PLACEMENT AGREEMENT AMONG HORIZON BANCORP, HORIZON BANCORP CAPITAL TRUST III AND Dated as of December 15, 2006
Exhibit
1.1
AMONG
HORIZON
BANCORP,
HORIZON
BANCORP CAPITAL TRUST III
AND
▇.▇.
▇▇▇▇▇▇ SECURITIES INC.
________________
Dated
as
of December 15, 2006
________________
Horizon
Bancorp
$12,000,000
Preferred Securities
Floating
Rate Preferred Securities
(Liquidation
Amount $1,000 per Preferred Security)
______________________
December
15, 2006
▇.▇.
▇▇▇▇▇▇ Securities Inc.
▇▇▇
▇▇▇▇
▇▇▇▇▇▇
▇▇▇
▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies
and Gentlemen:
Horizon
Bancorp, an Indiana corporation (the “Company”), and its financing subsidiary,
Horizon Bancorp Capital Trust III, a Delaware statutory trust (the “Trust,” and
hereinafter together with the Company, the “Offerors”), hereby confirm their
agreement (this “Agreement”) with you (the “Placement Agent”), as
follows:
Section
1. Issuance
and Sale of Securities.
1.1 Introduction.
The
Offerors propose to issue and sell at the Closing (as defined in Section
2.3.1
hereof)
an aggregate of TWELVE
MILLION AND 00/100 ($12,000,000) DOLLARS
of the
Trust’s Floating Rate Preferred Securities, with a liquidation amount of $1,000
per preferred security, bearing a variable rate of interest per annum, reset
quarterly, equal to LIBOR (as defined in the Indenture (as defined below))
plus
1.65% (the “Preferred Securities”), directly or indirectly, to TWE, Ltd., an
exempted company incorporated under the laws of the Cayman Islands (the
“Purchaser”), pursuant to the terms of the Preferred Securities Subscription
Agreement entered into, or to be entered into on or prior to the Closing Date
(as defined in Section
2.3.1
hereof),
between the Offerors and the Purchaser (the “Subscription Agreement”), the form
of which is attached hereto as Exhibit
A
and
incorporated herein by this reference.
1.2 Operative
Agreements.
The
Preferred Securities shall be fully and unconditionally guaranteed on a
subordinated basis by the Company with respect to distributions and amounts
payable upon liquidation, redemption or repayment (the “Guarantee”) pursuant and
subject to the Guarantee Agreement (the “Guarantee Agreement”), to be dated as
of the Closing Date and executed and delivered by the Company and Wilmington
Trust Company, as guarantee trustee (the “Guarantee Trustee”), for the benefit
from time to time of the holders of the Preferred Securities. The entire
proceeds from the sale by the Trust to the holders of the Preferred Securities
shall be combined with the entire proceeds from the sale by the Trust to the
Company of its common securities (the “Common Securities”), and shall be used by
the Trust to
1
purchase
TWELVE
MILLION THREE HUNDRED SEVENTY-TWO THOUSAND
AND
00/100 ($12,372,000) DOLLARS
in
principal amount of the Floating Rate Junior Subordinated Notes (the “Junior
Subordinated Notes”) of the Company. The Preferred Securities and the Common
Securities of the Trust shall be issued pursuant to an Amended and Restated
Trust Agreement among Wilmington Trust Company, as property trustee (the
“Property Trustee”), and as Delaware trustee (the “Delaware Trustee”) the
Administrative Trustees named therein and the Company, to be dated as of the
Closing Date and in substantially the form heretofore delivered to the Placement
Agent (the “Trust Agreement”). The Junior Subordinated Notes shall be issued
pursuant to an Indenture (the “Indenture”), to be dated as of the Closing Date,
between the Company and Wilmington Trust Company, as indenture trustee (the
“Indenture Trustee”). The documents identified in this Section
1.2
and in
Section
1.1
are
referred to herein as the “Operative Documents.” The Preferred Securities, the
Common Securities and the Junior Subordinated Notes are collectively referred
to
as the “Securities.” All other capitalized terms used but not defined in this
Agreement shall have the meanings ascribed to them in the
Indenture.
1.3 Rights
of Purchaser.
The
Preferred Securities shall be offered and sold by the Trust, directly or
indirectly, to the Purchaser without registration of any of the Preferred
Securities, the Junior Subordinated Notes or the Guarantee under the Securities
Act of 1933, as amended (the “Securities Act”), or any other applicable
securities laws in reliance upon exemptions from the registration requirements
of the Securities Act and other applicable securities laws. The Offerors agree
that this Agreement shall be incorporated by reference into the Subscription
Agreement and the Purchaser shall be entitled to each of the benefits of the
Placement Agent and the Purchaser under this Agreement (except for the rights
of
the Placement Agent under Sections
2.1
and
2.4.1
of this
Agreement) and shall be entitled to enforce obligations of the Offerors under
this Agreement as fully as if the Purchaser were a party to this Agreement.
The
Offerors and the Placement Agent have entered into this Agreement to set forth
their understanding as to their relationship and their respective rights, duties
and obligations.
1.4 Legends.
Upon
original issuance thereof, the Preferred Securities and Junior Subordinated
Notes certificates shall each contain a legend as required pursuant to any
of
the Operative Documents, including without limitation, a legend stating that
the
offer, sale or transfer of the Preferred Securities or the Junior Subordinated
Notes, as the case may be, will be made only (a) to the issuer thereof, (b)
to a
person that the transferor reasonably believe is a “qualified institutional
buyer” (as defined in Rule 144A under the Securities Act) in a transaction
meeting the requirements of Rule 144A, or (c) to an institutional “accredited
investor” within the meaning of subparagraph (a) (1), (2), (3) or (7) of Rule
501 under the Securities Act that is acquiring the Preferred Securities or
the
Junior Subordinated Notes, as the case may be, for its own account, or for
the
account of such an “accredited investor,” for investment purposes and not with a
view to, or for offer or sale in connection with, any distribution thereof
in
violation of the Securities Act, in each case in accordance with any applicable
securities laws of any state of the United States or any other applicable
jurisdiction and, in the case of (c) above, subject to the right of the Trust
and/or the Company, as applicable, to require an opinion of counsel and other
information satisfactory to each of them.
2
Section
2. Purchase
of Preferred
Securities.
2.1 Exclusive
Rights; Purchase Price.
From the
date hereof until the Closing Date (which date may be extended by mutual
agreement of the Offerors and the Placement Agent), the Offerors hereby grant
to
the Placement Agent the exclusive right to arrange for the sale to the Purchaser
of the Preferred Securities at a purchase price equal to $1,000 per Preferred
Security. The aggregate purchase price shall be TWELVE
MILLION AND 00/100 ($12,000,000) DOLLARS
(the
“Purchase Price”), which Purchase Price is equal to 100% of the stated
liquidation amount of the Preferred Securities.
2.2 Subscription.
The
Offerors hereby agree to evidence their acceptance of the subscription by
countersigning a copy of the Subscription Agreement and returning the same
to
the Placement Agent.
2.3 Closing
and Delivery of Payment.
2.3.1 Closing;
Closing Date.
The
closing (the “Closing”) for the sale and purchase of the Preferred Securities by
the Offerors to the Purchaser shall occur at the offices of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
& ▇▇▇▇ llp,
Two
World ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, or such other place as the
parties hereto shall agree at 11:00 a.m. (New York time) on December 15, 2006,
or such other later date (not later than January 15, 2007) as the parties may
designate (such date and time of delivery and payment for the Preferred
Securities being herein called the “Closing Date”). The Preferred Securities
shall be transferred and delivered to the Purchaser, or its designee against
the
payment of the Purchase Price to the Offerors in immediately available funds
on
the Closing Date to a U.S. account designated in writing by the Company at
least
two (2) business days prior to the Closing Date.
2.3.2 Delivery.
Delivery
of the Preferred Securities shall be made at such location, and in such names
and denominations, as the Purchaser shall designate in advance of the Closing
Date. The Company and the Trust agree to have the Preferred Securities available
for inspection and checking by the Purchaser in New York, New York not later
than 1:00 P.M., New York time, on the business day prior to the Closing Date.
2.4 Placement
Agents’ Fees and Expenses.
2.4.1 Placement
Agents’ Compensation.
The
Trust shall use the proceeds from the sale of the Preferred Securities, together
with the proceeds from the sale of the Common Securities, to purchase the Junior
Subordinated Notes. In connection with the purchase of the Preferred Securities,
the Company shall pay no fees or commissions to the Placement Agent. The
Placement Agent shall be responsible for the following expenses: (i) any rating
agency costs and expenses and (ii) any fee payable to the Company’s introducing
agent (the “Introducing Agent”) for services rendered, provided, that the
Introducing Agent has an agreement with the Placement Agent (the “Fee”), but
shall not be responsible for any fees and expenses set forth in Section
2.4.2
hereof.
2.4.2 Costs
and Expenses.
The
Company hereby covenants and agrees that it shall pay or cause to be paid
(directly or by reimbursement) all costs and expenses incident to
the
3
performance
of the obligations of the Offerors under this Agreement, whether or not the
transactions contemplated herein are consummated or this Agreement is
terminated, including (i) all costs and expenses incident to the authorization,
issuance, sale and delivery of the Preferred Securities and any taxes payable
in
connection therewith; (ii) the fees and expenses of qualifying the Preferred
Securities under the securities laws of the several jurisdictions as provided
in
Section
6.4;
(iii)
the fees and expenses of the counsel, the accountants and any other experts
or
advisors retained by the Company or the Trust, which counsel fees and expenses
incurred in connection with the closing of the transactions contemplated hereby,
in an amount up to $10,000, shall be reimbursed by the Purchaser on the Closing
Date; and (iv) the fees and all reasonable expenses of the Guarantee Trustee,
the Property Trustee, the Delaware Trustee, the Indenture Trustee and any other
trustee or paying agent appointed under the Operative Documents except for
any
acceptance fee and annual administrative fees of any such trustee and the fees
and disbursements of counsel to such trustees incurred in connection with the
closing of the transactions contemplated hereby, which shall be paid by the
Purchaser.
2.4.3 Reimbursement
of Expenses.
If the
sale of the Preferred Securities provided for in this Agreement is not
consummated because any condition set forth in Section
3
to be
satisfied by either the Company or the Trust is not satisfied, because this
Agreement is terminated pursuant to Section
10
or
because of any failure, refusal or inability on the part of the Company or
the
Trust to perform all obligations and satisfy all conditions on its part to
be
performed or satisfied hereunder other than by a reason of a default by the
Placement Agent, the Company will reimburse the Placement Agent upon demand
for
all reasonable out-of-pocket expenses (including the fees and expenses of each
of the Placement Agent’s or Purchaser’s counsel) that shall have been incurred
by the Placement Agent or the Purchaser in connection with the proposed purchase
and sale of the Preferred Securities. The Company shall not in any event be
liable to the Placement Agent or the Purchaser for the loss of anticipated
profits from the transactions contemplated by this Agreement.
2.5 Failure
to Close.
If any
of the conditions to the Closing specified in this Agreement shall not have
been
fulfilled to the satisfaction of the Placement Agent or if the Closing shall
not
have occurred on or before 11:00 a.m. (New York time) on January 15, 2007,
then
each party hereto, notwithstanding anything to the contrary in this Agreement,
shall be relieved of all further obligations under this Agreement without
thereby waiving any rights it may have by reason of such nonfulfillment or
failure; provided,
however,
that
the obligations of the parties under Sections
2.4
and
8
shall
not be so relieved and shall continue in full force and effect.
Section
3. Closing
Conditions.
The
obligations of the parties under this Agreement on the Closing Date are subject
to the following conditions:
3.1 Accuracy
of Representations and Warranties.
The
representations and warranties contained in this Agreement, and the statements
of the Offerors made in any certificates pursuant to this Agreement, shall
be
accurate as of the date of delivery of the Preferred Securities.
3.2 Opinions
of Counsel.
On the
Closing Date, the Placement Agent shall have received the following favorable
opinions or certificate, as the case may be, each dated as of the
4
Closing
Date: (a) from ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & Wood llp,
special
counsel for the Placement Agent and the Purchaser and addressed to the Placement
Agent and Purchaser in substantially the form set forth on Exhibit
B-1
attached
hereto and incorporated herein by this reference, (b) either (i) an opinion
from
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇ LLP, counsel for the Offerors, or (ii) an opinion from
the General Counsel or Chief Legal Officer of the Company, or (iii) if the
Company does not have a General Counsel or Chief Legal Officer, an Officers’
Certificate from the Chief Executive Officer, President or Executive Vice
President of the Company, and the Chief Financial Officer, Treasurer or
Assistant Treasurer of the Company, in each case addressed to the Purchaser
and
the Placement Agent in substantially the form set forth on Exhibit
B-2
attached
hereto and incorporated herein by this reference, (c) from ▇▇▇▇▇▇ &
▇▇▇▇▇▇▇▇▇ LLP, tax counsel for the Offerors and addressed to the Placement
Agent
and the Purchaser in substantially the form set forth on Exhibit
B-3
attached
hereto and incorporated herein by this reference, (d) from ▇▇▇▇▇▇ ▇▇▇▇▇ LLP,
special Delaware counsel to the Trust and addressed to the Purchaser, the
Placement Agent and the Offerors, in substantially the form set forth on
Exhibit
B-4
attached
hereto and incorporated herein by this reference, and (e) from ▇▇▇▇▇▇ ▇▇▇▇▇
LLP,
special counsel to the Indenture Trustee, the Property Trustee, the Delaware
Trustee and the Guarantee Trustee and addressed to the Purchaser, the Placement
Agent and the Offerors, in substantially the form set forth on Exhibit
B-5
attached
hereto and incorporated herein by this reference. Each certificate or opinion
addressed to the Purchaser shall state that the first entity, if any, to which
the Purchaser transfers any of the Preferred Securities and, if such transferee
is a warehouse entity, the next subsequent transferee that is not a warehouse
entity (each, a “Subsequent Purchaser”), shall be entitled to rely on such
opinion.
3.3 Officer’s
Certificate.
The
Company shall have furnished to the Placement Agent and the Purchaser a
certificate of the Company, signed by the Chief Executive Officer, President
or
an Executive Vice President and by the Chief Financial Officer, Treasurer or
Assistant Treasurer of the Company, and the Trust shall have furnished to the
Placement Agent and the Purchaser a certificate of the Trust, signed by an
Administrative Trustee of the Trust, in each case dated the Closing Date, and,
in the case of the Company, as to 3.3.1
and
3.3.2
below
and, in the case of the Trust, as to 3.3.1
below:
3.3.1 the
representations and warranties in this Agreement are true and correct on and
as
of the Closing Date with the same effect as if made on the Closing Date, and
the
Company and the Trust have complied with all the agreements and satisfied all
the conditions on either of their part to be performed or satisfied at or prior
to the Closing Date; and
3.3.2 since
the
date of the Interim Financial Statements (as defined below), there has been
no
material adverse change in the condition (financial or other), earnings,
business, prospects or assets of the Company and its subsidiaries, taken as
a
whole, whether or not arising from transactions occurring in the ordinary course
of business.
3.4 No
Subsequent Change.
Subsequent to the execution of this Agreement, there shall not have been any
change, or any development involving a prospective change, in or affecting
the
condition (financial or other), earnings, business, prospects or assets of
the
Company and its subsidiaries, whether or not occurring in the ordinary course
of
business, the
5
effect
of
which is, in the Placement Agent’s or the Purchaser’s judgment, so material and
adverse as to make it impractical or inadvisable to proceed with the purchase
of
the Preferred Securities.
3.5 Purchase
Permitted by Applicable Laws; Legal Investment.
The
purchase of and payment for the Preferred Securities as described in this
Agreement and pursuant to the Subscription Agreement shall (a) not be prohibited
by any applicable law or governmental regulation, (b) not subject the Purchaser
or the Placement Agent to any penalty or, in the reasonable judgment of the
Purchaser and the Placement Agent, other onerous conditions under or pursuant
to
any applicable law or governmental regulation, and (c) be permitted by the
laws
and regulations of the jurisdictions to which the Purchaser and the Placement
Agent are subject.
3.6 Consents
and Permits.
The
Company and the Trust shall have received all consents, permits and other
authorizations, and made all such filings and declarations, as may be required
from any person or entity pursuant to any law, statute, regulation or rule
(federal, state, local and foreign), or pursuant to any agreement, order or
decree to which the Company or the Trust is a party or to which either is
subject, in connection with the transactions contemplated by this Agreement.
3.7 Information.
Prior to
or on the Closing Date, the Offerors shall have furnished to the Placement
Agent, the Purchaser and their respective counsel such further information,
certificates, opinions and documents as the Placement Agent, the Purchaser
or
their respective counsel may reasonably request.
If
any of
the conditions specified in this Section
3
shall
not have been fulfilled when and as required in this Agreement, or if any of
the
opinions, certificates and documents mentioned above or elsewhere in this
Agreement shall not be reasonably satisfactory in form and substance to the
Placement Agent, the Purchaser or their respective counsel, this Agreement
and
all the Placement Agent’s obligations hereunder may be canceled at, or any time
prior to, the Closing Date by the Placement Agent. Notice of such cancellation
shall be given to the Offerors in writing or by telephone or facsimile confirmed
in writing.
Each
certificate signed by any trustee of the Trust or any officer of the Company
and
delivered to the Placement Agent, the Purchaser or their respective counsel
in
connection with the Operative Documents and the transactions contemplated hereby
and thereby shall be deemed to be a representation and warranty of the Trust
and/or the Company, as the case may be, and not by such trustee or officer
in
any individual capacity.
Section
4. Representations
and Warranties of the Offerors.
The
Offerors jointly and severally represent and warrant to the Placement Agent
and
the Purchaser as of the date hereof and as of the Closing Date as
follows:
4.1 Securities
Laws Matters:
(i) Neither
the Company nor the Trust, nor any of their “Affiliates” (as defined in Rule
501(b) of Regulation D under the Securities Act (“Regulation D”)), nor any
person acting on any of their behalf (except for the Placement Agent, as to
which neither the Company nor the Trust make any representation) has, directly
or indirectly, made offers or
6
sales
of
any security, or solicited offers to buy any security, under circumstances
that
would require the registration under the Securities Act of any of the
Securities.
(ii) Neither
the Company nor the Trust, nor any of their Affiliates, nor any person acting
on
its or their behalf (except for the Placement Agent, as to which neither the
Company nor the Trust make any representation) has (i) offered for sale or
solicited offers to purchase the Securities, (ii) engaged in any form of general
solicitation or general advertising (within the meaning of Regulation D) in
connection with any offer or sale of any of the Securities, or (iii) engaged
in
any “directed selling efforts” within the meaning of Regulation S under the
Securities Act (“Regulation S”) with respect to the Securities.
(iii) The
Securities (i) are not and have not been listed on a national securities
exchange registered under Section 6 of the Securities Exchange Act of 1934,
as
amended (the “Exchange Act”), or quoted on a U.S. automated interdealer
quotation system and (ii) are not of an open-end investment company, unit
investment trust or face-amount certificate company that are, or are required
to
be, registered under Section 8 of the Investment Company Act of 1940, as amended
(the “Investment Company Act”), and the Securities otherwise satisfy the
eligibility requirements of Rule 144A(d)(3) promulgated pursuant to the
Securities Act (“Rule 144A(d)(3)”).
(iv) Neither
the Company nor the Trust is, and, immediately following consummation of the
transactions contemplated hereby and the application of the net proceeds
therefrom, neither the Company nor the Trust will be, an “investment company” or
an entity “controlled” by an “investment company,” in each case within the
meaning of Section 3(a) of the Investment Company Act.
(v) Neither
the Company nor the Trust has paid or agreed to pay to any person or entity,
directly or indirectly, any fees or other compensation for soliciting another
to
purchase any of the Securities.
4.2 Standing
and Qualification of the Trust.
The
Trust has been duly created and is validly existing in good standing as a
statutory trust under the Delaware Statutory Trust Act, 12 Del. C. §3801,
et
seq.
(the
“Statutory Trust Act”) with all requisite power and authority to own property
and to conduct the business it transacts and proposes to transact and to enter
into and perform its obligations under the Operative Documents to which it
is a
party. The Trust is duly qualified to transact business as a foreign entity
and
is in good standing in each jurisdiction in which such qualification is
necessary, except where the failure to so qualify or be in good standing would
not have a material adverse effect on the condition (financial or otherwise),
earnings, business, prospects or assets of the Trust, whether or not occurring
in the ordinary course of business. The Trust is not a party to, or otherwise
bound by, any agreement other than the Operative Documents. The Trust is, and
under current law will continue to be, classified for federal income tax
purposes as a grantor trust and not as an association or publicly traded
partnership taxable as a corporation.
4.3 Trust
Agreement.
The
Trust Agreement has been duly authorized by the Company and, on the Closing
Date
specified in Section
2.3.1,
will
have been duly executed and
7
delivered
by the Company and the Administrative Trustees of the Trust, and, assuming
due
authorization, execution and delivery by the Property Trustee and the Delaware
Trustee, will be a legal, valid and binding obligation of the Company and the
Administrative Trustees, enforceable against them in accordance with its terms,
subject to applicable bankruptcy, insolvency and similar laws affecting
creditors’ rights generally and to general principles of equity. Each of the
Administrative Trustees of the Trust is an employee of the Company or one of
its
subsidiary banks and has been duly authorized by the Company to execute and
deliver the Trust Agreement. To the knowledge of the Company and the Trust,
the
Trust is not in violation of any provision of the Statutory Trust
Act.
4.4 Guarantee
Agreement and the Indenture.
Each of
the Guarantee and the Indenture has been duly authorized by the Company and,
on
the Closing Date, will have been duly executed and delivered by the Company,
and, assuming due authorization, execution and delivery by the Guarantee
Trustee, in the case of the Guarantee, and by the Indenture Trustee, in the
case
of the Indenture, will be a legal, valid and binding obligation of the Company
enforceable against it in accordance with its terms, subject to applicable
bankruptcy, insolvency and similar laws affecting creditors’ rights generally
and to general principles of equity.
4.5 Preferred
Securities and Common Securities.
The
Preferred Securities and the Common Securities have been duly authorized by
the
Trust and, when issued and delivered against payment therefor on the Closing
Date to the Purchaser in accordance with this Agreement and the Subscription
Agreement, in the case of the Preferred Securities, and to the Company in
accordance with the Common Securities Subscription Agreement between the Company
and the Trust, dated as of the Closing Date, in the case of the Common
Securities, will be validly issued, fully paid and nonassessable and will
represent undivided beneficial interests in the assets of the Trust entitled
to
the benefits of the Trust Agreement, enforceable against the Trust in accordance
with their terms, subject to applicable bankruptcy, insolvency and similar
laws
affecting creditors’ rights generally and to general principles of equity. The
issuance of the Securities is not subject to preemptive or other similar rights.
On the Closing Date, all of the issued and outstanding Common Securities will
be
directly owned by the Company free and clear of any pledge, security interest,
claim, lien or other encumbrance (each, a “Lien”).
4.6 Junior
Subordinated Notes.
The
Junior Subordinated Notes have been duly authorized by the Company and, on
the
Closing Date, will have been duly executed and delivered to the Indenture
Trustee for authentication in accordance with the Indenture and, when
authenticated in the manner provided for in the Indenture and delivered to
the
Trust against payment therefor in accordance with the Junior Subordinated Note
Subscription Agreement between the Company and the Trust, dated as of the
Closing Date, will constitute legal, valid and binding obligations of the
Company entitled to the benefits of the Indenture enforceable against the
Company in accordance with their terms, subject to applicable bankruptcy,
insolvency and similar laws affecting creditors’ rights generally and to general
principles of equity.
4.7 Placement
Agreement.
This
Agreement has been duly authorized, executed and delivered by the Company and
the Trust and constitutes the legal, valid and binding obligation of the Company
and the Trust, enforceable against the Company and the Trust in accordance
with
8
its
terms, subject to applicable bankruptcy, insolvency and similar laws affecting
creditors’ rights generally and to general principles of equity.
4.8 Defaults.
Neither
the issue and sale of the Common Securities, the Preferred Securities or the
Junior Subordinated Notes, nor the purchase of the Junior Subordinated Notes
by
the Trust, the execution and delivery of and compliance with the Operative
Documents by the Company or the Trust, the consummation of the transactions
contemplated herein or therein, or the use of the proceeds therefrom, (i) will
conflict with or constitute a breach of, or a default under, the Trust Agreement
or the charter or bylaws of the Company or any subsidiary of the Company or
any
applicable law, statute, rule, regulation, judgment, order, writ or decree
of
any government, governmental authority, agency or instrumentality or court,
domestic or foreign, having jurisdiction over the Trust, or the Company or
any
of its subsidiaries, or their respective properties or assets (collectively,
“Governmental Entities”), (ii) except as set forth on Schedule
4.8,
will
conflict with or constitute a violation or breach of, or a default or Repayment
Event (as defined below) under, or result in the creation or imposition of
any
Lien upon any property or assets of the Trust, the Company or any of the
Company’s subsidiaries pursuant to any contract, indenture, mortgage, loan
agreement, note, lease or other agreement or instrument to which (A) the Trust,
the Company or any of its subsidiaries is a party or by which it or any of
them
may be bound, or (B) any of the property or assets of any of them is subject,
or
any judgment, order or decree of any court, Governmental Entity or arbitrator,
except, in the case of this clause (ii), for such conflicts, breaches,
violations, defaults, Repayment Events (as defined below) or Liens which (X)
would not, singly or in the aggregate, adversely affect the consummation of
the
transactions contemplated by the Operative Documents and (Y) would not, singly
or in the aggregate, have a material adverse effect on the condition (financial
or otherwise), earnings, business, liabilities, prospects and assets (taken
as a
whole) or business prospects of the Company and its subsidiaries taken as a
whole, whether or not occurring in the ordinary course of business (a “Material
Adverse Effect”), or (iii) except as set forth on Schedule
4.8, require
the consent, approval, authorization or order of any court or Governmental
Entity. As used herein, a “Repayment Event” means any event or condition which
gives the holder of any note, debenture or other evidence of indebtedness (or
any person acting on such holder’s behalf) the right to require the repurchase,
redemption or repayment of all or a portion of such indebtedness by the Trust
or
the Company or any of its subsidiaries prior to its scheduled
maturity.
4.9 Organization,
Standing and Qualification of the Company.
The
Company has been duly incorporated and is validly existing as a corporation
in
good standing under the laws of Indiana, with all requisite corporate power
and
authority to own, lease and operate its properties and conduct the business
it
transacts and proposes to transact, and is duly qualified to transact business
and is in good standing as a foreign corporation in each jurisdiction where
the
nature of its activities requires such qualification, except where the failure
of the Company to be so qualified would not, singly or in the aggregate, have
a
Material Adverse Effect.
4.10 Subsidiaries
of the Company.
The
Company has no subsidiaries that are material to its business, financial
condition or earnings other than those subsidiaries listed in Schedule
4.10
attached
hereto (the “Significant Subsidiaries”). Each Significant Subsidiary has been
duly organized and is validly existing and in good standing under the laws
of
the jurisdiction in which it is chartered or organized, with all requisite
power
and authority to own its properties and
9
conduct
the business it transacts and proposes to transact. Each Significant Subsidiary
is duly qualified to transact business and is in good standing as a foreign
entity in each jurisdiction where the nature of its activities requires such
qualification, except where the failure of any Significant Subsidiary to be
so
qualified would not, singly or in the aggregate, have a Material Adverse Effect.
4.11 Government
Licenses; Laws.
Each of
the Trust, the Company and each of its subsidiaries hold all necessary
approvals, authorizations, orders, licenses, certificates and permits
(collectively, “Government Licenses”) of and from Governmental Entities
necessary to conduct its respective business as now being conducted, and neither
the Trust, the Company nor any of the Company’s subsidiaries has received any
notice of proceedings relating to the revocation or modification of any such
Government License, except where the failure to be so licensed or approved
or
the receipt of an unfavorable decision, ruling or finding, would not, singly
or
in the aggregate, have a Material Adverse Effect; all of the Government Licenses
are valid and in full force and effect, except where the invalidity or the
failure of such Government Licenses to be in full force and effect, would not,
singly or in the aggregate, have a Material Adverse Effect; and the Company
and
its subsidiaries are in compliance with all applicable laws, rules, regulations,
judgments, orders, decrees and consents, except where the failure to be in
compliance would not, singly or in the aggregate, have a Material Adverse
Effect.
4.12 Stock.
Except
as set forth in Schedule
4.12,
all of
the issued and outstanding shares of capital stock of the Company and each
of
its subsidiaries are validly issued, fully paid and nonassessable; all of the
issued and outstanding capital stock of each subsidiary of the Company is owned
by the Company, directly or through subsidiaries, free and clear of any Lien,
claim or equitable right; and none of the issued and outstanding capital stock
of the Company or any subsidiary was issued in violation of any preemptive
or
similar rights arising by operation of law, under the charter or by-laws of
such
entity or under any agreement to which the Company or any of its subsidiaries
is
a party.
4.13 Property.
Except
as set forth in Schedule
4.13,
each of
the Trust, the Company and each subsidiary of the Company has good and
marketable title to all of its respective real and personal properties, in
each
case free and clear of all Liens and defects, except for those that would not,
singly or in the aggregate, have a Material Adverse Effect; and all of the
leases and subleases under which the Trust, the Company or any subsidiary of
the
Company holds properties are in full force and effect, except where the failure
of such leases and subleases to be in full force and effect would not, singly
or
in the aggregate, have a Material Adverse Effect and none of the Trust, the
Company or any subsidiary of the Company has any notice of any claim of any
sort
that has been asserted by anyone adverse to the rights of the Trust, the Company
or any subsidiary of the Company under any such leases or subleases, or
affecting or questioning the rights of such entity to the continued possession
of the leased or subleased premises under any such lease or sublease, except
for
such claims that would not, singly or in the aggregate, have a Material Adverse
Effect.
4.14 Conflicts,
Authorizations and Approvals.
Neither
the Company nor any of its subsidiaries is (i) in violation of its respective
charter, bylaws or similar organizational documents or (ii) in default in the
performance or observance of any obligation, agreement,
10
covenant
or condition contained in any contract, indenture, mortgage, loan agreement,
note, lease or other agreement or instrument to which either the Company or
any
such subsidiary is a party or by which it or any of them may be bound or to
which any of the property or assets of any of them is subject, except, in the
case of clause (ii), where such default would not, singly or in the aggregate,
have a Material Adverse Effect. No filing with, or authorization, approval,
consent, license, order, registration, qualification or decree of, any
Governmental Entity, other than those that have been made or obtained, is
necessary or required for the performance by the Trust or the Company of their
respective obligations under the Operative Documents, as applicable, or the
consummation by the Trust and the Company of the transactions contemplated
by
the Operative Documents.
4.15 Holding
Company Registration and Deposit Insurance.
The
Company is duly registered as a bank
holding company under the Bank Holding Company Act of 1956, as amended (the
“Bank
Holding Company Act”),
and the regulations of the Board of Governors of the Federal Reserve System
(the
“Federal
Reserve”),
and the
deposit accounts of the Company’s subsidiary depository institutions are insured
by the Federal Deposit Insurance Corporation (“FDIC”)
to the
fullest extent permitted by law and the rules and regulations of the FDIC,
and
no proceeding for the termination of such insurance are pending or, to the
knowledge of the Company or the Trust after due inquiry,
threatened.
4.16 Financial
Statements.
(a) The
audited consolidated financial statements (including the notes thereto) and
schedules of the Company and its consolidated subsidiaries at and for the three
fiscal years ended December 31, 2005 (the “Financial Statements”) and the
interim unaudited consolidated financial statements of the Company and its
consolidated subsidiaries at and for the quarter and nine months ended September
30, 2006 (the “Interim Financial Statements”) provided to the Placement Agent
are the most recently available audited and unaudited consolidated financial
statements of the Company and its consolidated subsidiaries, respectively,
and
fairly present in all material respects, in accordance with U.S. generally
accepted accounting principles (“GAAP”), the financial position of the Company
and its consolidated subsidiaries, and the results of operations and changes
in
financial condition as of the dates and for the periods therein specified,
subject, in the case of Interim Financial Statements, to year-end adjustments
(which are expected to consist solely of normal recurring adjustments). Such
consolidated financial statements and schedules have been prepared in accordance
with GAAP consistently applied throughout the periods involved (except as
otherwise noted therein).
(b) The
Company’s report on FRY-9C, for the period ending September 30, 2006 (the
“FRY-9C”),
provided
to the Placement Agent is the most recently available such report, and the
information therein fairly presents in all material respects the financial
position of the Company and its subsidiaries. None of the Company or any of
its
subsidiaries has been requested by a Governmental Entity to republish, restate
or refile any regulatory or financial report.
(c) Since
the
respective dates of the Financial Statements, Interim Financial Statements
and
the FRY-9C, there has not been (A) any material adverse change or
11
development
with respect to the condition (financial or otherwise), earnings, business,
assets or business prospects of the Company and its subsidiaries, taken as
a
whole, whether or not occurring in the ordinary course of business or (B)
any
dividend or distribution of any kind declared, paid or made by the Company
on
any class of its capital stock other than regular quarterly dividends on
the
Company’s common stock.
(d) The
accountants of the Company who certified the Financial Statements are
independent public accountants of the Company and its subsidiaries within the
meaning of the Securities Act and the rules and regulations of the Securities
and Exchange Commission (“SEC”) thereunder.
4.17 Regulatory
Enforcement Matters.
Except
as set forth in Schedule
4.17,
none of
the Trust, the Company nor any of its subsidiaries, nor any of their respective
officers, directors, employees or representatives, is subject or is party to,
or
has received any notice from any Regulatory Agency (as defined below) that
any
of them will become subject or party to any investigation with respect to,
any
cease-and-desist order, agreement, civil monetary penalty, consent agreement,
memorandum of understanding or other regulatory enforcement action, proceeding
or order with or by, or is a party to any commitment letter or similar
undertaking to, or is subject to any directive by, or has been a recipient
of
any supervisory letter from, or has adopted any board resolutions at the request
or suggestion of, any Regulatory Agency that, in any such case, currently
restricts in any material respect the conduct of their business or that in
any
material manner relates to their capital adequacy, their credit policies, their
management or their business (each, a “Regulatory Action”), nor has the Trust,
the Company or any of its subsidiaries been advised by any Regulatory Agency
that it is considering issuing or requesting any such Regulatory Action; and
there is no unresolved violation, criticism or exception by any Regulatory
Agency with respect to any report or statement relating to any examinations
of
the Trust, the Company or any of its subsidiaries, except where such unresolved
violation, criticism or exception would not, singly or in the aggregate, have
a
Material Adverse Effect. It meets the required capital levels for
“well-capitalized” bank holding companies established by the Federal Reserve and
in effect as of the date hereof. Each of the Company’s subsidiaries that is a
depository institution, the accounts of which are insured by the FDIC (i) is
“well-capitalized” within the meaning of 12 U.S.C. §1831o and applicable
implementing regulations thereunder; and (ii) is not, and has not been notified
by any Regulatory Agency that it is, in “troubled condition” within the meaning
of 12 U.S.C. §1831i and applicable implementing regulations thereunder. As used
herein, the term “Regulatory Agency” means any federal or state agency charged
with the supervision or regulation of depository institutions or holding
companies of depository institutions, or engaged in the insurance of depository
institution deposits, or any court, administrative agency or commission or
other
governmental agency, authority or instrumentality having supervisory or
regulatory authority with respect to the Trust, the Company or any of its
subsidiaries.
4.18 No
Undisclosed Liabilities.
None of
the Trust, the Company nor any of its subsidiaries has any material liability,
whether known or unknown, whether asserted or unasserted, whether absolute
or
contingent, whether accrued or unaccrued, whether liquidated or unliquidated,
and whether due or to become due, including any liability for taxes (and there
is no past or present fact, situation, circumstance, condition or other basis
for any present or future
12
action,
suit, proceeding, hearing, charge, complaint, claim or demand against the
Company or its subsidiaries that could give rise to any such liability), except
for (i) liabilities set forth in the Financial Statements or the Interim
Financial Statements and (ii) normal fluctuations in the amount of the
liabilities referred to in clause (i) above occurring in the ordinary
course of business of the Trust, the Company and all of its subsidiaries since
the date of the most recent balance sheet included in such Financial
Statements.
4.19 Litigation.
There is
no action, suit or proceeding before or by any Governmental Entity, arbitrator
or court, domestic or foreign, now pending or, to the knowledge of the Company
or the Trust after due inquiry, threatened against or affecting the Trust or
the
Company or any of the Company’s subsidiaries, except for such actions, suits or
proceedings that, if adversely determined, would not, singly or in the
aggregate, adversely affect the consummation of the transactions contemplated
by
the Operative Documents or have a Material Adverse Effect; and the aggregate
of
all pending legal or governmental proceedings to which the Trust or the Company
or any of its subsidiaries is a party or of which any of their respective
properties or assets is subject, including ordinary routine litigation
incidental to the business, are not expected to result in a Material Adverse
Effect.
4.20 No
Labor Disputes.
No
labor dispute with the employees of the Trust, the Company or any of its
subsidiaries exists or, to the knowledge of the executive officers of the Trust
or the Company, is imminent, except those which would not, singly or in the
aggregate, have a Material Adverse Effect.
4.21 Filings
with the SEC.
The
documents of the Company filed with the SEC in accordance with the Exchange
Act,
from and including the commencement of the fiscal year covered by the Company’s
most recent Annual Report on Form 10-K, at the time they were or hereafter
are
filed by the Company with the SEC (collectively, the “1934 Act Reports”),
complied and will comply in all material respects with the requirements of
the
Exchange Act and the rules and regulations of the SEC thereunder (the “1934 Act
Regulations”), and did not, and, at the date of this Agreement and on the
Closing Date, do not and will not include an untrue statement of a material
fact
or omit to state a material fact required to be stated therein or necessary
to
make the statements therein, in light of the circumstances under which they
were
made, not misleading; and other than such instruments, agreements, contracts
and
other documents as are filed as exhibits to the Company’s Annual Report on Form
10-K, Quarterly Reports on Form 10-Q or Current Reports on Form 8-K, there
are
no instruments, agreements, contracts or documents of a character described
in
Item 601 of Regulation S-K promulgated by the SEC to which the Company or
any of its subsidiaries is a party. The Company is in compliance with all
currently applicable requirements of the Exchange Act and the 1934 Act
Regulations that were added by the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002.
4.22 Deferral
of Interest Payments on Junior Subordinated Notes.
The
Company has no present intention to exercise its option to defer payments of
interest on the Junior Subordinated Notes as provided in the Indenture. The
Company believes that the likelihood that it would exercise its rights to defer
payments of interest on the Junior Subordinated Notes as provided in the
Indenture at any time during which the Junior Subordinated Notes are outstanding
is remote because of the restrictions that would be imposed on the Company’s
ability
13
to
declare or pay dividends or distributions on, or to redeem, purchase, acquire
or
make a liquidation payment with respect to, any of the Company’s capital stock
and on the Company’s ability to make any payments of principal, interest or
premium on, or repay, repurchase or redeem, any of its debt securities that
rank
pari
passu
in all
respects with or junior in interest to the Junior Subordinated
Notes.
4.23 Tax
Returns.
The
Company and each of the Significant Subsidiaries have timely and duly filed
all
Tax Returns (defined below) required to be filed by them, and all such Tax
Returns are true, correct and complete in all material respects. The Company
and
each of the Significant Subsidiaries have timely and duly paid in full all
material Taxes required to be paid by them (whether or not such amounts are
shown as due on any Tax Return). There are no federal, state, or other Tax
audits or deficiency assessments proposed or pending with respect to the Company
or any of the Significant Subsidiaries, and no such audits or assessments are
threatened. As used herein, the terms “Tax”
or
“Taxes”
mean
(i) all federal, state, local, and foreign taxes, and other assessments of
a
similar nature (whether imposed directly or through withholding), including
any
interest, additions to tax, or penalties applicable thereto, imposed by any
Governmental Entity, and (ii) all liabilities in respect of such amounts arising
as a result of being a member of any affiliated, consolidated, combined, unitary
or similar group, as a successor to another person or by contract. As used
herein, the term “Tax
Returns”
means
all federal, state, local, and foreign Tax returns, declarations, statements,
reports, schedules, forms, and information returns and any amendments thereto
filed or required to be filed with any Governmental Entity.
4.24 Taxes.
The
Trust is not subject to United States federal income tax with respect to income
received or accrued on the Junior Subordinated Notes, interest payable by the
Company on the Junior Subordinated Notes is deductible by the Company, in whole
or in part, for United States federal income tax purposes, and the Trust is
not,
or will not be within ninety (90) days of the date hereof, subject to more
than
a de
minimis
amount
of other taxes, duties or other governmental charges. There are no rulemaking
or
similar proceedings before the United States Internal Revenue Service or
comparable federal, state, local or foreign government bodies which involve
or
affect the Company or any subsidiary, which, if the subject of an action
unfavorable to the Company or any subsidiary, could result in a Material Adverse
Effect.
4.25 Books
and Records.
The
books, records and accounts of the Company and its subsidiaries accurately
and
fairly reflect, in reasonable detail, the transactions in, and dispositions
of,
the assets of, and the results of operations of, the Company and its
subsidiaries. The Company and each of its subsidiaries maintains a system of
internal accounting controls sufficient to provide reasonable assurances that
(i) transactions are executed in accordance with management’s general or
specific authorizations, (ii) transactions are recorded as necessary to permit
preparation of financial statements in accordance with GAAP and to maintain
asset accountability, (iii) access to assets is permitted only in accordance
with management’s general or specific authorization and (iv) the recorded
accountability for assets is compared with the existing assets at reasonable
intervals and appropriate action is taken with respect to any
differences
14
4.26 Insurance.
The
Company and the Significant Subsidiaries are insured by insurers of recognized
financial responsibility against such losses and risks and in such amounts
in
all material respects as are customary in the businesses in which they are
engaged or propose to engage after giving effect to the transactions
contemplated hereby, including, but not limited to, real or personal property
owned or leased against theft, damage, destruction, act of vandalism and all
other risks customarily insured against. All policies of insurance and fidelity
or surety bonds insuring the Company or any of the Significant Subsidiaries
or
the Company’s or Significant Subsidiaries’ respective businesses, assets,
employees, officers and directors are in full force and effect. The Company
and
each of the Significant Subsidiaries are in compliance with the terms of such
policies and instruments in all material respects. Neither the Company nor
any
Significant Subsidiary has reason to believe that it will not be able to renew
its existing insurance coverage as and when such coverage expires or to obtain
similar coverage from similar insurers as may be necessary to continue its
business at a cost that would not have a Material Adverse Effect. Within the
past twelve months, neither the Company nor any Significant Subsidiary has
been
denied any insurance coverage which it has sought or for which it has
applied.
4.27 Corporate
Funds.
The
Company and its subsidiaries or any person acting on behalf of the Company
and
its subsidiaries including, without limitation, any director, officer, agent
or
employee of the Company or its subsidiaries has not, directly or indirectly,
while acting on behalf of the Company and its subsidiaries (i) used any
corporate funds for unlawful contributions, gifts, entertainment or other
unlawful expenses relating to political activity; (ii) made any unlawful payment
to foreign or domestic government officials or employees or to foreign or
domestic political parties or campaigns from corporate funds; (iii) violated
any
provision of the Foreign Corrupt Practices Act of 1977, as amended; or (iv)
made
any other unlawful payment.
4.28 OSHA
Compliance.
Neither
the Company nor any of its subsidiaries is in violation of any federal or state
law or regulation relating to occupational safety and health and the Company
and
its subsidiaries have received all permits, licenses or other approvals required
of them under applicable federal and state occupational safety and health and
environmental laws and regulations to conduct their respective businesses,
and
the Company and each of its subsidiaries is in compliance with all terms and
conditions of any such permit, license or approval, except any such violation
of
law or regulation, failure to receive required permits, licenses or other
approvals or failure to comply with the terms and conditions of such permits,
licenses or approvals which would not, singly or in the aggregate result in
a
Material Adverse Effect.
4.29 Information.
The
information provided by the Company and the Trust pursuant to this Agreement
does not, as of the date hereof, and will not, as of the Closing Date, contain
any untrue statement of a material fact or omit to state any material fact
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading.
Section
5. Representations
and Warranties of the Placement Agent.
The
Placement Agent represents and warrants to, and agrees with, the Company and
the
Trust as follows:
15
5.1 General
Solicitation.
Neither
the Placement Agent, nor any of the Placement Agent’s affiliates, nor any person
acting on the Placement Agent’s or the Placement Agent’s Affiliate’s behalf has
engaged, or will engage, in any form of “general solicitation or general
advertising” (within the meaning of Regulation D under the Securities Act) in
connection with any offer or sale of the Preferred Securities.
5.2 Purchaser.
The
Placement Agent has made such reasonable inquiry as is necessary to determine
that the Purchaser is acquiring the Preferred Securities for its own account
and
that the Purchaser does not intend to distribute the Preferred Securities in
contravention of the Securities Act or any other applicable securities
laws.
5.3 Qualified
Purchasers.
The
Placement Agent has not offered or sold, and will not arrange for the offer
or
sale of, the Preferred Securities except (i) to those the Placement Agent
reasonably believes are institutional “accredited investors” (within the meaning
of subparagraph (a)(1), (2), (3) or (7) of Rule 501 of Regulation D), (ii)
in an
offshore transaction complying with Rule 903 of Regulation S or (iii) in any
other manner that does not require registration of the Preferred Securities
under the Securities Act. In connection with each such sale, the Placement
Agent
has taken or will take reasonable steps to ensure that the Purchaser is aware
that (a) such sale is being made in reliance on an exemption under the
Securities Act and (b) future transfers of the Preferred Securities may not
be
made except in compliance with applicable securities laws.
5.4 Offering
Circulars.
Neither
the Placement Agent nor its representatives will include any nonpublic
information about the Company, the Trust or any of their affiliates in any
registration statement, prospectus, offering circular or private placement
memorandum used in connection with any purchase of Preferred Securities without
the prior written consent of the Trust and the Company.
Section
6. Covenants
of the Offerors.
The
Offerors covenant and agree with the Placement Agent and the Purchaser as
follows:
6.1 Compliance
with Representations and Warranties.
During
the period from the date of this Agreement to the Closing Date, the Offerors
shall use their best efforts and take all action necessary or appropriate to
cause their representations and warranties contained in Section 4
hereof
to be true as of the Closing Date, after giving effect to the transactions
contemplated by this Agreement, as if made on and as of the Closing
Date.
6.2 Sale
and Registration of Securities.
Neither
the Company nor the Trust will, nor will either of them permit any of its
Affiliates to, nor will either of them permit any person acting on its or their
behalf (other than the Placement Agent and the Purchaser and their respective
affiliates) to, directly or indirectly, (i) resell any Preferred Securities
that
have been acquired by any of them, (ii) sell, offer for sale or solicit offers
to buy or otherwise negotiate in respect of any security (as defined in the
Securities Act) that would or could be integrated with the sale of the Preferred
Securities in any manner that would require the registration of the Securities
under the Securities Act or (iii) make offers or sales of any such Security,
or
solicit offers to buy any such
16
Security,
under any circumstances that would require the registration of any of such
Securities under the Securities Act.
6.3 Integration.
Neither
the Company nor the Trust will, until one hundred eighty (180) days following
the Closing Date, without the Purchaser’s prior written consent, offer, sell,
contract to sell, grant any option to purchase or otherwise dispose of, directly
or indirectly, (i) any Preferred Securities or other securities of the Trust
other than as contemplated by this Agreement or (ii) any other securities
convertible into, or exercisable or exchangeable for, any Preferred Securities
or other securities of the Trust.
6.4 Qualification
of Securities.
The
Company and the Trust will arrange for the qualification of the Preferred
Securities for sale under the laws of such jurisdictions as the Placement Agent
may designate and will maintain such qualifications in effect so long as
required for the sale of the Preferred Securities. The Company or the Trust,
as
the case may be, will promptly advise the Placement Agent of the receipt by
the
Company or the Trust, as the case may be, of any notification with respect
to
the suspension of the qualification of the Preferred Securities for sale in
any
jurisdiction or the initiation or threatening of any proceeding for such
purpose.
6.5 Use
of
Proceeds.
The
Trust shall use the proceeds from the sale of the Preferred Securities and
the
Common Securities to purchase the Junior Subordinated Notes from the
Company.
6.6 Investment
Company.
So long
as any of the Securities are outstanding, (i) the Securities shall not be listed
on a national securities exchange registered under Section 6 of the Exchange
Act
or quoted in a U.S. automated interdealer quotation system, (ii) neither the
Company nor the Trust shall be an open-end investment company, unit investment
trust or face-amount certificate company that is, or is required to be,
registered under Section 8 of the Investment Company Act, and, the Securities
shall otherwise satisfy the eligibility requirements of Rule 144A(d)(3) and
(iii) neither of the Offerors shall engage, or permit any subsidiary to engage,
in any activity which would cause it or any subsidiary to be an “investment
company” under the provisions of the Investment Company Act.
6.7 Solicitation
and Advertising.
Neither
the Company nor the Trust will, nor will either of them permit any of their
Affiliates or any person acting on their behalf to (other than the Placement
Agent, the Purchaser or their respective affiliates), (i) engage in any
“directed selling efforts” within the meaning of Regulation S under the
Securities Act or (ii) engage in any form of “general solicitation or general
advertising” (within the meaning of Regulation D) in connection with any offer
or sale of any of the Securities.
6.8 Compliance
with Rule 144A(d)(4) under the Securities Act.
So long
as any of the Securities are outstanding and are “restricted securities” within
the meaning of Rule 144(a)(3) under the Securities Act, the Offerors will,
during any period in which they are not subject to and in compliance with
Section 13 or 15(d) of the Exchange Act, or the Offerors are not exempt from
such reporting requirements pursuant to and in compliance with Rule 12g3-2(b)
under the Exchange Act, provide to each holder of such restricted securities
and
to each prospective
17
purchaser
(as designated by such holder) of such restricted securities, upon the request
of such holder or prospective purchaser in connection with any proposed
transfer, any information required to be provided by Rule 144A(d)(4) under
the
Securities Act, if applicable. The information provided by the Offerors pursuant
to this Section
6.8
will
not, at the date thereof, contain any untrue statement of a material fact or
omit to state any material fact necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading. If the
Company and the Trust are required to register under the Exchange Act, such
reports filed in compliance with Rule 12g3-2(b) shall be sufficient information
as required above. This covenant is intended to be for the benefit of the
Purchaser, the holders of the Securities, and the prospective purchasers
designated by such holders, from time to time, of the Securities.
6.9 Reports.
Each of
the Company and the Trust shall furnish to (i) the Placement Agent, (ii) the
Purchaser and any subsequent holder of the Securities, and (iii) any beneficial
owner of the Securities reasonably identified to the Company and the Trust
(which identification may be made by either such beneficial owner or by the
Purchaser), a duly completed and executed certificate in the form attached
hereto as Annex
F,
including the financial statements referenced in such Annex, which certificate
and financial statements shall be so furnished by the Company and the Trust
not
later than forty-five (45) days after the end of each of the first three fiscal
quarters of each fiscal year of the Company and not later than ninety (90)
days
after the end of each fiscal year of the Company.
6.10 Clearing
and Settlement.
The
Company and the Trust will cooperate with the Purchaser (or any holder of the
Preferred Securities) and use all commercially reasonable efforts to make the
Preferred Securities eligible for clearance and settlement as book-entry
securities through the facilities of the Depository Trust Company (“DTC”) and
listed for trading through the PORTAL Market (“PORTAL”), and will execute,
deliver and comply with all representations made to, and agreements with, DTC
and PORTAL. This Section 6.10 will survive delivery of and payment for the
Preferred Securities.
Section
7. Covenants
of the Placement Agent.
The
Placement Agent covenants and agrees with the Offerors that, during the period
from the date of this Agreement to the Closing Date, the Placement Agent shall
use its best efforts and take all action necessary or appropriate to cause
its
representations and warranties contained in Section
5
to be
true as of the Closing Date, after giving effect to the transactions
contemplated by this Agreement, as if made on and as of the Closing Date. The
Placement Agent further covenants and agrees not to engage in hedging
transactions with respect to the Preferred Securities unless such transactions
are conducted in compliance with the Securities Act.
Section
8. Indemnification
& Contribution.
8.1 Indemnification.
8.1.1 The
Company and the Trust agree jointly and severally to indemnify and hold harmless
the Placement Agent, the Purchaser, a Subsequent Purchaser and their respective
affiliates (collectively, the “Indemnified Parties”) and the Indemnified
Parties’ respective
18
directors,
officers, employees and agents and each person who “controls” the Indemnified
Parties within the meaning of either the Securities Act or the Exchange Act
against any and all losses, claims, damages or liabilities, joint or several,
to
which they or any of them may become subject under the Securities Act, the
Exchange Act or other federal or state statutory law or regulation, at common
law or otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon (i) any untrue
statement or alleged untrue statement of a material fact contained in any
information or documents furnished or made available to the Purchaser or the
Placement Agent by or on behalf of the Company, (ii) the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading or (iii) the breach
or
alleged breach of any representation, warranty or agreement of either Offeror
contained herein, and agrees to reimburse each such Indemnified Party, as
incurred, for any legal or other expenses reasonably incurred by them in
connection with investigating or defending any such loss, claim, damage,
liability or action. This indemnity agreement will be in addition to any
liability which the Company or the Trust may otherwise have.
8.1.2 Promptly
after receipt by an Indemnified Party under this Section 8
of
notice of the commencement of any action, such Indemnified Party will, if a
claim in respect thereof is to be made against the indemnifying party under
this
Section 8,
promptly notify the indemnifying party in writing of the commencement thereof;
but the failure so to notify the indemnifying party (i) will not relieve
the indemnifying party from liability under Section
8.1.1
above
unless and to the extent that such failure results in the forfeiture by the
indemnifying party of material rights and defenses and (ii) will not, in
any event, relieve the indemnifying party from any obligations to any
Indemnified Party other than the indemnification obligation provided in
Section
8.1.1
above.
The Placement Agent shall be entitled to appoint counsel to represent the
Indemnified Party in any action for which indemnification is sought. An
indemnifying party may participate at its own expense in the defense of any
such
action; provided, however, that counsel to the indemnifying party shall not
(except with the consent of the Indemnified Party) also be counsel to the
Indemnified Party. In no event shall the indemnifying parties be liable for
fees
and expenses of more than one counsel (in addition to any local counsel)
separate from their own counsel for all Indemnified Parties in connection with
any one action or separate but similar or related actions in the same
jurisdiction arising out of the same general allegations or circumstances.
An
indemnifying party will not, without the prior written consent of the
Indemnified Parties, settle or compromise or consent to the entry of any
judgment with respect to any pending or threatened claim, action, suit or
proceeding in respect of which indemnification may be sought hereunder (whether
or not the Indemnified Parties are actual or potential parties to such claim,
action, suit or proceeding) unless such settlement, compromise or consent
includes an unconditional release of each Indemnified Party from all liability
arising out of such claim, action, suit or proceeding.
8.2 Contribution.
8.2.1 In
order
to provide for just and equitable contribution in circumstances under which
the
indemnification provided for in Section
8.1
hereof
is for any reason held to be unenforceable for the benefit of an Indemnified
Party in respect of any losses, liabilities, claims, damages or expenses
referred to therein, then each indemnifying party shall contribute to
the
19
aggregate
amount of such losses, liabilities, claims, damages and expenses incurred by
such Indemnified Party, as incurred, (i) in such proportion as is appropriate
to
reflect the relative benefits received by the Offerors, on the one hand, and
the
Placement Agent, on the other hand, from the offering of the Securities or
(ii)
if the allocation provided by clause (i) is not permitted by applicable law,
in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause
(i)
above,
but also the relative fault of the Offerors, on the one hand, and the Placement
Agent, on the other hand, in connection with the statements, omissions or
breaches, which resulted in such losses, liabilities, claims, damages or
expenses, as well as any other relevant equitable considerations.
8.2.2 The
relative benefits received by the Offerors, on the one hand, and the Placement
Agent, on the other hand, in connection with the offering of the Securities
shall be deemed to be in the same respective proportions as the total net
proceeds from the offering of the Securities (before deducting expenses)
received by the Offerors and the Fee paid to the Introducing Agent bear to
the
aggregate of such net proceeds and the Fee.
8.2.3 The
Offerors and the Placement Agent agree that it would not be just and equitable
if contribution pursuant to this Section 8.2
were
determined by pro rata allocation or by any other method of allocation which
does not take account of the equitable considerations referred to above in
this
Section 8.2.
The
aggregate amount of losses, liabilities, claims, damages and expenses incurred
by an Indemnified Party and referred to above in this Section 8.2
shall be
deemed to include any legal or other expenses reasonably incurred by such
Indemnified Party in investigating, preparing or defending against any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever based upon any such
untrue or alleged untrue statement, omission or alleged omission or breach
or
alleged breach.
8.2.4 Notwithstanding
any provision of this Section 8
to the
contrary, the Placement Agent shall not be required to contribute any amount
in
excess of the amount of the Fee.
8.2.5 No
person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f)
of the Securities Act) shall be entitled to contribution from any person who
was
not guilty of such fraudulent misrepresentation.
8.2.6 For
purposes of this Section 8.2,
the
Placement Agent, each person, if any, who controls the Placement Agent within
the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act and the respective partners, directors, officers, employees and
agents of the Placement Agent or any such controlling person shall have the
same
rights to contribution as the Placement Agent, while each officer and director
of the Company, each trustee of the Trust and each person, if any, who controls
the Company within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act shall have the same rights to contribution
as the Offerors.
8.3 Additional
Remedies.
The
indemnity and contribution agreements contained in this Section
8
are in
addition to any liability that the Offerors may otherwise have to any
Indemnified Party.
20
8.4 Additional
Indemnification.
The
Company shall indemnify and hold harmless the Trust against all loss, liability,
claim, damage and expense whatsoever, as due from the Trust under Sections
8.1
through
8.3
hereof.
Section
9. Rights
and Responsibilities of Placement Agent.
9.1 Reliance.
In
performing its duties under this Agreement, the Placement Agent shall be
entitled to rely upon any notice, signature or writing which it shall in good
faith believe to be genuine and to be signed or presented by a proper party
or
parties. The Placement Agent may rely upon any opinions or certificates or
other
documents delivered by the Offerors or their counsel or designees to either
the
Placement Agent or the Purchaser.
9.2 Rights
of Placement Agent.
In
connection with the performance of its duties under this Agreement, the
Placement Agent shall not be liable for any error of judgment or any action
taken or omitted to be taken unless the Placement Agent was grossly negligent
or
engaged in willful misconduct in connection with such performance or
non-performance. No provision of this Agreement shall require the Placement
Agent to expend or risk its own funds or otherwise incur any financial liability
on behalf of the Purchaser in connection with the performance of any of its
duties hereunder. The Placement Agent shall be under no obligation to exercise
any of the rights or powers vested in it by this Agreement.
Section
10. Termination.
This
Agreement shall be subject to termination in the absolute discretion of the
Placement Agent, by notice given to the Company and the Trust prior to delivery
of and payment for the Preferred Securities, if prior to such time (i) a
downgrading shall have occurred in the rating accorded the Company’s debt
securities or preferred stock by any “nationally recognized statistical rating
organization,” as that term is used by the SEC in Rule 15c3-1(c)(2)(vi)(F) under
the Exchange Act, or such organization shall have publicly announced that it
has
under surveillance or review, with possible negative implications, its rating
of
the Company’s debt securities or preferred stock, (ii) the Trust shall be unable
to sell and deliver to the Purchaser at least $12,000,000 aggregate stated
liquidation value of Preferred Securities, (iii) the Company or any of its
subsidiaries that is an insured depository institution shall cease to be
“adequately-capitalized” within the meaning of 12 U.S.C. Section 1831 and
applicable regulations adopted thereunder, or any formal administrative or
judicial action is taken by any appropriate federal banking agency against
the
Company or any such insured subsidiary for unsafe and unsound banking practices,
or violations of law, (iv) a suspension or material limitation in trading in
securities generally shall have occurred on the New York Stock Exchange, (v)
a
suspension or material limitation in trading in any of the Company’s securities
shall have occurred on the exchange or quotation system upon which the Company’s
securities are traded, if any, (vi) a general moratorium on commercial
banking activities shall have been declared either by federal or Indiana
authorities or (vii) there shall have occurred any outbreak or escalation
of hostilities, or declaration by the United States of a national emergency
or
war or other calamity or crisis the effect of which on financial markets is
such
as to make it, in the Placement Agent’s or the Purchaser’s judgment,
impracticable or inadvisable to proceed with the offering or delivery of the
Preferred Securities.
21
Section
11. Miscellaneous.
11.1 Disclosure
Schedule.
The term
“Disclosure Schedule,” as used herein, means the schedule, if any, attached to
this Agreement that sets forth items the disclosure of which is necessary or
appropriate as an exception to one or more representations or warranties
contained in Section
4
hereof.
The Disclosure Schedule shall be arranged in paragraphs corresponding to the
section numbers contained in Section
4.
Nothing
in the Disclosure Schedule shall be deemed adequate to disclose an exception
to
a representation or warranty made herein unless the Disclosure Schedule
identifies the exception with reasonable particularity and describes the
relevant facts in reasonable detail. Without limiting the generality of the
immediately preceding sentence, the mere listing (or inclusion of a copy) of
a
document or other item in the Disclosure Schedule shall not be deemed adequate
to disclose an exception to a representation or warranty made herein unless
the
representation or warranty has to do with the existence of the document or
other
item itself. Information provided by the Company in response to any due
diligence questionnaire shall not be deemed part of the Disclosure Schedule
and
shall not be deemed to be an exception to one or more representations or
warranties contained in Section
4
hereof
unless such information is specifically included on the Disclosure Schedule
in
accordance with the provisions of this Section
11.1.
11.2 Notices.
All
communications hereunder will be in writing and effective only on receipt,
and
will be mailed, delivered by hand or courier or sent by facsimile and
confirmed:
If
to the
Placement Agent, to:
▇.▇.
▇▇▇▇▇▇ Securities Inc.
▇▇▇
▇▇▇▇
▇▇▇▇▇▇
▇▇▇
▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Facsimile:
(▇▇▇) ▇▇▇-▇▇▇▇
Attention:
The CDO Group
with
a
copy to:
▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ & Wood LLP
Two
World
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇
▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Facsimile:
(▇▇▇) ▇▇▇-▇▇▇▇
Telephone:
(▇▇▇) ▇▇▇-▇▇▇▇
Attention:
▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
if
to the
Offerors, to:
Horizon
Bancorp
▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile:
(▇▇▇) ▇▇▇-▇▇▇▇
Telephone:
(▇▇▇) ▇▇▇-▇▇▇▇
Attention:
Chief Financial Officer
22
All
such
notices and communications shall be deemed to have been duly given (i) at the
time delivered by hand, if personally delivered, (ii) five business days after
being deposited in the mail, postage prepaid, if mailed, (iii) when answered
back, if telexed, (iv) the next business day after being telecopied, or (v)
the
next business day after timely delivery to a courier, if sent by overnight
air
courier guaranteeing next-day delivery. From and after the Closing, the
foregoing notice provisions shall be superseded by any notice provisions of
the
Operative Documents under which notice is given. The Placement Agent, the
Company, and their respective counsel, may change their respective notice
addresses, from time to time, by written notice to all of the foregoing
persons.
11.3 Parties
in Interest, Successors and Assigns.
This
Agreement will inure to the benefit of and be binding upon the parties hereto
and their respective successors and permitted assigns. Nothing expressed or
mentioned in this Agreement is intended or shall be construed to give any person
other than the parties hereto and the affiliates, directors, officers,
employees, agents and controlling persons referred to in Section
8
hereof,
their successors, assigns, heirs and legal representatives, and any Subsequent
Purchaser, any right or obligation hereunder. None of the rights or obligations
of the Company or the Trust under this Agreement may be assigned, whether by
operation of law or otherwise, without the Placement Agent’s prior written
consent. The rights and obligations of the Placement Agent and the Purchaser
under this Agreement may be assigned by such party without the Company’s or the
Trust’s consent; provided that the assignee assumes the obligations of such
party under this Agreement.
11.4 Amendments.
This
Agreement may not be modified, amended, altered or supplemented, except upon
the
execution and delivery of a written agreement by each of the parties
hereto.
11.5 Counterparts
and Facsimile.
This
Agreement may be executed by any one or more of the parties hereto in any number
of counterparts, each of which shall be deemed to be an original, but all such
counterparts shall together constitute one and the same instrument. This
Agreement may be executed by any one or more of the parties hereto by facsimile
which shall be effective as delivery of a manually executed counterpart
hereof.
11.6 Headings.
The
headings in this Agreement are for convenience of reference only and shall
not
limit or otherwise affect the meaning hereof.
11.7 Governing
Law.
THIS
AGREEMENT WILL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH
THE
LAW OF THE STATE OF NEW YORK WITHOUT REFERENCE TO PRINCIPLES OF CONFLICTS OF
LAW
(OTHER THAN SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW).
11.8 Submission
to Jurisdiction.
ANY
LEGAL ACTION OR PROCEEDING BY OR AGAINST ANY PARTY HERETO OR WITH RESPECT TO
OR
ARISING OUT OF THIS AGREEMENT MAY BE BROUGHT IN OR REMOVED TO THE COURTS OF
THE
STATE OF NEW YORK, IN AND FOR THE COUNTY OF NEW YORK, OR OF THE UNITED STATES
OF
AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK (IN EACH CASE SITTING IN THE
BOROUGH OF MANHATTAN). BY EXECUTION AND
23
DELIVERY
OF THIS AGREEMENT, EACH PARTY ACCEPTS, FOR ITSELF AND IN RESPECT OF ITS
PROPERTY, GENERALLY AND UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID
COURTS (AND COURTS OF APPEALS THEREFROM) FOR LEGAL PROCEEDINGS ARISING OUT
OF OR
IN CONNECTION WITH THIS AGREEMENT.
11.9 Entire
Agreement.
This
Agreement, together with the Operative Documents and the other documents
delivered in connection with the transactions contemplated by this Agreement,
is
intended by the parties as a final expression of their agreement and intended
to
be a complete and exclusive statement of the agreement and understanding of
the
parties hereto in respect of the subject matter contained herein and therein.
There are no restrictions, promises, warranties or undertakings, other than
those set forth or referred to herein and therein. This Agreement, together
with
the Operative Documents and the other documents delivered in connection with
the
transaction contemplated by this Agreement, supersedes all prior agreements
and
understandings between the parties with respect to such subject
matter.
11.10 Severability.
In the
event that any one or more of the provisions contained herein, or the
application thereof in any circumstances, is held invalid, illegal or
unenforceable in any respect for any reason, the validity, legality and
enforceability of any such provision in every other respect and of the remaining
provisions hereof shall not be in any way impaired or affected, it being
intended that all of the Placement Agent’s and the Purchaser’s rights and
privileges shall be enforceable to the fullest extent permitted by
law.
11.11 Survival.
The
respective agreements, representations, warranties, indemnities and other
statements of the Company and the Trust and their respective officers or
trustees and of the Placement Agent set forth in or made pursuant to this
Agreement will remain in full force and effect, regardless of any investigation
made by or on behalf of the Placement Agent, the Purchaser, the Company or
the
Trust or any of their respective officers, directors, trustees or controlling
persons, and will survive delivery of and payment for the Preferred Securities.
The provisions of Sections
2.4
and
8
shall
survive the termination or cancellation of this Agreement.
Signatures
appear on the following page
24
IN
WITNESS WHEREOF, this Placement Agreement has been entered into as of the date
first written above.
|
Horizon
Bancorp
|
||||
|
By:
|
/s/
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
|
|||
|
▇▇▇▇▇
▇. ▇▇▇▇▇▇
|
||||
|
President
and Chief Executive Officer
|
||||
|
HORIZON
BANCORP CAPITAL TRUST III,
|
||||
|
By:
|
HORIZON
BANCORP,
as Depositor
|
|||
|
By:
|
/s/
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
|
|||
|
▇▇▇▇▇
▇. ▇▇▇▇▇▇▇▇▇
|
||||
|
Chief
Financial Officer
|
||||
|
CONFIRMED
AND ACCEPTED
|
||||
|
as
of the date first set forth above
|
||||
|
▇.▇.
▇▇▇▇▇▇ SECURITIES INC.,
|
||||
|
as
Placement Agent
|
||||
|
By:
|
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇ | |||
|
Name:
▇▇▇▇▇ ▇▇▇▇▇▇
|
||||
|
Title:
V.P.
|
||||
25
Schedule
4.8
Defaults
|
1.
|
The
Company is a party to a certain Credit Agreement with ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Bank, N.A. dated June 8, 2005, a certain $12,000,000 Line of Credit
Note
dated May 12, 2006, and certain other related loan and security documents
(collectively, the “Chase Loan Documents”) which restrict, among other
things, the Company’s ability to incur certain other indebtedness,
incurring the indebtedness represented by the Notes, and guaranteeing
or
becoming liable on the debts of another party. Pursuant to these
Chase
Loan Documents, the Company has also pledged all of the stock of
Horizon
Bank, N.A. as security for the loans. On November 27, 2006, however,
the
Company received the consent of ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ Bank, N.A. to engage
in
the transactions contemplated by this
Agreement.
|
|
2.
|
Pursuant
to Regulation Y, the issuance of trust preferred securities (and
the entry
into the other typical transaction and financial arrangement in
connections therewith) is required to be approved by the Federal
Reserve
Board. The Company has received approval from the Federal Reserve
Board of
Chicago to issue the Preferred Securities and enter into all of the
other
agreements and transactions contemplated by this Agreement.
|
Schedule
4.10
List
of
Significant Subsidiaries
Horizon
Bank N.A.
Horizon
Trust and Investment Management, N.A.
Schedule
4.12
Liens
on
Subsidiary Stock
|
1.
|
The
Company pledged all of the outstanding common shares of Horizon Bank,
N.A.
held by it as security for the loans with ▇▇ ▇▇▇▇▇▇ Chase Bank N.A.
described on Schedule 4.8.
|
2
Schedule
4.13
Liens
on Property
|
1.
|
The
Company pledges various securities held in its investment portfolio
as
security for certain securities repurchase agreements it enters into
in
the ordinary course of managing its investment portfolio.
|
|
2.
|
The
Company has also pledged certain mortgage loans and other portfolio
securities as security for its borrowings from the Federal Home Loan
Bank
of Indianapolis.
|
|
3.
|
The
disclosures set forth in item 1 on Schedule 4.8 are incorporated
into this
Schedule by this reference.
|
|
4.
|
The
disclosures set forth in Schedule 4.12 are incorporated into this
Schedule
by this reference.
|
3
Schedule
4.17
Regulatory
Enforcement Matters
During
the course of a routine periodic examination by Horizon Bank's regulators
(the
FDIC and the OCC) that commenced in February 2003, the examination personnel
raised the issue of whether the Bank's mortgage warehouse loans should be
treated as “other loans” rather than “home mortgage loans” for call report
purposes. If these loans are treated as “other loans” for regulatory reporting
purposes, it would change the calculations for risk-based capital and reduce
the
Bank's and Horizon Bancorp’s risk-based capital ratios. Horizon submitted a
position statement to the regulators on this issue during the Spring of 2003,
and since that time, the regulators have not requested or required that Horizon
change the manner in which it is treating these loans. In the last conversation
Horizon had with the regulators, Horizon was informed that the regulators
were
still considering the issue.
Management
believes that it has properly characterized the loans in its mortgage warehouse
loan portfolio for risk-based capital purposes, but if the regulators decide
to
force a resolution of this issue, there is no assurance that the regulators
will
concur with Horizon’s determination. Should the call report classification of
the loans be changed, Horizon Bancorp and the Bank would still be categorized
as
well capitalized at September 30, 2006 as well as at the end of each calendar
quarter in 2002, 2003, 2004, and 2005.
A-1
EXHIBIT
A
FORM
OF
SUBSCRIPTION AGREEMENT
PREFERRED
SECURITIES SUBSCRIPTION AGREEMENT
December
15, 2006
THIS
PREFERRED SECURITIES SUBSCRIPTION AGREEMENT
(this
“Agreement”) made among Horizon Bancorp Capital Trust III (the “Trust”), a
statutory trust created under the Delaware Statutory Trust Act (12 Del. C.
§3801, et
seq.),
Horizon Bancorp, an Indiana corporation, with its principal offices located
at
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ (the “Company” and, together
with the Trust, the “Offerors”), TWE, Ltd., an exempted company incorporated
under the laws of the Cayman Islands (the “Purchaser”), and ▇.▇.
▇▇▇▇▇▇ Securities Inc. (as
to
Sections 1.2, 1.3 and Article III).
RECITALS:
A.
The
Trust desires to issue an aggregate of TWELVE
MILLION AND
00/100 ($12,000,000) DOLLARS
of its
Floating Rate Preferred Securities (the “Preferred Securities”), liquidation
amount $1,000 per Preferred Security, representing an undivided beneficial
interest in the assets of the Trust (the “Offering”), to be issued pursuant to
an Amended and Restated Trust Agreement (the “Trust Agreement”) by and among the
Company, Wilmington Trust Company, as Property Trustee (the “Property Trustee”),
Wilmington Trust Company, as Delaware Trustee, the administrative trustees
named
therein and the Holders (as defined therein), which Preferred Securities are
to
be guaranteed by the Company with respect to distributions and payments upon
liquidation, redemption and otherwise pursuant to the terms of a Guarantee
Agreement between the Company and Wilmington Trust Company, as Guarantee Trustee
(the “Guarantee”); and
B.
The
proceeds from the sale of the Preferred Securities will be combined with the
proceeds from the sale by the Trust to the Company of its Common Securities,
and
will be used by the Trust to purchase an equivalent amount of Floating Rate
Junior Subordinated Notes of the Company (the “Notes”) to be issued by the
Company pursuant to an indenture (the “Indenture”) to be executed by the Company
and Wilmington Trust Company, as Indenture Trustee; and
C.
In
consideration of the premises and the mutual representations and covenants
hereinafter set forth, the parties hereto agree as follows:
Article
I
PURCHASE
AND SALE OF PREFERRED SECURITIES
1.1 Upon
the
execution of this Agreement, the Purchaser hereby agrees to purchase, directly
or indirectly, from the Trust, Preferred Securities at a price equal to $1,000
per Preferred Security for an aggregate purchase price equal to TWELVE
MILLION AND
00/100 ($12,000,000) DOLLARS
(the
“Purchase Price”), and the Trust agrees to sell such Preferred Securities to the
Purchaser for said Purchase Price. The rights and preferences of the
Preferred
A-2
Securities
are set forth in the Trust Agreement. The closing of the sale and purchase
of
the Preferred Securities by the Offerors to the Purchaser shall occur on
December 15, 2006, or such other later date (not later than January 15, 2007)
as
the parties may designate (the “Closing Date”). The Purchase Price is payable in
immediately available funds on the Closing Date. The Offerors shall provide
the
Purchaser payment instructions no later than two (2) days prior to the Closing
Date.
1.2 The
Placement Agreement, dated as of December 15, 2006 (the “Placement Agreement”),
among the Offerors and the Placement Agent identified therein (the “Placement
Agent”) includes certain representations and warranties, covenants and
conditions to closing and certain other matters governing the Offering. The
Placement Agreement is hereby incorporated by reference into this Agreement,
and
the Purchaser shall be entitled to each of the benefits of the Placement Agent
and the Purchaser under the Placement Agreement, subject to the limitations,
qualifications, acknowledgements and exceptions contained therein (except for
the rights of the Placement Agent under Sections 2.1 and 2.4 of the Placement
Agreement) and shall be entitled to enforce the obligations of the Offerors
under such Placement Agreement as fully as if the Purchaser were a party to
such
Placement Agreement.
1.3 The
Purchaser is purchasing the Preferred Securities in its capacity as a warehouse
entity, and the Purchaser may resell the Preferred Securities to a subsequent
purchaser (any such purchaser from the Purchaser and, if such purchaser is
a
warehouse entity, the next subsequent purchaser that is not a warehouse entity,
being referred to hereinafter as a “Subsequent Purchaser”). Upon transfer of the
Preferred Securities to a Subsequent Purchaser, the Subsequent Purchaser shall
be entitled to each of the benefits of the Placement Agent and the Purchaser
under the Placement Agreement, subject to the limitations, qualifications,
acknowledgments and exceptions contained therein and herein (except for the
rights of the Placement Agent under Sections 2.1 and 2.4 of the Placement
Agreement) and this Agreement, and shall be entitled to enforce the obligations
of the Offerors under the Placement Agreement and this Agreement, as fully
as if
the Subsequent Purchaser were a party to the Placement Agreement and this
Agreement.
Article
II
REPRESENTATIONS
AND WARRANTIES OF PURCHASER
2.1 The
Purchaser understands and acknowledges that the Preferred Securities, the Notes
and the Guarantee (i) have not been registered under the Securities Act of
1933,
as amended (the “Securities Act”), or any other applicable securities law, (ii)
are being offered for sale by the Trust in transactions not requiring
registration under the Securities Act and (iii) may not be offered, sold,
pledged or otherwise transferred by the Purchaser except in compliance with
the
registration requirements of the Securities Act or any other applicable
securities laws, pursuant to an exemption therefrom or in a transaction not
subject thereto.
2.2 The
Purchaser represents and warrants that it is purchasing the Preferred Securities
for its own account and not with a view to, or for offer or sale in connection
with, any distribution thereof in violation of the Securities Act or other
applicable securities laws, subject
A-3
to
any
requirement of law that the disposition of its property be at all times within
its control and subject to its ability to resell such Preferred Securities
pursuant to an effective registration statement under the Securities Act or
under Rule 144A or any other exemption from registration available under the
Securities Act or any other applicable securities law. The Purchaser understands
that no public market exists for any of the Preferred Securities, and that
it is
unlikely that a public market will ever exist for the Preferred
Securities.
2.3 The
Purchaser represents and warrants that (a) it has consulted with its own legal,
regulatory, tax, business, investment, financial and accounting advisers in
connection herewith to the extent it has deemed necessary; (b) it has had a
reasonable opportunity to ask questions of and receive answers from officers
and
representatives of the Offerors concerning their respective financial condition
and results of operations and the purchase of the Preferred Securities and
any
such questions have been answered to its satisfaction; (c) it has had the
opportunity to review all publicly available records and filings concerning
the
Offerors and it has carefully reviewed such records and filings that it
considers relevant to making an investment decision; and (d) it has made its
own
investment decisions based upon its own judgment, due diligence and advice
from
such advisers as it has deemed necessary and not upon any view expressed by
the
Offerors or the Placement Agent.
2.4 The
Purchaser represents and warrants that it is (i) an institutional “accredited
investor” within the meaning of subparagraph (a)(1), (2), (3) or (7) of Rule 501
of Regulation D under the Securities Act, and (ii) a “qualified institutional
buyer” within the meaning of Rule 144A under the Securities Act.
Article
III
MISCELLANEOUS
3.1 Any
notice or other communication given hereunder shall be deemed sufficient if
in
writing and sent by registered or certified mail, return receipt requested,
international courier or delivered by hand against written receipt therefor,
or
by facsimile transmission and confirmed by telephone, to the following
addresses, or such other address as may be furnished to the other parties as
herein provided:
|
To
the Offerors:
|
Horizon
Bancorp
|
|
|
▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
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||
|
▇▇▇▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
|
||
|
Fax:
(▇▇▇) ▇▇▇-▇▇▇▇
|
||
|
Attention: Chief
Financial Officer
|
||
|
To
the Purchaser:
|
TWE,
Ltd.
▇/▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
|
|
|
▇.▇.
▇▇▇ ▇▇▇▇ ▇▇
|
||
|
▇▇▇▇▇▇▇▇▇▇
House
|
||
|
South
Church Street
|
||
|
▇▇▇▇▇▇
Town
Grand
Cayman, Cayman Islands
|
A-4
|
Fax:
(▇▇▇) ▇▇▇-▇▇▇▇
|
||
|
Attention:
The Directors
|
Unless
otherwise expressly provided herein, notices shall be deemed to have been given
on the date of mailing, except notice of change of address, which shall be
deemed to have been given when received.
3.2 This
Agreement shall not be changed, modified or amended except by a writing signed
by the parties to be charged, and this Agreement may not be discharged except
by
performance in accordance with its terms or by a writing signed by the party
to
be charged.
3.3 Upon
the
execution and delivery of this Agreement by the Purchaser, this Agreement shall
become a binding obligation of the Purchaser with respect to the purchase of
Preferred Securities as herein provided.
3.4 NOTWITHSTANDING
THE PLACE WHERE THIS AGREEMENT MAY BE EXECUTED BY ANY OF THE PARTIES HERETO,
THE
PARTIES EXPRESSLY AGREE THAT ALL THE TERMS AND PROVISIONS HEREOF SHALL BE
CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK,
WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW.
3.5 The
parties agree to execute and deliver all such further documents, agreements
and
instruments and take such other and further action as may be necessary or
appropriate to carry out the purposes and intent of this Agreement.
3.6 This
Agreement may be executed in one or more counterparts each of which shall be
deemed an original, but all of which shall together constitute one and the
same
instrument. Delivery of an executed signature page of this Agreement by
facsimile transmission shall be effective as delivery of a manually executed
counterpart hereof.
3.7 In
the
event that any one or more of the provisions contained herein, or the
application thereof in any circumstances, is held invalid, illegal or
unenforceable in any respect for any reason, the validity, legality and
enforceability of any such provision in every other respect and of the remaining
provisions hereof shall not be in any way impaired or affected, it being
intended that all of the Offerors’ and the Purchaser’s rights and privileges
shall be enforceable to the fullest extent permitted by law.
3.8 No
recourse shall be had to any subscriber, officer, director, employee, trustee,
equity holder, certificate holder, incorporator or agent of the Purchaser or
their respective successors or assigns for any obligations hereunder. The
Offerors, severally and jointly, further agree (i) not to take any action in
respect of any claims hereunder against any subscriber, officer, director,
employee, trustee, equity holder, certificate holder, incorporator or agent
of
the Purchaser or any of their successors or assigns that is an investment
vehicle issuing collateralized debt obligations and (ii) not to institute
against any successor or assign of the Purchaser that is an investment vehicle
issuing collateralized debt obligations any insolvency, bankruptcy,
A-5
reorganization,
liquidation or similar proceedings in any jurisdiction until one year and one
day or, if longer, the applicable preference period then in effect, as the
case
may be, shall have elapsed since the final payments to the holders of the
securities issued by such investment vehicle.
Signatures
appear on the following page
A-6
IN
WITNESS WHEREOF, this Agreement is agreed to and accepted as of the day and
year
first written above.
|
TWE,
LTD.,
as Purchaser,
|
||||
|
By:
|
TRAPEZA
CAPITAL MANAGEMENT, LLC,
as
Portfolio Manager
|
|||
|
By:
|
||||
|
Name:
|
||||
|
Title:
|
||||
|
HORIZON
BANCORP
|
||||
|
By:
|
|
|||
|
Name:
|
||||
|
Title:
|
||||
|
HORIZON
BANCORP CAPITAL TRUST III
|
||||
|
By:
|
HORIZON
BANCORPE, as Depositor
|
|||
|
By:
|
|
|||
|
Name:
|
||||
|
Title:
|
||||
|
▇.▇.
▇▇▇▇▇▇ SECURITIES INC.
|
||||
|
as
Placement Agent
|
||||
|
(for
purposes of the rights and obligations in Sections 1.2, 1.3 and
Article
III only)
|
||||
|
By:
|
||||
|
Name:
|
||||
|
Title:
|
||||
▇-▇
▇▇▇▇▇▇▇
▇-▇
FORM
OF
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & WOOD LLP OPINION
Pursuant
to Section 3.2(a) of the Placement Agreement, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇ LLP,
special counsel for the Placement Agent and the Purchaser, shall deliver an
opinion to the effect that:
|
(i)
|
the
Company and each Significant Subsidiary is validly existing as a
corporation in good standing under the laws of the jurisdiction in
which
it is chartered or organized;
|
|
(ii)
|
the
Company has corporate power and authority to (a) execute and deliver,
and
to perform its obligations under, the Operative Documents to which
it is a
party and (b) issue and perform its obligations under the
Notes;
|
|
(iii)
|
neither
the issue and sale of the Common Securities, the Preferred Securities
or
the Junior Subordinated Notes, nor the purchase by the Trust of the
Junior
Subordinated Notes, nor the execution and delivery of and compliance
with
the Operative Documents by the Company or the Trust nor the consummation
of the transactions contemplated thereby will constitute a breach
or
violation of the Trust Agreement or the charter or by-laws of the
Company;
|
|
(iv)
|
the
Amended and Restated Trust Agreement has been duly authorized, executed
and delivered by the Company and duly executed and delivered by the
Administrative Trustees;
|
|
(v)
|
each
of the Guarantee and the Indenture has been duly authorized, executed
and
delivered by the Company and, assuming it has been duly authorized,
executed and delivered by the Guarantee Trustee and the Indenture
Trustee,
respectively, constitutes a legal, valid and binding obligation of
the
Company enforceable against the Company in accordance with its terms,
subject to applicable bankruptcy, insolvency and similar laws affecting
creditors’ rights generally and to general principles of
equity;
|
|
(vi)
|
the
Junior Subordinated Notes have been duly authorized and executed
by the
Company and delivered to the Indenture Trustee for authentication
in
accordance with the Indenture and, when authenticated in accordance
with
the provisions of the Indenture and delivered to the Trust against
payment
therefor, will constitute legal, valid and binding obligations of
the
Company entitled to the benefits of the Indenture and enforceable
against
the Company in accordance with their terms, subject to applicable
bankruptcy, insolvency and similar laws affecting creditors’ rights
generally and to general principles of equity;
|
|
(vii)
|
the
Trust is not, and, following the issuance of the Preferred Securities
and
the consummation of the transactions contemplated by the Operative
Documents and the application of the proceeds therefrom, the Trust
will
not be, an “investment company” or an entity “controlled” by an
“investment company,” in each case within the meaning of Section 3(a) of
the Investment Company Act;
|
B-1-1
|
(viii)
|
assuming
(a) the accuracy of the representations and warranties, and compliance
with the agreements contained in the Placement Agreement and (b)
that the
Preferred Securities are sold in a manner contemplated by, and in
accordance with the Placement Agreement, the Subscription Agreement
and
the Amended and Restated Trust Agreement, it is not necessary in
connection with the offer, sale and delivery of the Preferred Securities
by the Trust to the Purchaser, to register any of the Securities
under the
Securities Act or to require qualification of the Indenture under
the
Trust Indenture Act of 1939, as
amended;
|
|
(ix)
|
the
Placement Agreement and the Subscription Agreement have been duly
authorized, executed and delivered by the Company and the Trust;
and,
|
|
(x)
|
the Indenture
constitutes a valid and binding instrument of the Indenture Trustee,
enforceable against the Indenture Trustee in accordance with its
terms, except
as rights to indemnity and contribution thereunder may be limited
under
applicable law or public policy, and subject to the qualifications
that
(i) enforcement thereof may be limited by bankruptcy, insolvency,
receivership, reorganization, liquidation, voidable preference, moratorium
or other laws (including the laws of fraudulent conveyance and transfer)
or judicial decisions affecting the enforcement of creditors’ rights
generally or the reorganization of financial institutions and (ii)
the
enforceability of the Indenture Trustee’s obligations thereunder is
subject to general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law)
and to
the effect of certain laws and judicial decisions upon the availability
and enforceability of certain remedies, including the remedies of
specific
performance and self-help.
|
In
rendering such opinions, such counsel may (A) state that its opinion is
limited to the laws of the State of New York, the Delaware General
Corporation Law and the federal laws of the United States; (B) as to
matters involving the application of laws of any jurisdiction other than the
State of New York and the Delaware General Corporation Law or the federal
laws of the United States, (i) rely, to the extent deemed proper and
specified in such opinion, upon the opinion of other counsel of good standing
believed to be reliable and who are satisfactory to the Purchaser or (ii) assume
such law is substantially similar to the law of the State of New York and,
(C)
as to matters of fact, rely to the extent deemed proper, on certificates of
responsible officers of the Company and public officials.
▇-▇-▇
▇▇▇▇▇▇▇
▇-▇
FORM
OF
COMPANY COUNSEL OPINION
OR
OFFICERS’ CERTIFICATE
Pursuant
to Section 3.2(b) of the Placement Agreement, either (i) counsel for the Company
shall deliver an opinion, or (ii) the General Counsel of the Company shall
deliver an opinion, or, (iii) if the Company does not have a General Counsel
or
Chief Legal Officer, the Chief Executive Officer and Chief Financial Officer
of
the Company shall provide an Officers’ Certificate, to the effect
that:
|
(i)
|
all
of the issued and outstanding shares of capital stock of each Significant
Subsidiary are owned of record by the Company or subsidiary of the
Company, and the issuance of the Preferred Securities and the Common
Securities is not subject to any contractual preemptive rights known
to
such counsel;
|
|
(ii)
|
no
consent, approval, authorization or order of any court or governmental
authority is required for the issue and sale of the Common Securities,
the
Preferred Securities or the Junior Subordinated Notes, the purchase
by the
Trust of the Junior Subordinated Notes, the execution and delivery
of and
compliance with the Operative Documents by the Company or the Trust
or the
consummation of the transactions contemplated in the Operative Documents,
except such approvals (specified in such [opinion/certificate]) as
have
been obtained;
|
|
(iii)
|
to
the knowledge of such counsel, there is no action, suit or proceeding
before or by any government, governmental instrumentality, arbitrator
or
court, domestic or foreign, now pending or threatened against or
affecting
the Trust or the Company or any Significant Subsidiary that could
adversely affect the consummation of the transactions contemplated
by the
Operative Documents or could have a Material Adverse Effect on the
Company
and its subsidiaries on a consolidated basis, except for the agreement
with the Office of the Comptroller of the Currency (“OCC”) to maintain
certain capital levels and the unresolved dispute with the OCC regarding
the Company’s classification of certain mortgage warehouse loans for call
report purposes;
|
|
(iv)
|
the
Company is duly registered as a bank
holding company
under the Bank Holding Company Act and
the regulations thereunder of the Federal Reserve Board, and the
deposit
accounts of the Company’s banking subsidiary are insured by the FDIC to
the fullest extent permitted by law and the rules and regulations
of the
FDIC, and no proceeding for the termination of such insurance are
pending
or, to such person’s knowledge,
threatened;
|
|
(v)
|
The
execution, delivery and performance of the Operative Documents, as
applicable, by the Company and the Trust and the consummation by
the
Company and the Trust of the transactions contemplated by the Operative
Documents, as applicable, (a) will not result in any violation of
the
articles
of incorporation
or
bylaws of the Company, the articles of incorporation or bylaws of
each
Significant Subsidiary, the Amended and Restated Trust Agreement
or the
Certificate of Trust, and (b) will not conflict with, or result in
a
breach
|
B-2-1
of
any of
the terms or provisions of, or constitute a default (or an event which, with
notice or lapse of time or both, would constitute a default) under, or result
in
the creation or imposition of any lien, charge and encumbrance upon any assets
or properties of the Company or any Significant Subsidiary under, (A) any
agreement, indenture, mortgage or instrument that the Company or any Significant
Subsidiary of the Company is a party to or by which it may be bound or to which
any of its assets or properties may be subject, or (B) any existing applicable
law, rule or administrative regulation of any court or governmental agency
or
authority having jurisdiction over the Company or any Significant Subsidiary
of
the Company or any of their respective assets or properties, except in case
of
(b), where any such violation, conflict, breach, default, lien, charge or
encumbrance, would not have a material adverse effect on the assets, properties,
business, results of operations or financial condition of the Company and its
subsidiaries, taken as whole and except for such violations, conflicts,
breaches, defaults, liens, charges or encumbrances that have been waived or
consented to by the other parties to such arrangements.
All
terms
used but not defined herein shall have the meanings assigned to them in the
Placement Agreement. A Subsequent Purchaser shall be entitled to rely on this
opinion.
▇-▇-▇
▇▇▇▇▇▇▇
▇-▇
FORM
OF
TAX COUNSEL OPINION
Pursuant
to Section 3.2(c) of the Placement Agreement, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇ LLP, tax
counsel for the Offerors, shall deliver an opinion to the effect
that:
|
(i)
|
the
Trust will be classified for United States federal income tax purposes
as
a grantor trust and not as an association or a publicly traded partnership
taxable as a corporation; and
|
|
(ii)
|
for
United States federal income tax purposes, the Junior Subordinated
Notes
will constitute indebtedness of the
Company.
|
In
rendering such opinions, such counsel may (A) state that its opinion is
limited to the laws of the State of Indiana and the federal laws of the
United States and (B) rely as to matters of fact, to the extent deemed
proper, on certificates of responsible officers of the Company and public
officials.
▇-▇-▇
▇▇▇▇▇▇▇
▇-▇
FORM
OF
DELAWARE COUNSEL TRUST OPINION
Pursuant
to Section 3.2(d) of the Placement Agreement, ▇▇▇▇▇▇
▇▇▇▇▇ LLP,
special
Delaware counsel for the Trust, shall deliver an opinion to the effect
that:
|
(i)
|
The
Trust has been duly created and is validly existing in good standing
as a
statutory trust under the Delaware Statutory Trust Act, and all filings
required under the laws of the State of Delaware with respect to
the
creation and valid existence of the Trust as a statutory trust have
been
made.
|
|
(ii)
|
Under
the Delaware Statutory Trust Act and the Amended and Restated Trust
Agreement, the Trust has the trust power and authority (i) to own
property
and conduct its business, all as described in the Amended and Restated
Trust Agreement, (ii) to execute and deliver, and to perform its
obligations under, each of the Placement Agreement, the Subscription
Agreement, the Common Securities Subscription Agreement, the Junior
Subordinated Note Subscription Agreement and the Preferred Securities
and
the Common Securities and (iii) to purchase and hold the Junior
Subordinated Notes.
|
|
(iii)
|
Under
the Delaware Statutory Trust Act, the certificate attached to the
Amended
and Restated Trust Agreement as Exhibit C is an appropriate form of
certificate to evidence ownership of the Preferred Securities. The
Preferred Securities have been duly authorized by the Amended and
Restated
Trust Agreement and, when issued in accordance with the Amended and
Restated Trust Agreement and delivered against payment therefor in
accordance with the Amended and Restated Trust Agreement and the
Subscription Agreement, the Preferred Securities will be validly
issued
and (subject to the qualifications set forth in this paragraph) fully
paid
and nonassessable and will represent undivided beneficial interests
in the
assets of the Trust, and the Preferred Security Holders will be entitled
to the benefits of the Amended and Restated Trust Agreement. The
Preferred
Security Holders as beneficial owners of the Trust, will be entitled
to
the same limitation of personal liability extended to stockholders
of
private corporations for profit organized under the General Corporation
Law of the State of Delaware. The Preferred Security Holders may
be
obligated to make payments or provide indemnity or security as set
forth
in the Amended and Restated Trust
Agreement.
|
|
(iv)
|
The
Common Securities have been duly authorized by the Amended and Restated
Trust Agreement and, when issued in accordance with the Amended and
Restated Trust Agreement and delivered against payment therefor in
accordance with the Amended and Restated Trust Agreement and the
Common
Securities Subscription Agreement, will be validly issued and will
represent undivided beneficial interests in the assets of the Trust,
and
the Common Security Holder will be entitled to the benefits of the
Amended
and Restated Trust Agreement.
|
B-4-1
|
(v)
|
Under
the Delaware Statutory Trust Act and the Amended and Restated Trust
Agreement, the issuance of the Preferred Securities and the Common
Securities is not subject to preemptive or other similar
rights.
|
|
(vi)
|
Under
the Delaware Statutory Trust Act and the Amended and Restated Trust
Agreement, the execution and delivery by the Trust of the Placement
Agreement, the Subscription Agreement, the Common Securities Subscription
Agreement and the Junior Subordinated Note Subscription Agreement,
and the
performance by the Trust of its obligations thereunder, have been
duly
authorized by all necessary trust action on the part of the
Trust.
|
|
(vii)
|
The
Amended and Restated Trust Agreement constitutes a legal, valid and
binding obligation of the Company and the Trustees, enforceable against
the Company and the Trustees, in accordance with its
terms.
|
|
(viii)
|
The
issuance and sale by the Trust of the Preferred Securities and the
Common
Securities, the purchase by the Trust of the Junior Subordinated
Notes,
the execution, delivery and performance by the Trust of the Placement
Agreement, the Subscription Agreement, the Common Securities Subscription
Agreement and the Junior Subordinated Note Subscription Agreement,
the
consummation by the Trust of the transactions contemplated by the
Placement Agreement, the Subscription Agreement, the Common Securities
Subscription Agreement and the Junior Subordinated Note Subscription
Agreement and compliance by the Trust with its obligations thereunder
are
not prohibited by (i) the Certificate of Trust or the Amended and
Restated
Trust Agreement or (ii) any law or regulation of the State of Delaware
applicable to the Trust.
|
|
(ix)
|
No
filing with, or authorization, approval, consent, license, order,
registration, qualification or decree of, any Delaware court or Delaware
governmental authority or Delaware agency is required solely in connection
with the issuance and sale by the Trust of the Trust Securities,
the
purchase by the Trust of the Junior Subordinated Notes, the execution,
delivery and performance by the Trust of the Placement Agreement,
the
Subscription Agreement, the Common Securities Subscription Agreement
and
the Junior Subordinated Note Subscription Agreement, the consummation
by
the Trust of the transactions contemplated by the Placement Agreement
and
the Subscription Agreement and compliance by the Trust with its
obligations thereunder.
|
|
(x)
|
The
Preferred Security Holders (other than those Preferred Security Holders
who reside or are domiciled in the State of Delaware) will have no
liability for income taxes imposed by the State of Delaware solely
as a
result of their participation in the Trust and the Trust will not
be
liable for any income tax imposed by the State of
Delaware.
|
In
rendering such opinions, such counsel may (A) state that its opinion is
limited to the laws of the State of Delaware and (B) rely as to matters of
fact, to the extent deemed proper, on certificates of responsible officers
of
the Company and the Trust and public officials.
▇-▇-▇
▇▇▇▇▇▇
& ▇▇▇▇▇▇▇▇▇ LLP shall be entitled to rely on this opinion for purposes of
rendering its opinions pursuant to Sections 3.2(b) and 3.2(c) of the Placement
Agreement.
B-4-3
EXHIBIT
B-5
FORM
OF
TRUSTEE COUNSEL OPINION
Pursuant
to Section 3.2(e) of the Placement Agreement, ▇▇▇▇▇▇ ▇▇▇▇▇ LLP, special counsel
for the Property Trustee, the Guarantee Trustee, the Delaware Trustee and the
Indenture Trustee, shall deliver an opinion to the effect that:
the
Indenture Trustee, shall deliver an opinion to the effect that:
|
(i)
|
Wilmington
Trust Company is duly incorporated and validly existing as a Delaware
banking corporation in good standing under the laws of the State
of
Delaware with trust powers and its principal place of business
in the
State of Delaware.
|
|
(ii)
|
Wilmington
Trust Company has requisite corporate power and authority to execute
and
deliver, and to perform its obligations under, the Amended and
Restated
Trust Agreement, the Guarantee Agreement and the
Indenture.
|
|
(iii)
|
The
execution, delivery, and performance by Wilmington Trust Company
of the
Amended and Restated Trust Agreement, the Guarantee Agreement and
the
Indenture have been duly authorized by all necessary corporate
action on
the part of Wilmington Trust Company, and the Amended and Restated
Trust
Agreement, the Guarantee Agreement and the Indenture have been
duly
executed and delivered by Wilmington Trust
Company.
|
|
(iv)
|
The
Amended and Restated Trust Agreement is a legal, valid and binding
obligation of Wilmington Trust Company, enforceable against Wilmington
Trust Company, in accordance with its terms.
|
|
(v)
|
No
approval, authorization or other action by, or filing with, any
governmental authority or agency under any law or regulation of
the State
of Delaware or the United States of America governing the trust
powers of
Wilmington Trust Company is required solely in connection with
the
execution, delivery and performance by Wilmington Trust Company
of the
Amended and Restated Trust Agreement, the Guarantee Agreement and
the
Indenture, except for the filing of the Certificate of Trust with
the
Secretary of State, which Certificate of Trust has been duly filed
with
the Secretary of State.
|
|
(vi)
|
The
execution, delivery and performance of the Amended and Restated
Trust
Agreement, the Guarantee Agreement and the Indenture by Wilmington
Trust
Company are not prohibited by (i) the Charter or Bylaws of Wilmington
Trust Company, (ii) any law or regulation of the State of Delaware
or the
United States of America governing the trust powers of Wilmington
Trust
Company, or (iii) to our knowledge (based and relying solely on
the
Officer Certificates), any agreements or instruments to which Wilmington
Trust Company is a party or by which Wilmington Trust Company is
bound or
any judgment or order applicable to Wilmington Trust Company.
|
B-5-1
|
(vii)
|
The
Junior Subordinated Notes delivered on the date hereof have been
authenticated by due execution thereof and delivered by Wilmington
Trust
Company, as Indenture Trustee, in accordance with the Company Order.
The
Preferred Securities delivered on the date hereof have been authenticated
by due execution thereof and delivered by Wilmington Trust Company,
as
Property Trustee, in accordance with the Trust
Order.
|
In
rendering such opinions, such counsel may (A) state that its opinion is
limited to the laws of the State of Delaware and the federal laws of the
United States governing the trust powers of Wilmington Trust Company and
(B) rely as to matters of fact, to the extent deemed proper, on
certificates of responsible officers of Wilmington Trust Company and public
officials.
▇▇▇▇▇▇
& ▇▇▇▇▇▇▇▇▇ LLP shall be entitled to rely on this opinion for purposes of
rendering its opinions pursuant to Sections 3.2(b) and 3.2(c) of the Placement
Agreement.
B-5-2
Annex
F
OFFICER’S
CERTIFICATE
The
undersigned, the [Chief Financial Officer] [Treasurer] [Executive Vice
President] hereby certifies, pursuant to Section 6.9 of the Placement Agreement,
dated as of December 15, 2006 among Horizon Bancorp (the “Company”), Horizon
Bancorp Capital Trust III (the “Trust”) and ▇.▇. ▇▇▇▇▇▇ Securities Inc., that,
as of _______, 20__, the Company had the following ratios and
balances:
BANK
HOLDING COMPANY
As
of
[Quarterly Financial Dates]
|
Tier
1 Risk Weighted Assets
|
%
|
||
|
Ratio
of Double Leverage
|
%
|
||
|
Non-Performing
Assets to Loans and OREO
|
%
|
||
|
Tangible
Common Equity as a Percentage of Tangible Assets
|
%
|
||
|
Ratio
of Reserves to Non-Performing Loans
|
%
|
||
|
Ratio
of Net Charge-Offs to Loans
|
%
|
||
|
Return
on Average Assets (annualized)
|
%
|
||
|
Net
Interest Margin (annualized)
|
%
|
||
|
Efficiency
Ratio
|
%
|
||
|
Ratio
of Loans to Assets
|
%
|
||
|
Ratio
of Loans to Deposits
|
%
|
||
|
Double
Leverage (exclude trust preferred as equity)
|
%
|
||
|
Total
Assets
|
$
|
||
|
Year
to Date Income
|
$
|
*
A table
describing the quarterly report calculation procedures is attached.
[FOR
FISCAL YEAR END: Attached hereto are the audited consolidated financial
statements (including the balance sheet, income statement and statement of
cash
flows, and notes thereto, together with the report of the independent
accountants thereon) of the Company and its consolidated subsidiaries for the
three years ended _______, 20__.]
[FOR
FISCAL QUARTER END: Attached hereto are the unaudited consolidated and
consolidating financial statements (including the balance sheet and income
statement) of the Company and its consolidated subsidiaries for the fiscal
quarter and [six/nine] month period ended _______, 20___.]
F-1
Annex
F
The
financial statements fairly present in all material respects, in accordance
with
U.S. generally accepted accounting principles (“GAAP”), the financial position
of the Company and its consolidated subsidiaries, and the results of operations
and changes in financial condition as of the date, and for the [___ quarter
interim] [annual] period ended _______, 20__, and such financial statements
have
been prepared in accordance with GAAP consistently applied throughout the period
involved (expect as otherwise noted therein).
IN
WITNESS WHEREOF, the undersigned has executed this Officer’s Certificate as of
this _____ day of _____________, 20__
|
Name:
|
|
|
Title:
|
|
|
Horizon
Bancorp
|
|
|
▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
|
|
|
▇▇▇▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
|
|
|
(▇▇▇)
▇▇▇-▇▇▇▇
|
F-2
FINANCIAL
DEFINITIONS
BANK
HOLDING COMPANY
|
Report
Item
|
Corresponding
FRY-9C or LP Line Items with Line Item corresponding
Schedules
|
Description
of Calculation
|
|
Tier
1 Risk Weighted Assets
|
BHCK7206
Schedule
HC-R
|
Tier
1 Risk Ratio: Core Capital (Tier 1)/ Risk-Adjusted
Assets
|
|
Ratio
of Double Leverage
|
(BHCP0365)/(BCHCP3210)
Schedule
PC in the LP
|
Total
equity investments in subsidiaries divided by the total equity capital.
This field is calculated at the parent company level. “Subsidiaries”
include bank, bank holding company, and non-bank
subsidiaries.
|
|
Non-Performing
Assets to Loans and OREO
|
(BHCK5525-BHCK3506+BHCK5526-BHCK3507+BHCK2744/(BHCK2122+BHCK2744)
Schedules HC-C, HC-M & HC-N
|
Total
Nonperforming Assets (NPLs+Foreclosed Real Estate+Other Nonaccrual
&
Repossessed Assets)/Total Loans+Foreclosed Real Estate
|
|
Tangible
Common Equity as a Percentage of Tangible Assets
|
(BHDM3210-BHCK3163)/(BHCK2170-BHCK3163)
Schedule
HC
|
(Equity
Capital - Goodwill)/(Total Assets - Goodwill)
|
|
Ratio
of Reserves to Non-Performing Loans
|
(BHCK3123+BHCK3128)/(BHCK5525-BHCK3506+BHCK5526-BHCK3507)
Schedules
HC & HC-N & HC-R
|
Total
Loan Loss and Allocated Transfer Risk Reserves/ Total Nonperforming
Loans
(Nonaccrual + Restructured)
|
|
Ratio
of Net Charge-Offs to Loans
|
(BHCK4635-BHCK4605)/(BHCK3516)
Schedules
HI-B & HC-K
|
Net
charge offs for the period as a percentage of average
loans.
|
|
Return
on Average Assets (annualized)
|
(BHCK4340/BHCK3368)
Schedules
HI & HC-K
|
Net
Income as a percentage of Assets.
|
|
Net
Interest Margin (annualized)
|
(BHCK4519/(BHCK3515+BHCK3365+BHCK3516+BHCK3401+BHCKB985)
Schedules
HI Memorandum and HC-K
|
(Net
Interest Income Fully Taxable Equivalent, if available/Average Earning
Assets)
|
|
Efficiency
Ratio
|
(BHCK4093)/(BHCK4519+BHCK4079)
Schedule
HI
|
(Non-interest
Expense)/(Net Interest Income Fully Taxable Equivalent, if available,
plus
Non-interest Income)
|
|
Ratio
of Loans to Assets
|
(BHCKB528+BHCK5369)/(BHCK2170)
Schedule
HC
|
Total
Loans & Leases (Net of Unearned Income & Gross of Reserve)/Total
Assets
|
|
Ratio
of Loans to Deposits
|
(BHCKB528+BHCK5369)/(BHDM6631+BHDM6636+BHFN6631+BHFN6636)
Schedule
HC
|
Total
Loans & Leases (Net of Unearned Income & Gross of Reserve)/Total
Deposits (Includes Domestic and Foreign
Deposits)
|
|
Report
Item
|
Corresponding
FRY-9C or LP Line Items with Line Item corresponding
Schedules
|
Description
of Calculation
|
|
Total
Assets
|
(BHCK2170)
Schedule
HC
|
The
sum of total assets. Includes cash and balances due from depository
institutions; securities; federal funds sold and securities purchased
under agreements to resell; loans and lease financing receivables;
trading
assets; premises and fixed assets; other real estate owned; investments
in
unconsolidated subsidiaries and associated companies; customer’s liability
on acceptances outstanding; intangible assets; and other
assets.
|
2