on the ground that there may be legal defenses available to them
that are different from or in addition to those available to such indemnifying
party. If an indemnifying party assumes the defense of such action, the
indemnifying parties shall not be liable for any fees and expenses of counsel
for the indemnified parties incurred thereafter in connection with such action,
proceeding or claim, other than reasonable costs of investigation. In no event
shall the indemnifying parties be liable for the fees and expenses of more than
one separate firm of attorneys (and any special counsel that said firm may
retain) for all indemnified parties in connection with any one action,
proceeding or claim or separate but similar or related actions, proceedings or
claims in the same jurisdiction arising out of the same general allegations or
circumstances.
(d) The agreements contained in this Section 8 and in Section 9 hereof
and the representations and warranties of the Company and the Bank set forth in
this Agreement shall remain operative and in full force and effect regardless
of: (i) any investigation made by or on behalf of the Agent or its officers,
directors or controlling persons, agent or employees or by or on behalf of the
Company or the Bank or any officers, directors or controlling persons, agent or
employees of the
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Company or the Bank; (ii) delivery of and payment hereunder for the Shares; or
(iii) any termination of this Agreement.
SECTION 9. CONTRIBUTION. In order to provide for just and equitable
contribution in circumstances in which the indemnification provided for in
Section 8 is due in accordance with its terms but is for any reason held by a
court to be unavailable from the Company, the Bank or the Agent, the Company,
the Bank and the Agent shall contribute to the aggregate losses, claims, damages
and liabilities (including any investigation, legal and other expenses incurred
in connection with, and any amount paid in settlement of, any action, suit or
proceeding, but after deducting any contribution received by the Company, the
Bank or the Agent from persons other than the other parties thereto, who may
also be liable for contribution) in such proportion so that the Agent is
responsible for that portion represented by the percentage that the fees paid to
the Agent pursuant to Section 2 of this Agreement (not including expenses) bears
to the gross proceeds received by the Company from the sale of the Shares in the
Offering, and the Company and the Bank shall be responsible for the balance. If,
however, the allocation provided above is not permitted by applicable law, then
each indemnifying party shall contribute to such amount paid or payable by such
indemnified party in such proportion as is appropriate to reflect not only such
relative fault of the Company and the Bank on the one hand and the Agent on the
other in connection with the statements or omissions which resulted in such
losses, claims, damages or liabilities (or actions, proceedings or claims in
respect thereto), but also the relative benefits received by the Company and the
Bank on the one hand and the Agent on the other from the Offering (before
deducting expenses). The relative fault shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a material
fact or the omission or alleged omission to state a material fact relates to
information supplied by the Company and/or the Bank on the one hand or the Agent
on the other and the parties' relative intent, good faith, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Company, the Bank and the Agent agree that it would not be just and
equitable if contribution pursuant to this Section 9 were determined by pro-rata
allocation or by any other method of allocation which does not take into account
the equitable considerations referred to above in this Section 9. The amount
paid or payable by an indemnified party as a result of the losses, claims,
damages or liabilities (or actions, proceedings or claims in respect thereof)
referred to above in this Section 9 shall be deemed to include any legal or
other expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action, proceeding or claim. It is expressly
agreed that the Agent shall not be liable for any loss, liability, claim, damage
or expense or be required to contribute any amount pursuant to Section 8(b) or
this Section 9 which in the aggregate exceeds the amount paid (excluding
reimbursable expenses) to the Agent under this Agreement. It is understood that
the above stated limitation on the Agent's liability is essential to the Agent
and that the Agent would not have entered into this Agreement if such limitation
had not been agreed to by the parties to this Agreement. No person found guilty
of any fraudulent misrepresentation (within the meaning of Section 11(f) of the
▇▇▇▇ ▇▇▇) shall be entitled to contribution from any person who was not found
guilty of such fraudulent misrepresentation. The obligations of the Company, the
Bank and the Agent under this Section 9 and under Section 8 shall be in addition
to any liability which the Company, the Bank and the Agent may otherwise have.
For purposes of this Section 9, each of the Agent's, the Company's
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27
or the Bank's officers and directors and agents and each person, if any, who
controls the Agent or the Company or the Bank within the meaning of the 1933 Act
and the 1934 Act shall have the same rights to contribution as the Agent, the
Company or the Bank. Any party entitled to contribution, promptly after receipt
of notice of commencement of any action, suit, claim or proceeding against such
party in respect of which a claim for contribution may be made against another
party under this Section 9, will notify such party from whom contribution may be
sought, but the omission to so notify such party shall not relieve the party
from whom contribution may be sought from any other obligation it may have
hereunder or otherwise than under this Section 9.
SECTION 10. SURVIVAL OF AGREEMENTS, REPRESENTATIONS AND INDEMNITIES.
The respective indemnities of the Company, the Bank and the Agent and the
representations and warranties and other statements of the Company, the Bank and
the Agent set forth in or made pursuant to this Agreement shall remain in full
force and effect, regardless of any termination or cancellation of this
Agreement or any investigation made by or on behalf of the Agent, the Company,
the Bank or any controlling person referred to in Section 8 hereof, and shall
survive the issuance of the Shares, and any successor or assign of the Agent,
the Company, the Bank, and any such controlling person shall be entitled to the
benefit of the respective agreements, indemnities, warranties and
representations.
SECTION 11. TERMINATION. The Agent may terminate this Agreement by
giving the notice indicated below in this Section 11 at any time after this
Agreement becomes effective as follows:
(a) In the event the Company fails to sell the required minimum number
of the Shares within the period specified by the Prospectus or as required by
applicable law, this Agreement shall terminate upon refund by the Company to
each person who has subscribed for or ordered any of the Shares the full amount
which it may have received from such person as provided in the Prospectus, and
no party to this Agreement shall have any obligation to the other hereunder,
except as set forth in ▇▇▇▇▇▇▇▇ ▇, ▇, ▇ ▇▇▇ ▇ ▇▇▇▇▇▇.
(▇) If any of the conditions specified in Section 7A shall not have
been fulfilled when and as required by this Agreement, unless waived in writing,
or by the Closing Date, this Agreement and all of the Agent's obligations
hereunder may be canceled by the Agent by notifying the Company and the Bank of
such cancellation in writing or by telegram at any time at or prior to the
Closing Date, and any such cancellation shall be without liability of any party
to any other party except as otherwise provided in Sections 2, 6, 8 and 9
hereof.
(c) If the Agent elects to terminate this Agreement as provided in this
Section, the Company and the Bank shall be notified promptly by telephone or
telegram, confirmed by letter.
(d) The Company and the Bank may terminate this Agreement in the event
the Agent is in material breach of the representations and warranties or
covenants contained in Section 5 and such breach has not been cured in a timely
fashion after the Company and the Bank have provided the Agent with notice of
such breach. The Agent may terminate this Agreement in the event the Holding
Company or the Bank, or either of them, is in material breach of the
representations and warranties
-27-
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and covenants in Sections 4 and 5.1 and such breach has not been cured in a
timely fashion after the Agent has provided the Holding Company or the Bank with
notice of such breach.
(e) This Agreement may also be terminated by mutual written consent of
the parties hereto.
SECTION 12. NOTICES. All communications hereunder, except as herein
otherwise specifically provided, shall be mailed in writing and if sent to the
Agent shall be mailed, delivered or telegraphed and confirmed to ▇▇▇▇▇▇▇ ▇▇▇▇ &
Company, ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, Attention: ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇, III (with a copy to Silver, ▇▇▇▇▇▇▇▇ & ▇▇▇▇, L.L.P., Attention: ▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇, P.C.) and, if sent to the Company and the Bank, shall be mailed,
delivered or telegraphed and confirmed to the Company and the Bank at ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, Attention: L. ▇▇▇▇▇▇ ▇▇▇▇▇, President and
Chief Executive Officer (with a copy to Squire, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, L.L.P.,
Attention: M. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Esq.).
SECTION 13. PARTIES. The Company and the Bank shall be entitled to act
and rely on any request, notice, consent, waiver or agreement purportedly given
on behalf of the Agent when the same shall have been given by the undersigned.
The Agent shall be entitled to act and rely on any request, notice, consent,
waiver or agreement purportedly given on behalf of the Company or the Bank, when
the same shall have been given by the undersigned or any other officer of the
Company or the Bank. This Agreement shall inure solely to the benefit of, and
shall be binding upon, the Agent, the Company, the Bank, and their respective
successors and assigns, and no other person shall have or be construed to have
any legal or equitable right, remedy or claim under or in respect of or by
virtue of this Agreement or any provision herein contained. It is understood and
agreed that this Agreement is the exclusive agreement among the parties hereto,
and supersedes any prior agreement among the parties and may not be varied
except in writing signed by all the parties.
SECTION 14. CLOSING. The closing for the sale of the Shares shall take
place on the Closing Date at such location as mutually agreed upon by the Agent
and the Company and the Bank. At the closing, the Company and the Bank shall
deliver to the Agent in next day funds the commissions, fees and expenses due
and owing to the Agent as set forth in Sections 2 and 6 hereof and the opinions
and certificates required hereby and other documents deemed reasonably necessary
by the Agent shall be executed and delivered to effect the sale of the Shares as
contemplated hereby and pursuant to the terms of the Prospectus.
SECTION 15. PARTIAL INVALIDITY. In the event that any term, provision
or covenant herein or the application thereof to any circumstance or situation
shall be invalid or unenforceable, in whole or in part, the remainder hereof and
the application of said term, provision or covenant to any other circumstances
or situation shall not be affected thereby, and each term, provision or covenant
herein shall be valid and enforceable to the full extent permitted by law.
SECTION 16. CONSTRUCTION. This Agreement shall be construed in
accordance with the laws of the State of Ohio.
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SECTION 17. COUNTERPARTS. This Agreement may be executed in separate
counterparts, each of which so executed and delivered shall be an original, but
all of which together shall constitute but one and the same instrument.
If the foregoing correctly sets forth the arrangement among the
Company, the Bank and the Agent, please indicate acceptance thereof in the space
provided below for that purpose, whereupon this letter and the Agent's
acceptance shall constitute a binding agreement.
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30
SECTION 18. ENTIRE AGREEMENT. This Agreement, including schedules and
exhibits hereto, which are integral parts hereof and incorporated as though set
forth in full, constitutes the entire agreement between the parties pertaining
to the subject matter hereof superseding any and all prior or contemporaneous
oral or prior written agreements, proposals, letters of intent and
understandings, and cannot be modified, changed, waived or terminated except by
a writing which expressly states that it is an amendment, modification or
waiver, refers to this Agreement and is signed by the party to be charged. No
course of conduct or dealing shall be construed to modify, amend or otherwise
affect any of the provisions hereof.
Very truly yours,
OHIO LEGACY CORP OHIO LEGACY BANK (IN ORGANIZATION)
By Its Authorized By Its Authorized
Representative: Representative:
------------------------------- ------------------------------
L. ▇▇▇▇▇▇ ▇▇▇▇▇ L. ▇▇▇▇▇▇ ▇▇▇▇▇
President and Chief Executive Officer President and Chief Executive Officer
Accepted as of the date first above written
▇▇▇▇▇▇▇ ▇▇▇▇ & COMPANY, A DIVISION OF
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, INC.
By Its Authorized
Representative:
-------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ III
Senior Vice President
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31
EXHIBIT A
LETTER AGREEMENT
32
[▇▇▇▇▇▇▇ ▇▇▇▇ & COMPANY LETTERHEAD]
September 7, 1999
Mr. L. ▇▇▇▇▇▇ ▇▇▇▇▇
Ohio Legacy Corp
President & CEO
▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Dear ▇▇. ▇▇▇▇▇:
We understand that it is the intention of Ohio Legacy Corp (the "Company"), to
conduct an offering to sell Common Stock in an amount anticipated to be a
minimum of $9,000,000 and a maximum of $12,000,000, in connection with the
formation of a de novo bank. Of this amount, we understand that insiders intend
to purchase approximately $1,500,000 and the remaining amount will be sold in a
direct community offering (the "Direct Community Offering"). Shares may also be
sold in the Community Offering by a syndicate of broker dealers (the "Syndicated
Offering") and if necessary to institutional investors in an Institutional
Offering (the "Institutional Offering" and together with the Direct Community
Offering, and the Syndicated Offering, the "Offering"). This proposal relates
solely to the Direct Community Offering.
This letter hereby confirms the interest of ▇▇▇▇▇▇▇ ▇▇▇▇ & Company ("▇▇▇▇"), A
Division of ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇, Inc., and its parent company ▇▇▇▇▇,
▇▇▇▇▇▇▇▇ and ▇▇▇▇▇, Inc. ("KBW") (for purposes of this letter, ▇▇▇▇ and KBW are
collectively referred to herein as the "Underwriter") in acting as the Company's
exclusive underwriter/stock marketing agent in connection with the Direct
Community Offering. For purposes of this letter, it is understood that employees
of ▇▇▇▇/KBW will be actively involved in the Offering and that references to the
Underwriter shall include employees of ▇▇▇▇ and KBW. This letter sets forth
selected terms of our engagement.
1. OFFERING SERVICES. The Underwriter will act as lead manager in the Direct
Community Offering to be conducted on a best efforts basis. The Direct Community
Offering will be conducted through a direct solicitation of persons located in
North Central Ohio. If necessitated by market and other conditions, the
Underwriter may form a syndicate of selected broker-dealers to assist in the
offering of the Common Stock. The decision to utilize selected broker-dealers
will be made by the Company upon consultation with the Underwriter.
33
Mr. L. ▇▇▇▇▇▇ ▇▇▇▇▇
August 20, 1999
Page 2 of 7
As the Company's underwriter/stock marketing agent, the Underwriter will provide
the Company with a comprehensive program of services designed to promote an
orderly, efficient and cost-effective distribution. The Underwriter will provide
financial and logistical advice to the Company concerning the Offering and
related issues.
The Underwriter further agrees to provide at no charge to the Company financial
advisory assistance for a period of one year following completion of the
Offering, including general advice on the market for bank stocks and the stock
of the Company, shareholder enhancement methods and other related matters.
Following this initial one-year term, if both parties wish to continue the
relationship, a fee will be negotiated and an agreement entered into at that
time.
2. PREPARATION OF OFFERING DOCUMENTS. The Company and its counsel will draft the
Registration Statement and other materials to be used in connection with the
Offering. The Underwriter will attend meetings to review these documents and
assist your counsel with their preparation. The Registration Statement will be
in a form reasonably satisfactory to each of us and our counsel.
3. DUE DILIGENCE REVIEW. Prior to the filing of the Registration Statement or
any other documents naming the Underwriter as the Company's underwriter/stock
marketing agent, the Underwriter and its representatives will undertake
substantial investigations to learn about the Company's proposed business and
operations ("due diligence review") in order to confirm information provided to
us and to evaluate information to be contained in the Company's Registration
Statement. The Company agrees that it will make available to the Underwriter all
relevant information, whether or not publicly available, which the Underwriter
reasonably requests, and will permit the Underwriter to discuss personnel and
the operations and prospects of the Company with management. The Underwriter
will treat all material non-public information as confidential. The Company
acknowledges that the Underwriter will rely upon the accuracy and completeness
of all information received from the Company, its officers, directors,
employees, agents and representatives, accountants and counsel.
The Underwriter shall furnish, as soon as practicable, to the Company such
information regarding the Underwriter as the Company may reasonably request in
writing and as shall be reasonably required in connection with any registration,
qualification or compliance with state and federal securities laws.
4. REGULATORY FILINGS. Upon satisfactory completion of the Underwriter's due
diligence review, the Company will cause a Registration Statement with respect
to the Offering to be filed with the Securities and Exchange Commission ("SEC")
and such state securities commissioners as may be determined by the Company. No
filings naming the Underwriter will be made without the prior consent of the
Underwriter, which consent shall not be unreasonably withheld.
5. AGENCY OR UNDERWRITING AGREEMENT. The specific terms of the Offering and any
broker-assisted sales services contemplated in this letter shall be set forth in
an Agency or Underwriting
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August 20, 1999
Page 3 of 7
Agreement between the Underwriter and the Company to be executed prior to
commencement of the Offering. Sales of Common Stock in the Offering will be
contingent upon, among other things, the absence of material adverse
developments and the completion of the Offering. The Agency or Underwriting
Agreement and any Selected Dealer Agreement shall be prepared by counsel for the
Underwriter. The Company, its officers and directors will agree not to offer,
sell, contract to sell or grant any option to purchase or otherwise dispose of
any Common Stock for at least 180 days after the public offering without first
obtaining the Underwriter's written consent, other than pursuant to the Omnibus
Stock Option, Ownership and Long Term Incentive Plan.
6. REPRESENTATIONS, WARRANTIES AND COVENANTS. The Underwriting Agreement will
provide for customary representations, warranties and covenants by the Company,
including, without limitation, with respect to indemnification and contribution
by the Company. This will be consistent with the indemnification set forth in
paragraph 9 herein.
7. FEES. For the services hereunder, the Company shall pay the following fees to
the Underwriter at closing unless stated otherwise:
(a) For advising the Company in connection with the Offering an
initial advisory fee of $10,000 payable upon execution of this
letter agreement. Such fee shall be applied against the fees paid
pursuant to paragraph 7(b).
(b) (i) 0% of the aggregate Actual Purchase Price of the stock sold to
officers, directors and employees of the Bank;
(ii) 4.0% of the aggregate Actual Purchase Price of the stock sold
to investors who are included on the lists provided by the
directors in conjunction with the Direct Community Offering; and
(iii) 7.0% of the aggregate Actual Purchase Price of the stock
sold to investors, who were not included on the lists provided by
the directors, in conjunction with the Direct Community Offering;
and
(iv). In the event that a syndicate of selected broker-dealers are
used to assist in the Community Offering, the fee for such shares
shall be 7.0% of the aggregate Actual Purchase Price of the
securities sold through such syndicate. The Underwriter will pass
onto such selected broker-dealers who assist in the Community
Offering an amount competitive with gross underwriting discounts
charged at such time for comparable amounts of stock sold at a
comparable price per share in a similar market environment. Fees
with respect to purchases effected through selected broker-dealers
other than the Underwriter shall be transmitted by the Underwriter
to such selected broker-dealer. The decision to utilize selected
broker-dealers will be made by the
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August 20, 1999
Page 4 of 7
Company upon consultation with the Underwriter with due regards to
the Company's stock distribution strategy.
(v). In the event that the Company utilizes a syndicate of selected
broker-dealers to sell Shares to institutional investors in the
Institutional Offering, which may include KBW, the fee for such
shares shall be 7.0% of the aggregate Actual Purchase Price of the
securities sold through such syndicate. The Underwriter will pass
onto such selected broker-dealers who assist in the Institutional
Offering an amount competitive with gross underwriting discounts
charged at such time for comparable amounts of stock sold at a
comparable price per share in a similar market environment. Fees
with respect to purchases effected through selected institutional
broker-dealers other than the Underwriter shall be transmitted by
the Underwriter to such selected broker-dealer. The decision to
utilize selected broker-dealers to offer and sell shares to
institutional investors will be made by the Company upon
consultation with the Underwriter with the Underwriter with due
regards to the Company's stock distribution strategy.
8. EXPENSES. The Company will bear those expenses of the proposed offering
customarily borne by issuers, including, without limitation, SEC, "Blue Sky" and
NASD filing and registration fees; the fees of the Company's accountants,
attorneys, transfer agent and registrar, printing, mailing and marketing
expenses associated with the Offering; the expenses of any "road shows" and
community meetings conducted in connection with the Offering; the fees and
expenses relating to the offering and sale of shares to the officers, directors
and employees of the Bank and to the private investors; the fees set forth in
Section 7; and fees for "Blue Sky" legal work. The Company shall reimburse the
underwriter for its actual out-of-pocket expenses up to a maximum of $7,000. The
Underwriter shall pay the fees and expenses of its legal counsel.
9. INDEMNIFICATION.
(a) In connection with the Underwriter's engagement (which engagement
may have commenced prior to the date hereof), the Company agrees to indemnify
and hold harmless the Underwriter and its affiliates and the respective
directors, officers, employees, agents and partners of the Underwriter and its
affiliates, and each other person controlling the Underwriter or any of its
affiliates within the meaning of either Section 15 of the Securities Act of 1933
or Section 20 of the Securities Exchange Act of 1934 (collectively, "Underwriter
Indemnified Parties") to the full extent lawful, from and against all losses,
claims, damages or liabilities resulting from any legal action, investigation or
other proceeding to which any Underwriter Indemnified Party may become subject
as a result of or arising out of this engagement and will reimburse any
Underwriter Indemnified Party for all reasonable expenses (including reasonable
counsel fees) incurred by such Underwriter Indemnified Party in connection with
investigating, defending or settling any such matter or enforcing any rights
hereunder. Notwithstanding the foregoing, the Company shall not be liable to an
Underwriter Indemnified Party in respect of any
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August 20, 1999
Page 5 of 7
loss, claim, damage, liability or expense to the extent the same is determined,
in a final judgment by a court of competent jurisdiction, to have resulted from
the gross negligence or bad faith of such Underwriter Indemnified Party. The
Company also agrees that neither the Underwriter, nor any of its affiliates, nor
officer, director, employee or agent of the Underwriter or any of its
affiliates, nor any person controlling the Underwriter or any of its affiliates,
shall have any liability to the Company for or in connection with such
engagement except for any such liability for losses, claims, damages,
liabilities or expenses incurred by the Company that is finally judicially
determined to have resulted from the Underwriter's gross negligence or bad
faith. Notwithstanding the foregoing, the Underwriter shall not be required to
indemnify or reimburse the Company for expenses hereunder in an amount, in the
aggregate, in excess of any fees paid pursuant to Section 7 above. The foregoing
shall be in addition to any rights that the Underwriter or any Underwriter
Indemnified Party may have at common law or otherwise.
(b) Upon receipt of notice of any claim or the commencement of any such
action with respect to which indemnity is to be sought, an Indemnified Party
shall notify the indemnifying party of such claim or the commencement of such
action. Such Indemnified Party shall have the right to employ counsel reasonably
acceptable to the Company to defend such claim or action.
(c) If for any reason the foregoing indemnification is unavailable to
any Indemnified Party or insufficient to hold it harmless as contemplated herein
then the Company shall contribute to the amount payable by the Indemnified Party
as a result of such loss, claim, damage, liability or expense in such proportion
as is appropriate to reflect not only the relative benefits received by the
Company and its affiliates, on the one hand, and the Underwriter and the
Indemnified Party, on the other hand, but also the relative fault of the Company
and its affiliates and the Underwriter or any Indemnified Party, as the case may
be, as well as any other relevant equitable considerations, provided, however,
that in no event shall the Underwriter be required to contribute any amount in
excess of any fees paid to it pursuant to Section 7 above.
(d) The reimbursement, indemnity and contribution by the Company or
Underwriter hereunder shall be in addition to any liability which any party may
otherwise have, and shall be binding upon and accrue to the benefit of any
successors, assigns, heirs and personal representatives of the Company, and any
Indemnified Party. The foregoing provisions relating to reimbursement,
indemnification and contribution shall survive any termination of the
Underwriter's engagement under this letter.
10. CONDITIONS. The Underwriter's willingness and obligation to proceed
hereunder shall be subject to, among other things, satisfaction of the following
conditions in the Underwriter's opinion, which opinion shall have been formed in
good faith by the Underwriter after reasonable determination and consideration
of all relevant factors: (a) full and satisfactory disclosure of all relevant
material, financial and other information in the disclosure documents; (b) no
material adverse change in the condition or operations of the Company subsequent
to the Underwriter due diligence review; and (c) no market conditions at the
time of the Offering which in the
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Mr. L. ▇▇▇▇▇▇ ▇▇▇▇▇
August 20, 1999
Page 6 of 7
Underwriter's opinion make the sale of the Common Stock by the Company
inadvisable and (d) the agreement between the Company and the Underwriter as to
the offering terms.
11. BENEFIT. No party to this letter agreement may assign its duties and
obligations hereunder without the prior written consent of the other parties.
This Agreement shall inure to the benefit of the parties hereto and their
respective successors and assigns and to the parties indemnified hereunder and
their successors and assigns, and the obligations and liabilities assumed
hereunder by the parties hereto shall be binding upon their respective
successors and assigns.
12. TERMINATION. This Agreement may be terminated in writing by either party
hereto without any obligation other than for the payment of any fees
specifically set forth herein. If terminated, all fees paid previously will be
deemed to have been earned when paid.
This letter reflects the Underwriter's present intention of proceeding to work
with the Company on its proposed Offering. It does not constitute an agreement
to underwrite securities or to serve as sales or marketing agent to the Company
or the Company, or to perform any other service, nor is it an agreement to enter
into any such agreement or a representation that market conditions will support
an offering of the Company's securities. It also does not constitute a
commitment on the part of the Company or the Underwriter except as to the
payment of certain fees as set forth in Section 7, the assumption of expenses as
set forth in Section 8 and indemnification as set forth in Section 9, all of
which shall constitute the binding obligations of the parties hereto and which
shall survive the termination of this Agreement or the completion of the
services furnished hereunder and shall remain operative and in full force and
effect. You further acknowledge that any report or analysis rendered by the
Underwriter pursuant to this engagement is rendered for use solely by the
management of the Company and its agents in connection with the Offering.
Accordingly, you agree that you will not provide any such information to any
other person without our prior written consent. The Underwriter acknowledges
that in offering the Company's securities, no person will be authorized to give
any information or to make any representation not contained in the Prospectus
and related offering materials filed as part of the Registration Statement to be
declared effective in connection with the Offering. Accordingly, the Underwriter
agrees that in connection with the Offerings it will not give any unauthorized
information or make any unauthorized representation. We will be pleased to
elaborate on any of the matters discussed in this letter at your convenience.
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August 20, 1999
Page 7 of 7
13. In case of a dispute under this agreement, it shall be governed by the law
of the State of Ohio. Any claims or disputes, arising out of this agreement,
shall be heard by a court of competent jurisdiction within the State of Ohio.
If the foregoing correctly sets forth our mutual understanding, please so
indicate by signing and returning the original copy of this letter to the
undersigned with a check in the amount of $10,000 payable to ▇▇▇▇▇▇▇ ▇▇▇▇ &
Company.
Sincerely,
▇▇▇▇▇▇▇ ▇▇▇▇ & COMPANY
A Division of ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇, Inc.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ III Date: 9/7/99
-------------------------- ---------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ III
Senior Vice President
Agreed to:
OHIO LEGACY CORP
By: /s/ L. ▇▇▇▇▇▇ ▇▇▇▇▇ Date: 9/22/99
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L. ▇▇▇▇▇▇ ▇▇▇▇▇
President and Chief Executive Officer