1
EXHIBIT 1
LAFAYETTE COMMUNITY BANCORP
up to 1,200,000 Shares
COMMON SHARES
(Without par value)
Subscription Price $10.00 Per Share
AGENCY AGREEMENT
June __,2000
2
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Ladies and Gentlemen:
Lafayette Community Bancorp, an Indiana banking corporation (the
"Holding Company"), and Lafayette Community Bank, Lafayette, Indiana, an Indiana
banking corporation in organization (the "Bank") (references to the Bank include
both the Bank in organization and after its articles of incorporation have been
granted, as indicated by the context), with its deposit accounts to be insured
by the Bank Insurance Fund ("BIF") administered by the Federal Deposit Insurance
Corporation ("FDIC"), hereby confirm their agreement with ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ &
▇▇▇▇▇, Inc. ("the Agent"), as follows:
SECTION 1. THE OFFERING. The Holding Company is offering a minimum of
900,000 shares and up to a maximum of 1,200,000 shares of common shares, without
par value (the "Shares"), in a community offering (the "Offering") in connection
with the Holding Company's initial public offering and capitalization of the
Bank, a de novo, FDIC-insured Indiana state-chartered bank. The Holding Company
is offering all of the Shares through approved broker-dealer firms which are
members of the National Association of Securities Dealers, Inc.
("NASD")("Assisting Brokers").
The Holding Company has filed with the Securities and Exchange
Commission (the "Commission") a registration statement on Form SB-2 (File No.
333-34254) (the "Registration Statement") containing a prospectus relating to
the Offering for the registration of the Shares under the Securities Act of
1933, as amended (the "1933 Act"), and has filed such amendments thereof and
such amended prospectuses as may have been required to the date hereof. The term
"Registration Statement" shall include any documents incorporated by reference
therein and all financial schedules and exhibits thereto, as amended, including
post-effective amendments. The prospectus, as amended, on file with the
Commission at the time the Registration Statement initially became effective is
hereinafter called the "Prospectus", except that if any Prospectus is filed by
the Holding Company pursuant to Rule 424(b) or (c) of the rules and regulations
of the Commission under the 1933 Act (the "1933 Act Regulations") differing from
the prospectus on file at the time the Registration Statement initially becomes
effective, the term "Prospectus" shall refer to the prospectus filed pursuant to
Rule 424(b) or (c) from and after the time said prospectus is filed with the
Commission.
3
The Bank has filed with the Indiana Department of Financial
Institutions ("DFI") for approval to form a de novo Indiana banking corporation,
and with the FDIC for insurance of accounts, and has filed amendments thereto as
required by the DFI and the FDIC (as so amended, the Applications). The Holding
Company has filed with the Board of Governors of the Federal Reserve System (the
"FRB") its application (the Holding Company Application) to acquire the Bank
under the Bank Holding Company Act, as amended, and the regulations promulgated
thereunder ("BHCA") (the DFI, FDIC and Federal Reserve being hereafter referred
to collectively as the Regulatory Agencies).
SECTION 2. RETENTION OF AGENT; COMPENSATION; SALE AND DELIVERY OF THE
SHARES. Subject to the terms and conditions herein set forth, the Holding
Company and the Bank hereby appoint the Agent as their exclusive financial
advisor and marketing agent (i) to utilize its best efforts to solicit
subscriptions for the Shares and to advise and assist the Holding Company and
the Bank with respect to the Holding Company's sale of the Shares in the
Offering and (ii) to manage the sale of Shares through a group of Assisting
Brokers if necessary.
On the basis of the representations and warranties and subject to the
terms and conditions of this Agreement, the Agent accepts such appointment and
agrees to consult with and advise the Holding Company and the Bank as to matters
set forth in the letter agreement ("Letter Agreement"), dated December 16, 1999,
between the Bank, the Holding Company and the Agent (a copy of which is attached
hereto as Exhibit A). It is acknowledged by the Holding Company and the Bank
that the Agent shall not be obligated to purchase any Shares and shall not be
obligated to take any action which is inconsistent with any applicable law,
regulation, decision or order. Subscriptions will be offered by means of Order
Forms as described in the Prospectus. Except as provided in the paragraph below,
the appointment of the Agent hereunder shall terminate upon completion of the
Offering.
The Agent agrees to provide financial advisory assistance to the Bank
and the Holding Company at no charge for a period of one year following the
completion of the Offering including general advice on the market for bank
stocks and the shares of the Holding Company, shareholder enhancement methods
and other related matters. Thereafter, if the parties wish to continue the
relationship, a fee will be negotiated and an agreement with respect to specific
advisory services will be entered into at that time.
In the event the Holding Company is unable to sell a minimum of 900,000
Shares within the period herein provided, this Agreement shall terminate and the
Holding Company shall refund to any person who has subscribed for any of the
Shares the full amount which it may have received from such person as set forth
in the Prospectus; and none of the parties to this Agreement shall have any
obligation to the other parties hereunder, except as set forth in this Section 2
and in Sections 6, 8 and 9 hereof.
4
In the event the Offering is terminated for any reason not attributable
to the action or inaction of the Agent, the Agent shall be paid the fees due to
the date of such termination pursuant to subparagraphs (a) and (b) below.
If all conditions precedent to the consummation of the Offering are
satisfied, the Holding Company agrees to issue, or have issued, the Shares sold
in the Offering and to release for delivery certificates for such Shares on the
Closing Date (as hereinafter defined) against payment to the Holding Company by
any means authorized pursuant hereto; provided, however, that no funds shall be
released to the Holding Company until the conditions specified in Section 7A
hereof shall have been complied with to the reasonable satisfaction of the Agent
and its counsel. The release of Shares against payment therefor shall be made on
a date and at a place acceptable to the Holding Company, the Bank and the Agent.
Certificates for shares shall be delivered directly to the purchasers in
accordance with their directions. The date upon which the Holding Company shall
release or deliver the Shares sold in the Offering, in accordance with the terms
herein, is called the "Closing Date."
The Agent shall receive the following compensation for its services hereunder:
(a) An advisory fee of $10,000. Such fees shall be deemed to have
been earned and shall be applied against the fees pursuant to subsection (b),
below.
(b) (i) 0% of the aggregate actual purchase price of the stock
sold to officers, directors and employees of the Bank;
(ii) 4.0% of the aggregate actual purchase price of the stock
sold to investors who are included on the lists provided by
the directors in conjunction with the Offering and who placed
their orders with the Agent; and
(iii) 7.0% of the aggregate actual purchase price of the stock
sold to investors who are not included on the lists provided
by the directors in conjunction with the Offering; and
(iv) In the event that a syndicate of Assisting Brokers are
used to assist in the Offering, the fee for such Shares shall
be 7.0% of the aggregate actual purchase price of the
securities sold through such syndicate. The Agent will pass on
to such Assisting Brokers who assist in the Offering an amount
competitive with gross underwriting discounts charged at such
time for comparable amounts of stock sold at a comparable
price per share in a similar market environment. Fees with
respect to purchases effected through Assisting Brokers other
than the Agent shall be transmitted by the Agent to such
Assisting Broker. The decision to utilize
5
Assisting Brokers will be made by the Holding Company upon
consultation with the Agent with due diligence regard to the
Holding Company's stock distribution strategy.
(v) In the event that the Holding Company utilizes Assisting
Brokers to sell Shares to institutional investors in the
institutional offering, which may include the Agent, the fee
for such shares shall be 7.0% of the aggregate actual purchase
price of the securities sold through such syndicate. The Agent
will pass on to such selected broker-dealers who assist in the
institutional offering an amount competitive with gross
underwriting discounts charged at such time for comparable
amounts of stock sold at a comparable price per share in a
similar market environment. Fees with respect to purchases
effected through selected institutional broker-dealers other
than the Agent shall be transmitted by the Agent to such
selected broker-dealer. The decision to utilize selected
broker-dealers to offer and sell shares to institutional
investors will be made by the Holding Company upon
consultation with the Agent with due regard to the Holding
Company's stock distribution strategy.
Full payment of the Agent's actual and accountable expenses,
advisory fees and compensation shall be made in next day funds
on the earlier of the Closing Date or a determination by the
Holding Company to terminate or abandon the offering.
SECTION 3. PROSPECTUS; OFFERING. The Shares are to be offered in the
Offering at $10.00 per share.
SECTION 4. REPRESENTATIONS AND WARRANTIES OF THE HOLDING COMPANY AND
THE BANK. The Holding Company and the Bank jointly and severally represent and
warrant to and agree with the Agent as follows:
(a) The Holding Company and the Bank have all such power, authority,
authorizations, approvals and orders as may be required to enter into this
Agreement, to carry out the provisions and conditions hereof and to issue and
sell the capital stock of the Bank to the Holding Company and the Shares to be
sold by the Holding Company as provided herein and as described in the
Prospectus. The consummation of the Offering, the execution, delivery and
performance of this Agreement and the consummation of the transactions herein
contemplated have been duly and validly authorized by all necessary corporate
action on the part of the Holding Company and the Bank and this Agreement has
been validly executed and delivered by the Holding Company and the Bank and is
the valid, legal and binding agreement of the Holding Company and the Bank
enforceable in accordance with its terms, except to the extent, if any, that the
provisions of Sections 8 and 9 hereof may be unenforceable as against public
policy, and except to the extent that such enforceability may be limited by
bankruptcy laws, insolvency laws, or other laws affecting the enforcement of
creditors' rights generally, or the rights of creditors of financial
institutions insured by the FDIC (including the laws relating to the rights of
the contracting parties to equitable remedies).
6
(b) As of the Closing Date, the Bank shall have completed all conditions
precedent to the Offering in accordance with the Prospectus and shall have
complied in all material respects with applicable laws, regulations (except as
modified or waived in writing by Regulatory Agencies), decisions and orders,
including all terms, conditions, requirements and provisions precedent to the
Offering imposed upon it by the Regulatory Agencies as set forth in the
correspondence received from the Regulatory Agencies.
(c) The Registration Statement was declared effective by the Commission on
June __, 2000; and no stop order has been issued with respect thereto and no
proceedings therefore have been initiated or to the best knowledge of the
Holding Company threatened by the Commission. At the time the Registration
Statement, including the Prospectus contained therein (including any amendment
or supplement thereto), became effective, the Registration Statement complied as
to form in all material respects with the requirements of the 1933 Act and the
regulations promulgated thereunder and the Registration Statement including the
Prospectus contained therein (including any amendment or supplement thereto),
any Blue Sky Application or any Sales Information (as such terms are defined in
Section 8 hereof) authorized by the Holding Company or the Bank for use in
connection with the Offering did not contain an untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
to make the statements therein, in light of the circumstances under which they
were made, not misleading, and at the time any Rule 424(b) or (c) Prospectus was
filed with or mailed to the Commission for filing and at the Closing Date, the
Registration Statement including the Prospectus contained therein (including any
amendment or supplement thereto) and any Blue Sky Application or any Sales
Information authorized by the Holding Company or the Bank for use in connection
with the Offering will not contain an untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements therein,
in light of the circumstances under which they were made, not misleading;
provided, however, that the representations and warranties in this Section 4(c)
shall not apply to statements or omissions made in reliance upon and in
conformity with written information furnished to the Holding Company or the Bank
by the Agent expressly regarding the Agent for use under the caption "Sales
Agent" or written statements or omissions from any sales information or
information filed pursuant to state securities or blue sky laws or regulations
regarding the Agent.
(d) The DFI application, including the Prospectus, at the time of the
approval of the Application, including the Prospectus, by the DFI (including any
amendment or supplement thereto) and at all times subsequent thereto until the
Closing Date, will comply as to form in all material respects with all
applicable rules and regulations of the DFI (except as modified or waived in
writing by the DFI). The Application, including the Prospectus (including any
amendment or supplement thereto), does not include any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading; provided, however, that representations or
warranties in this subsection (d) shall not apply to statements or
7
omissions made in reliance upon and in conformity with written information
furnished to the Holding Company by the Agent expressly regarding the Agent for
use in the Prospectus contained in the Application under the caption "Sales
Agent" or written statements or omissions from any sales information filed
pursuant to state securities or blue sky laws or regulations regarding the
Agent.
(e) No order has been issued by the Commission, the DFI, the FRB or the
FDIC (and hereinafter reference to the FDIC shall include the BIF), or any state
regulatory authority, preventing or suspending the use of the Prospectus and no
action by or before any such government entity to revoke any approval,
authorization or order of effectiveness related to the Offering or the
Application is, to the best knowledge of the Bank or the Holding Company,
pending or threatened.
(f) At the Closing Date, the Offering will have been approved by the Boards
of Directors of both the Holding Company and the Bank, and the Holding Company
and the Bank will have completed all conditions precedent to the Offering
specified in the Applications and approvals from the Regulatory Agencies, and
with respect to the actions of the Holding Company and the Bank during the
Offering the offer and sale of the Shares will have been conducted in all
material respects in compliance with all applicable laws, regulations, decisions
and orders, including all terms, conditions, requirements and provisions
precedent to the Offering imposed upon the Holding Company or the Bank by the
Regulatory Agencies, the Commission or any regulatory authority, and in the
manner described in the Prospectus. At the Closing Date, to the best knowledge
of the Holding Company and the Bank, no person will have sought to obtain review
of the final action of the Regulatory Agencies in approving the Applications
pursuant to any applicable state or federal statute or regulation.
(g) The Holding Company has filed with the FRB the Holding Company
Application and has received, as of the Closing Date, approval of its
acquisition of the Bank from the FRB.
(h) ▇▇▇▇▇ ▇▇▇▇▇▇ & Company, LLP, which certified the financial statements
filed as part of the Registration Statement and the Applications, have advised
the Holding Company and the Bank in writing that they are, with respect to the
Holding Company and the Bank, independent certified public accountants within
the meaning of the Code of Professional Ethics of the American Institute of
Certified Public Accountants and under the 1933 Act and the regulations
promulgated thereunder.
(i) The financial statements and the schedules and notes thereto which are
included in the Registration Statement and which are a part of the Prospectus
present fairly the financial position and accumulated deficit of the Holding
Company as of the dates indicated and the results of operations and cash flows
for the periods specified. The financial statements comply in all material
respects with generally accepted accounting principles ("GAAP") applied on a
consistent basis during the periods presented except as otherwise noted therein
and present fairly in all material respects the information required to be
stated therein and are
8
consistent with the most recent financial statements and other reports filed by
the Bank with the Regulatory Agencies except that accounting principles employed
in such filings conform to requirements of such authorities and not necessarily
to GAAP. The other financial statistical and pro forma information and related
notes included in the Prospectus fairly present the information shown therein on
a basis consistent with the audited and unaudited financial statements included
in the Prospectus, and as to the pro forma adjustments, the adjustments made
therein have been properly applied on the basis described therein.
(j) Since the respective dates as of which information is given in the
Registration Statement, including the Prospectus: (i) there has not been any
material adverse change in the financial condition or in the management,
earnings, capital, properties or business affairs of the Holding Company or the
Bank considered as one enterprise, whether or not arising in the ordinary course
of business, (ii) there has not been any material change in total assets,
liabilities or equity from the amount set forth in the Prospectus; nor has the
Holding Company issued any securities or incurred any liability or obligation
for borrowings other than set forth in the Prospectus; (iii) there has not been
any material transactions entered into by the Holding Company or the Bank, other
than those set forth in the Prospectus; and (iv) the capitalization,
liabilities, assets, properties and business of the Holding Company and the Bank
conform in all material respects to the descriptions thereof contained in the
Prospectus and, neither the Bank nor the Holding Company has any material
liabilities of any kind, contingent or otherwise, except as set forth in or
contemplated by the Registration Statement and the Prospectus.
(k) The Holding Company is a corporation duly organized and validly
existing under the laws of the State of Indiana, with corporate power and
authority to own its properties and to conduct its business as described in the
Prospectus, and is duly qualified to transact business and is validly existing
in each jurisdiction in which the conduct of its business requires such
qualification unless the failure to qualify in one or more of such jurisdictions
would not have a material adverse effect on the financial condition, earnings,
capital, properties or business affairs of the Holding Company and the Bank
considered as a whole.
(l) The Bank is a bank in organization and has all conditional approvals to
transact its business. At the closing, the Bank will be a duly organized and
validly existing Indiana banking corporation, with FDIC insurance of accounts
and duly authorized to conduct its business as described in the Prospectus; the
activities of the Bank are permitted by the rules, regulations and practices of
the DFI and the FDIC; the Bank has or will obtain all licenses, permits and
other governmental authorizations required for the conduct of its business
except those that individually or in the aggregate would not materially
adversely affect the financial condition of the Holding Company and the Bank
taken as a whole; all such licenses, permits and other governmental
authorizations are in full force and effect and the Bank is in good standing
under the laws of the State of Indiana and is or will be duly qualified as a
foreign corporation to transact business in each jurisdiction in which failure
to so qualify would have a material adverse effect upon the financial condition,
earnings, capital, properties or business affairs of the Bank; all of the issued
and outstanding capital stock of the Bank
9
after the Offering will be duly and validly issued and fully paid and
nonassessable; and the Holding Company will directly own all of such capital
stock free and clear of any mortgage, pledge, lien, encumbrance, claim or
restriction. The Bank does not own equity securities or any equity interest in
any other business enterprise.
(m) The deposit accounts of the Bank are insured by the FDIC up to
applicable limits.
(n) Upon the completion of the Offering, the authorized, issued and
outstanding equity capital of the Holding Company will be as described in the
Prospectus under the caption "Capitalization," and no Shares have been or will
be issued and outstanding prior to the Closing Date; the Shares to be subscribed
for in the Offering have been duly and validly authorized for issuance, and when
issued and delivered by the Holding Company against payment of the consideration
calculated as set forth in the Prospectus, will be duly and validly issued and
fully paid and nonassessable; the issuance of the Shares is not subject to
preemptive rights; and the terms and provisions of the Shares will conform in
all material respects to the description thereof contained in the Prospectus.
Upon issuance of the Shares, good title to the Shares will be transferred from
the Holding Company to the purchaser thereof against payment therefore, subject
to such claims as may be asserted against the purchasers thereof by third party
claimants.
(o) As of the date hereof and as of the Closing Date, neither the Holding
Company nor the Bank is in violation of its articles of incorporation or its
bylaws or in material default in the performance or observance of any
obligation, agreement, covenant, or condition contained in any contract, lease,
loan agreement, indenture or other instrument to which it is a party or by which
it, or any of its property, may be bound which would result in a material
adverse change in the condition (financial or otherwise), earnings, capital,
properties or business affairs of the Holding Company or Bank considered as one
enterprise or which would materially affect their properties or assets. The
consummation of the transactions herein contemplated will not (i) conflict with
or constitute a breach of, or default under, the certificate of incorporation
and bylaws of the Holding Company or the Bank, or materially conflict with or
constitute a material breach of, or default under any material contract, lease
or other instrument to which the Holding Company or the Bank has a beneficial
interest, or any applicable law, rule, regulation or order that is material to
the financial condition of the Holding Company and the Bank on a consolidated
basis; (ii) violate any authorization, approval, judgment, decree, order,
statute, rule or regulation applicable to the Holding Company or the Bank except
for such violations which would not have a material adverse effect on the
financial condition and results of operations of the Holding Company and the
Bank on a consolidated basis; or (iii) result in the creation of any material
lien, charge or encumbrance upon any property of the Holding Company or the
Bank.
(p) No default exists, and no event has occurred which with notice or lapse
of time, or both, would constitute a default on the part of the Holding Company
or the Bank, in the due performance and observance
10
of any term, covenant or condition of any indenture, mortgage, deed of trust,
note, bank loan or credit agreement or any other instrument or agreement to
which the Holding Company or the Bank is a party or by which any of them or any
of their property is bound or affected in any respect which, in any such case,
is material to the Holding Company or the Bank considered as one enterprise, and
all such agreements are in full force and effect; and no other party to any such
agreements has instituted or, to the best knowledge of the Holding Company or
the Bank, threatened any action or proceeding wherein the Holding Company or the
Bank is alleged to be in default thereunder under circumstances where such
action or proceeding, if determined adversely to the Holding Company or the
Bank, as the case may be, would have a material adverse effect upon the Holding
Company and the Bank considered as one enterprise.
(q) The Holding Company and the Bank have good and marketable title to all
assets which are material to the business of the Holding Company and the Bank
and to those assets described in the Prospectus as owned by them free and clear
of all liens, charges, encumbrances, restrictions or other claims, except such
as are described in the Prospectus or which do not have a material adverse
effect on the business of the Holding Company and the Bank taken as a whole; and
all of the leases and subleases which are material to the business of the
Holding Company and the Bank, as described in the Registration Statement or
Prospectus, are in full force and effect.
(r) The Holding Company and the Bank are not in material violation of any
directive from the DFI, the FRB, the FDIC, the Commission or any other agency to
make any material change in the method of conducting their respective
businesses; the Holding Company and the Bank have conducted and are conducting
their respective businesses so as to comply in all material respects with all
applicable statutes and regulations (including, without limitation, regulations,
decisions, directives and orders of the DFI, the FRB, the Commission and the
FDIC) and there is no charge, investigation, action, suit or proceeding before
or by any court, regulatory authority or governmental agency or body pending or,
to the best knowledge of either the Holding Company or the Bank, threatened,
which would reasonably be expected to materially and adversely affect the
Offering, the performance of this Agreement, or the consummation of the
transactions contemplated as described in the Registration Statement, or which
would reasonably be expected to result in any material adverse change in the
financial condition or in the earnings, capital, properties or business affairs
of the Holding Company and the Bank considered as one enterprise.
(s) Neither the Bank nor the Holding Company has relied on the Agent or the
Agent's counsel with respect to any legal, tax, or accounting advice in
connection with the Offering, including without limitation as to any matter of
federal or state securities law.
(t) The Holding Company and the Bank have timely filed all required federal
and state tax returns, have paid all taxes that have become due and payable in
respect of such returns except where permitted to be
11
extended, have made adequate reserves for similar future tax liabilities and no
deficiency has been asserted with respect thereto by any taxing authority.
(u) No approval, authorization, consent or order of any regulatory or
supervisory or other public authority is required for the execution and delivery
by the Holding Company and the Bank of this Agreement, or the issuance of the
Shares, except for the approval of the Regulatory Agencies and the Commission
(which have been received) and any necessary qualification, notification, or
registration or exemption under the securities or blue sky laws of the various
states in which the shares are to be offered and except as may be required under
the rules and regulations of The Nasdaq Stock Market, Inc. ("NASDAD") or the
NASD.
(v) The Holding Company and the Bank have made appropriate arrangements for
placing the funds received from subscriptions for Shares in the designated
subscription account at The Farmers & Merchants Bank, Boswell, Indiana (the
"Escrow Agent") until the minimum number of Shares are sold and paid for, with
provision for refund to the purchasers in the event that the Offering is not
completed for whatever reason or for delivery to the Holding Company if at least
the minimum number of offered Shares are sold.
(w) Prior to the Offering, neither the Holding Company nor the Bank has:
(i) issued any securities (except as disclosed in the Prospectus); (ii) had any
material dealings with respect to sales of securities with any member of the
NASD, or any person related to or associated with such member, other than
discussions and meetings relating to the proposed Offering; (iii) entered into a
financial or management consulting agreement except as contemplated hereunder
(except as disclosed in the Prospectus); or (iv) engaged any intermediary
between the Agent and the Holding Company and the Bank in connection with the
offering of Shares and no person is being compensated in any manner for such
service.
(x) Neither the Holding Company, the Bank nor, to the best knowledge of the
Holding Company or the Bank, the employees of the Holding Company or the Bank
have made any payment of funds of the Holding Company or the Bank as a loan to
any person for the purchase of the Shares.
Any certificates signed by an officer of the Holding Company or the Bank and
delivered to the Agent or its counsel that refer to this Agreement shall be
deemed to be a representation and warranty by the Holding Company or the Bank to
the Agent as to the matters covered thereby with the same effect as if such
representation and warranty were set forth herein.
SECTION 5. REPRESENTATIONS AND WARRANTIES OF THE AGENT.
The Agent represents and warrants to the Holding Company and the Bank that:
12
(a) it is a corporation and is validly existing in good standing under the
laws of the State of New York with full corporate power and authority to provide
the services to be furnished to the Bank and the Holding Company hereunder.
(b) The execution and delivery of this Agreement and the consummation of
the transactions contemplated hereby have been duly and validly authorized by
all necessary action on the part of the Agent, and this Agreement has been duly
and validly executed and delivered by the Agent and is a legal, valid and
binding agreement of the Agent, enforceable in accordance with its terms, except
to the extent that such enforcement may be limited by bankruptcy laws,
insolvency laws, or other laws affecting the enforcement of creditors' rights
generally.
(c) Each of the Agent and its employees, agents and representatives who
shall perform any of the services hereunder shall be duly authorized and
empowered, and shall have all licenses, approvals and permits necessary to
perform such services; and the Agent is a registered selling agent in each of
the jurisdictions in which the Shares are to be offered by the Holding Company
in reliance upon the Agent as a registered selling agent as set forth in the
blue sky memorandum prepared with respect to the Offering. The Agent is a member
firm of The National Association of Securities Dealers, Inc. and is in
compliance in all material respects with all state and federal broker-dealer
regulation, and regulations of any applicable self-regulatory organization,
applicable to it and its performance of services hereunder.
(d) The execution and delivery of this Agreement by the Agent, the
consummation of the transactions contemplated hereby and compliance with the
terms and provisions hereof will not conflict with, or result in a breach of,
any of the terms, provisions or conditions of, or constitute a default (or an
event which with notice or lapse of time or both would constitute a default)
under, the articles of incorporation or bylaws of the Agent or any material
agreement, indenture or other instrument to which the Agent is a party or by
which it or its property is bound which would result in a material adverse
change in the condition (financial or otherwise) or business affairs of the
Agent.
(e) No approval of any regulatory or supervisory or other public authority
is required in connection with the Agent's execution and delivery of this
Agreement, except as may have been received.
(f) There is no suit or proceeding or charge or action before or by any
court, regulatory authority or government agency or body or, to the knowledge of
the Agent, pending or threatened, which might materially adversely affect the
Agent's performance of this Agreement.
SECTION 5.A COVENANTS OF THE HOLDING COMPANY AND THE BANK. The Holding
Company and the Bank hereby jointly and severally covenant with the Agent as
follows:
(a) The Holding Company has filed the Registration Statement with the
Commission. The Holding Company will not, at any time after the date the
Registration Statement is declared effective, file any
13
amendment or supplement to the Registration Statement without providing the
Agent and its counsel an opportunity to review such amendment or file any
amendment or supplement to which amendment the Agent or its counsel shall
reasonably object.
(b) The Bank has filed the Applications with the Regulatory Agencies. The
Bank will not, at any time after the date an Application is approved, file any
amendment or supplement to an Application without providing the Agent and its
counsel an opportunity to review such amendment or supplement or file any
amendment or supplement to which amendment or supplement the Agent or its
counsel shall reasonably object.
(c) The Holding Company and the Bank will use their best efforts to cause
any post-effective amendment to the Registration Statement to be declared
effective by the Commission and any post-effective amendment to an Application
to be approved by the Regulatory Agencies, and will immediately upon receipt of
any information concerning the events listed below notify the Agent (i) when the
Registration Statement, as amended, has become effective; (ii) when an
Application, as amended, has been approved by the Regulatory Agencies; (iii) of
the receipt of any comments from the Commission, a Regulatory Agency or any
other governmental entity with respect to the Offering or the transactions
contemplated by this Agreement; (iv) of any request by the Commission, a
Regulatory Agency or any other governmental entity for any amendment or
supplement to the Registration Statement or an Application or for additional
information; (v) of the issuance by the Commission, a Regulatory Agency or any
other governmental agency of any order or other action suspending the Offering
or the use of the Registration Statement or the Prospectus or any other filing
of the Holding Company and the Bank under applicable regulations or other
applicable law, or the threat of any such action; (vi) of the issuance by the
Commission, any Regulatory Agency or any state authority of any stop order
suspending the effectiveness of the Registration Statement or of the initiation
or threat of initiation or threat of any proceedings for that purpose; or (vii)
of the occurrence of any event mentioned in paragraph (g) below. The Holding
Company and the Bank will make every reasonable effort to prevent the issuance
by the Commission, any Regulatory Agency or any state authority of any such
order and, if any such order shall at any time be issued, to obtain the lifting
thereof at the earliest possible time.
(d) The Holding Company and the Bank will provide the Agent and its counsel
with notice of its intention to file, and reasonable time to review prior to
filing, any amendment or supplement to the any Application and will not file any
such amendment or supplement to which the Agent shall reasonably object or which
shall be reasonably disapproved by its counsel.
(e) The Holding Company and the Bank will deliver to the Agent and to its
counsel conformed copies of each of the following documents, with all exhibits:
the Applications, as originally filed and of each amendment or supplement
thereto, and the Registration Statement, as originally filed and each amendment
14
thereto. Further, the Holding Company and the Bank will deliver such additional
copies of the foregoing documents to counsel to the Agent as may be required for
any NASD filings. In addition, the Holding Company and the Bank will also
deliver to the Agent such number of copies of the Prospectus, as amended or
supplemented, as the Agent may reasonably request.
(f) The Holding Company and the Bank will comply in all material respects
with any and all terms, conditions, requirements and provisions with respect to
the Offering and the transactions contemplated thereby imposed by the
Commission, by applicable state law and regulations, and by the 1933 Act, the
Securities Exchange Act of 1934, as amended (the "1934 Act"), and the rules and
regulations of the Commission promulgated under such statutes, to be complied
with prior to or subsequent to the Closing Date; and when the Prospectus is
required to be delivered, the Holding Company and the Bank will comply in all
material respects, at their own expense, with all material requirements imposed
upon them by the Regulatory Agencies, the Commission, by applicable state law
and regulations and by the 1933 Act, the 1934 Act and the rules and regulations
of the Commission promulgated under such statutes, in each case as from time to
time in force, so far as necessary to permit the continuance of sales or dealing
in Shares during such period in accordance with the provisions hereof and the
Prospectus.
(g) If any event relating to or affecting the Holding Company or the Bank
shall occur, as a result of which it is necessary, in the reasonable opinion of
counsel for the Holding Company or the Bank or for the Agent, to amend or
supplement the Registration Statement or the Prospectus in order to make them
not misleading in light of the circumstances existing at the time of its use,
the Holding Company and the Bank will, at their expense, forthwith prepare, file
with the Commission and the Regulatory Agencies, and furnish to the Agent, a
reasonable number of copies of an amendment or amendments of, or a supplement or
supplements to, the Registration Statement and the Prospectus (in form and
substance satisfactory to counsel for the Agent after a reasonable time for
review) which will amend or supplement the Registration Statement and/or the
Prospectus so that as amended or supplemented it will not contain an untrue
statement of a material fact or omit to state a material fact necessary in order
to make the statements therein, in light of the circumstances existing at the
time, not misleading. For the purpose of this subsection, the Holding Company
and the Bank each will furnish such information with respect to itself as the
Agent may from time to time reasonably request.
(h) The Holding Company will endeavor in good faith, in consultation with
the Agent, to register or to qualify the Shares for offering and sale under the
applicable securities laws of the jurisdictions in which the Offering will be
conducted; provided, however, that the Holding Company shall not be obligated to
file any general consent to service of process or to qualify to do business in
any jurisdiction in which it is not so qualified. In each jurisdiction where any
of the Shares shall have been registered or qualified as above
15
provided, the Holding Company will make and file such statements and reports in
each year as are or may be required by the laws of such jurisdictions.
The Holding Company and the Bank and each of the directors officers and Advisory
Board members of the Holding Company and the Bank will not sell or issue,
contract to sell or otherwise dispose of, for a period of 180 days after the
date hereof, without the Agent's prior written consent, which consent shall not
be unreasonably withheld, any Shares other than in connection with any plan or
arrangement described in the Prospectus.
(i) For the period of three years from the date of this Agreement, the
Holding Company will furnish to the Agent upon request (i) a copy of each report
of the Holding Company furnished to or filed with the Commission under the 1934
Act or any national securities exchange or system on which any class of
securities of the Holding Company is listed or quoted, (ii) a copy of each
report of the Holding Company mailed to holders of Shares or nonconfidential
report filed with the Commission or a Regulatory Agency or any other supervisory
or regulatory authority or any national securities exchange or system on which
any class of the securities of the Holding Company is listed or quoted, and
(iii) from time to time, such other publicly available information concerning
the Holding Company and the Bank as the Agent may reasonably request.
(j) The Holding Company and the Bank will use the net proceeds from the
sale of the Common Shares in the manner set forth in the Prospectus under the
caption "Use of Proceeds."
(k) Prior to the Closing Date, the Holding Company and the Bank will inform
the Agent of any event or circumstances of which it is aware as a result of
which the Registration Statement and/or Prospectus, or the Applications as then
supplemented or amended, would include an untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements therein
not misleading.
(l) The Holding Company and the Bank will distribute the Prospectus or
other offering materials in connection with the offering and sale of the Common
Shares only as set forth in the Prospectus, and only in accordance with the 1933
Act and the 1934 Act and the rules and regulations promulgated under such
statutes, and the laws of any state in which the shares are qualified for sale.
(m) The Holding Company shall register its Shares under Section 12(d) of
the 1934 Act, concurrent with the effective date of the Registration Statement.
The Holding Company shall maintain the effectiveness of such registration for
not less than three years.
16
(n) For so long as the Holding Company's Shares are registered under the
1934 Act, the Holding Company will furnish to its shareholders, as soon as
practicable after the end of each fiscal year, such reports and other
information as are required to be furnished to its stockholders under the 1934
Act (including consolidated financial statements of the Holding Company and its
subsidiaries, certified by independent public accountants).
(o) The Holding Company will comply with the provisions of Rule 158 of the
1933 Act.
(p) The Holding Company will use its best efforts to obtain approval for
and maintain quotation of the Shares on the Nasdaq Bulletin Board effective on
or prior to the Closing Date.
(q) The Bank will maintain appropriate arrangements with the Escrow Agent
for depositing all funds received from persons mailing subscriptions for or
orders to purchase Shares in the Offering as described in the Prospectus until
the Closing Date and satisfaction of all conditions precedent to the release of
the Bank's obligation to refund payments received from persons subscribing for
or ordering Shares in the Offering as described in the Prospectus.
(r) The Holding Company will qualify as a bank holding company under the
BHCA.
(s) The Holding Company and the Bank will take such actions and furnish
such information as are reasonably requested by the Agent in order for the Agent
to ensure compliance with the "Interpretation of the Board of Governors of the
NASD on Free Riding and Withholding."
(t) The Holding Company and the Bank will conduct their businesses in
compliance in all material respects with all applicable federal and state laws,
rules, regulations, decisions, directives and orders including, all decisions,
directives and orders of the Commission, the DFI, the FRB and the FDIC.
(u) The Bank will not amend the Offering without notifying the Agent prior
thereto.
(v) The Holding Company will not deliver the Shares until the Holding
Company and the Bank have satisfied or caused to be satisfied each condition set
forth in Section 7A hereof, unless such condition is waived in writing by the
Agent.
SECTION 6. PAYMENT OF EXPENSES. Whether or not the Offering is
completed or the sale of the Shares by the Holding Company is consummated, the
Holding Company and the Bank will pay for all expenses incident to the
performance of this Agreement, including without limitation: (a) the preparation
and filing of the Applications; (b) the preparation, printing, filing, delivery
and shipment of the Registration
17
Statement, including the Prospectus, and all amendments and supplements thereto;
(c) all filing fees and expenses in connection with the qualification or
registration of the Shares for offer and sale by the Holding Company under the
securities or "blue sky" laws, including without limitation filing fees,
reasonable legal fees and disbursements of counsel in connection therewith, and
in connection with the preparation of a blue sky law survey; (d) the filing fees
of the NASD; (e) necessary expenses, as determined by the Holding Company,
related to "road shows", up to a maximum of $7,000; and (f) the actual out-of-
pocket expenses of the Agent up to a maximum of $7,000. Subject to such maximum
limitation, any such expense incurred by the Agent shall be reimbursed by the
Holding Company and the Bank, except for the fees and expenses of its counsel.
SECTION 7A. CONDITIONS TO THE AGENTS OBLIGATIONS. The obligations of
the Agent hereunder and the occurrence of the Closing and the Offering are
subject to the condition that all representations and warranties and other
statements of the Holding Company and the Bank herein contained are at and as of
the commencement of the Offering and at and as of the Closing Date, true and
correct in all respects, the condition that the Holding Company and the Bank
shall have performed all of their obligations hereunder to be performed on or
before such dates and to the following further conditions:
(a) The Registration Statement shall have been declared effective by the
Commission and the Applications approved by the Regulatory Agencies not later
than 5:30 p.m. on the date of this Agreement, and no stop order or other action
suspending the effectiveness of the Registration Statement shall have been
issued under the 1933 Act or proceedings therefore initiated or, to the Holding
Company's or the Bank's best knowledge, threatened by the Commission or any
state authority and no order or other action suspending the authorization for
use of the Prospectus or the consummation of the Offering shall have been issued
or proceedings therefore initiated or, to the Holding Company's or the Bank's
best knowledge, threatened by the Regulatory Agencies, the Commission, or any
other governmental body.
(b) At the Closing Date, the Agent shall have received:
(1) The favorable opinion, dated as of the Closing Date, of ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP, counsel for the Holding Company and the Bank,
in form and substance satisfactory to counsel for the Agent to the effect that:
(i) The Holding Company is a corporation duly organized and
validly existing and in good standing under the laws of the
State of Indiana, with corporate power and authority to own
its properties and to conduct its business as described in the
Prospectus, and is duly qualified to transact business and is
in good standing in each jurisdiction in which the conduct of
its business requires such qualification and in which the
failure to qualify would
18
have a material adverse effect on the financial condition,
earnings, capital, properties or business affairs of the
Holding Company.
(ii) The Bank is a duly organized and validly existing Indiana
banking corporation with full power and authority to own its
properties and to conduct its business as described in the
Prospectus and to enter into this Agreement and perform its
obligations hereunder; the activities of the Bank as described
in the Prospectus are permitted by the rules, regulations and
practices of the Regulatory Agencies; the issuance and sale of
the capital stock of the Bank to the Holding Company has been
duly and validly authorized by all necessary corporate action
on the part of the Holding Company and the Bank and, upon
payment therefore as described in the Prospectus, will be
validly issued, fully paid and nonassessable and will be owned
of record and beneficially by the Holding Company, free and
clear of any mortgage, pledge, lien, encumbrance, claim or
restriction.
(iii) The deposit accounts of the Bank are insured by the FDIC
up to the maximum amount allowed by law and to such no
proceedings for the termination or revocation of such
insurance are pending or threatened.
(iv) Upon the completion of the Offering, the authorized,
issued and outstanding capital stock of the Holding Company
and the Bank will be as set forth in the Prospectus under the
caption "Capitalization," and no Shares have been or will be
issued and outstanding prior to the Closing Date; the Shares
of the Holding Company to be subscribed for in the Offering
have been duly and validly authorized for issuance, and when
issued and delivered by the Holding Company against payment of
the consideration therefor, will be fully paid and
nonassessable; and the issuance of the Shares is not subject
to preemptive rights.
(v) The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have been
duly authorized by all necessary action on the part of the
Holding Company and the Bank; and this Agreement constitutes a
valid, legal and binding obligation of each of the Holding
Company and the Bank, enforceable in accordance with its
terms, except to the extent that the provisions of Sections 8
and 9 hereof may be unenforceable as against public policy,
and except to the extent that such enforceability may be
limited by bankruptcy laws, insolvency laws, or other laws
affecting the enforcement of creditors' rights generally, or
the rights of creditors of financial institutions insured by
the FDIC (including the laws relating to the rights of the
contracting parties to equitable remedies).
19
(vi) Subject to the satisfaction of the conditions to the
Regulatory Agencies' approval of the Applications, no further
approval, registration, authorization, consent or other order
of any federal regulatory agency, public board or body is
required in connection with the execution and delivery of this
Agreement, the offer, sale and issuance of the Shares and the
consummation of the Offering.
(vii) The Applications, including the Prospectus as filed with
the Regulatory Agencies, been approved by the Regulatory
Agencies. The FRB has issued its order of approval under the
BHCA, and the purchase by the Holding Company of all of the
issued and outstanding capital stock of the Bank has been
authorized by the FRB and no action has been taken, or to such
counsel's knowledge is pending or threatened, to revoke any
such authorization or approval.
(viii) The Registration Statement has become effective under
the 1933 Act, no stop order suspending the effectiveness of
the Registration Statement has been issued, and to the best of
such counsel's knowledge no proceedings for that purpose have
been instituted or threatened.
(ix) The consummation of the Offering and the transactions
contemplated thereunder will have no material tax consequences
to the Holding Company, the Bank or any person subscribing for
shares in the Offering.
(x) The terms and provisions of the Shares conform to the
description thereof contained in the Registration Statement
and the Prospectus and such description describes in all
material respects the rights of the holders thereof, the
information in the Prospectus under the caption "Articles of
Incorporation" to the extent that it constitutes matters of
law or legal conclusions has been prepared by such counsel and
is accurate in all material respects; and the forms of
certificates proposed to be used to evidence the Shares are in
due and proper form.
(xi) At the time the Applications, including the Prospectus
contained therein, were approved, the Applications (as amended
or supplemented) complied as to form in all material respects
with the requirements of the Regulatory Agencies and all
applicable laws, rules and regulations and decisions and
orders of the Regulatory Agencies, except as modified or
waived in writing by the Regulatory Agencies, (other than the
financial statements, notes to financial statements, financial
tables and other financial and statistical data included
therein as to which counsel need express no opinion and other
than compliance
20
with state securities or Blue Sky laws as to which such
counsel need express no opinion). To such counsel's knowledge,
no person has sought to obtain regulatory or judicial review
of the final action of the Regulatory Agencies approving the
Applications.
(xii) At the time that the Registration Statement became
effective (i) the Registration Statement (as amended or
supplemented) (other than the financial statements, notes to
financial statements, financial tables or other financial and
statistical data included therein as to which counsel need
express no opinion), complied as to form in all material
respects with the requirements of the 1933 Act and the rules
and regulations promulgated thereunder; and (ii) the
Prospectus (other than the financial statements, notes to
financial statements, financial tables and other financial and
statistical data included therein, as to which counsel need
express no opinion) complied as to form in all material
respects with the requirements of the 1933 Act and the rules
and regulations promulgated thereunder, and the rules,
regulations and decisions and orders of the Regulatory
Agencies, except as modified or waived in writing by the
Regulatory Agencies.
(xiii) There are no legal or governmental proceedings pending,
or threatened (i) asserting the invalidity of this Agreement
or, (ii) seeking to prevent the Offering.
(xiv) The information in the Prospectus under the caption
"Supervision and Regulation", to the extent that it
constitutes matters of law, summaries and supervision of legal
matters, documents or proceedings, or legal conclusions, has
been prepared by such counsel and is accurate in all material
respects (except as to the financial statements and other
financial data included therein as to which such counsel need
express no opinion).
(xv) The Holding Company and the Bank have obtained all
material licenses, permits and other governmental
authorizations required for the conduct of their respective
businesses as described in the Registration Statement and the
Prospectus, except where the failure to obtain such licenses,
permits and other governmental authorizations would not have a
material adverse effect on the financial condition of the
Holding Company or the Bank considered as one enterprise, or
on the earnings, capital, properties or business affairs of
the Holding Company or the Bank considered as one enterprise,
and all such licenses, permits and other governmental
authorizations are in full force and effect and the Holding
Company and the Bank are in all material respects complying
therewith.
(xvi) Neither the Holding Company nor the Bank is in violation
of its articles of incorporation or its bylaws or to the best
of such counsel's knowledge, in violation of any
21
obligation, agreement, covenant or condition contained in any
material contract, indenture, mortgage, loan agreement, note,
lease or other instrument to which it is a party or by which
it or its property may be bound, which violation would have a
material adverse effect on the financial condition of the
Holding Company or the Bank considered as one enterprise, or
on the earnings, capital, properties or business affairs of
the Holding Company and the Bank considered as one enterprise;
the execution and delivery of this Agreement by the Holding
Company and the Bank, the incurrence of the obligations herein
set forth and the consummation of the transactions
contemplated herein, will not conflict with, constitute a
breach of, or default under, or result in the creation or
imposition of any material lien, charge or encumbrance upon
any property or assets of the Holding Company or the Bank
which are material to their business considered as one
enterprise, pursuant to any contract, indenture, mortgage,
loan agreement, note, lease or other instrument to which the
Holding Company or the Bank is a party or by which any of them
may be bound, or to which any of the property or assets of the
Holding Company or the Bank is subject. In addition, such
action will not result in any material violation of the
provisions of the articles of incorporation or bylaws of the
Holding Company or the Bank or any material violation of any
applicable law, act, regulation or to such counsel's
knowledge, order or court order, writ, injunction or decree.
(xvii) To the best of counsel's knowledge, the Holding Company
and the Bank are not in violation in any material respect of
any directive from any Regulatory Agency to make any material
change in the method of conducting their business.
(2) The letter of ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, LLP, special
counsel for the Holding Company and the Bank, in form and substance to the
effect that:
In addition, during the preparation of the Registration Statement and
the Prospectus, ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, LLP, participated in
conferences with certain officers of and other representatives of the Bank and
the Holding Company, counsel to the Agent, representatives of the independent
public accountants for the Bank and the Holding Company and representatives of
the Agent at which the contents of the Registration Statement and the Prospectus
and related matters were discussed and, although ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ &
▇▇▇▇▇▇▇▇, LLP, is not passing upon and does not assume the accuracy of the
statements contained in the Registration Statement and Prospectus, on the basis
of the foregoing without independent verification (relying as to materiality as
to factual matters on certificates of officers and other factual representations
by the Bank and the Holding Company), nothing has come to the attention of ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, LLP, that caused ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ &
▇▇▇▇▇▇▇▇, LLP, to believe that the Registration Statement, at the time it was
declared effective by the SEC or the Prospectus or as of its date, contained or
contains any untrue statement of a material fact or omitted to state any
material fact required to
22
be stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading (it being understood
that counsel need express no comment or opinion with respect to the financial
statements, schedules and other financial and statistical data included, or
statistical or appraisal methodology employed, in the Registration Statement or
Prospectus).
The opinion shall be limited to matters governed by the laws of the
United States or the State of Indiana. In rendering such opinion, such counsel
may rely (A) as to matters involving the application of laws of any jurisdiction
other than the United States or Indiana, to the extent such counsel deems proper
and specified in such opinion, upon the opinion of other counsel reasonably
acceptable to the Agent and the Agent's counsel, as long as such other opinion
indicates that the Agent may rely on the opinion, and (B) as to matters of fact,
to the extent such counsel deems proper, on certificates of responsible officers
of the Holding Company and the Bank and public officials; provided copies of any
such opinion(s) or certificates of public officials are delivered to you
together with the opinion to be rendered hereunder by counsel to the Holding
Company and the Bank. The opinion of such counsel for the Holding Company shall
state that it has no reason to believe that the Agent is not justified in
relying thereon.
(3) The favorable opinion, dated as of the Closing Date, of
counsel for the Agent, with respect to such matters as the Agent may reasonably
require, such opinion may rely as to matters of fact, upon certificates of
officers and directors of the Holding Company and the Bank delivered pursuant
hereto or as such counsel may reasonably request.
(c) Concurrently with the execution of this Agreement, the Agent shall
receive a letter from ▇▇▇▇▇ ▇▇▇▇▇▇ and Company LLP dated the date hereof and
addressed to the Agent, (i) such letter confirming that ▇▇▇▇▇ ▇▇▇▇▇▇ and Company
LLP is a firm of independent public accountants within the meaning of the Code
of Professional Ethics of the American Institute of Certified Public
Accountants, the 1933 Act and the regulations promulgated thereunder, and no
information concerning its relationship with or interests in the Holding Company
or the Bank is required by the Application or Item 10 of the Registration
Statement, and stating in effect that in ▇▇▇▇▇ ▇▇▇▇▇▇ and Company LLP's opinion
the financial statements of the Holding Company included in the Prospectus
comply as to form in all material respects with the applicable accounting
requirements of the 1933 Act, the 1934 Act and the related published rules and
regulations of the Commission thereunder and generally accepted accounting
principles; (ii) stating in effect that, on the basis of certain agreed upon
procedures (but not an audit examination in accordance with generally accepted
auditing standards) consisting of a reading of the latest available unaudited
interim financial statements of the Holding Company and the Bank prepared by the
Holding Company and the Bank, a reading of the minutes of the meetings of the
Board of Directors of the Holding Company and the Bank, a review of interim
financial information in accordance with Statement on Auditing Standards No. 71,
and consultations with officers of the Holding Company and the Bank responsible
for financial and accounting matters, nothing came to their
23
attention which caused them to believe that: (A) such unaudited financial
statements, including Recent Developments, if any, are not in conformity with
generally accepted accounting principles applied on a basis substantially
consistent with that of the audited financial statements included in the
Prospectus; or (B) during the period from the date of the latest unaudited
consolidated financial statements included in the Prospectus to a specified date
not more than five business days prior to the date hereof, there was any
material increase in borrowings (defined as securities sold under agreements to
repurchase and any other form of debt other than deposits) of the Holding
Company or the Bank (other than as disclosed in the Prospectus); or (C) there
was any decrease in retained earnings of the Bank at the date of such letter as
compared with amounts shown in the latest unaudited statement of condition
included in the Prospectus or there was any decrease in net income or net
interest income of the Bank for the number of full months commencing immediately
after the period covered by the latest unaudited income statement included in
the Prospectus and ended on the latest month ending prior to the date of the
Prospectus or in such letter as compared to the corresponding period in the
preceding year; and (iii) stating that, in addition to the audit examination
referred to in its opinion included in the Prospectus and the performance of the
procedures referred to in clause (ii) of this subsection (D), they have compared
with the general accounting records of the Holding Company and/or the Bank, as
applicable, which are subject to the internal controls of the Holding Company
and/or the Bank, as applicable, accounting system and other data prepared by the
Holding Company and/or the Bank, as applicable, directly from such accounting
records, to the extent specified in such letter, such amounts and/or percentages
set forth in the Prospectus as the Agent may reasonably request, and they have
found such amounts and percentages to be in agreement therewith (subject to
rounding).
(d) At the Closing Date, the Agent shall receive letters from ▇▇▇▇▇ ▇▇▇▇▇▇
and Company LLP dated the Closing Date, addressed to the Agent, confirming the
statements made by its letter delivered by it pursuant to subsection (f) of this
Section 7A, the "specified date" referred to in clause (ii)(B) thereof to be a
date specified in such letter, which shall not be more than five business days
prior to the Closing Date.
At the Closing Date counsel to the Agent shall have been furnished with such
documents and opinions as counsel for the Agent may require for the purpose of
enabling them to advise the Agent with respect to the issuance and sale of the
Shares as herein contemplated and related proceedings, or in order to evidence
the accuracy of any of the representations and warranties, or the fulfillment of
any of the conditions herein contained.
(f) At the Closing Date, the Agent shall receive a certificate of the Chief
Executive Officer and Chief Financial Officer of each of the Holding Company and
the Bank, dated the Closing Date, to the effect that (i) they have carefully
examined the Prospectus and at the time the Prospectus became authorized for
final use, the Prospectus did not contain any untrue statement of a material
fact or omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were
24
made, not misleading; (ii) there has not been, since the respective dates as of
which information is given in the Prospectus, any material adverse change in the
financial condition or in the management, earnings, capital, properties,
business prospects or business affairs of the Holding Company or the Bank,
considered as one enterprise, whether or not arising in the ordinary course of
business; (iii) the representations and warranties contained in Section 4 of
this Agreement are true and correct with the same force and effect as though
made at and as of the Closing Date; (iv) the Holding Company and the Bank have
complied in all material respects with all material agreements and satisfied all
conditions on its part to be performed or satisfied at or prior to the Closing
Date including the conditions contained in this Section 7A; (v) no stop order
has been issued or, to the best of their knowledge, is threatened, by the
Commission, a Regulatory Agency or any other governmental body; (vi) no order
suspending the Offering, the acquisition of all of the shares of the Bank by the
Holding Company or the effectiveness of the Prospectus has been issued and to
the best of their knowledge, no proceedings for any such purpose have been
initiated or threatened by any Regulatory Agency or any other federal or state
authority; (vii) to the best of their knowledge, no person has sought to obtain
regulatory or judicial review of the action of the DFI, FRB or FDIC in approving
the Applications.
(g) The Holding Company or the Bank shall not have sustained since the date
of the latest audited financial statements included in the Registration
Statement and Prospectus, any material loss or interference with its business
from fire, explosion, flood or other calamity, whether or not covered by
insurance, or from any labor dispute or court or governmental action, order or
decree, otherwise than as set forth in the Registration Statement and the
Prospectus, and since the respective dates as of which information are given in
the Registration Statement and the Prospectus, there shall not have been any
material change in the long-term debt of the Holding Company or the Bank or any
material change, or any development, involving a prospective material change in
or affecting the general affairs of the management, financial position,
shareholders' equity or results of operations of the Holding Company or the
Bank, otherwise than as set forth or contemplated in the Registration Statement
and the Prospectus, the effect of which, in any such case described above, is in
the Agent's reasonable judgment sufficiently material and adverse as to make it
impracticable or inadvisable to proceed with the Offering or the delivery of the
Shares on the terms and in the manner contemplated in the Prospectus.
(h) Prior to and at the Closing Date: (i) in the reasonable opinion of the
Agent, there shall have been no material adverse change in the management,
financial condition or in the earnings, capital, properties or business affairs
of the Holding Company or the Bank independently, or of the Holding Company and
the Bank, considered as one enterprise, from that as of the latest dates as of
which such condition is set forth in the Prospectus, except as referred to
therein; (ii) there shall have been no material transaction entered into by the
Holding Company and the Bank, considered as one enterprise, from the latest date
as of which the financial condition of the Holding Company or the Bank is set
forth in the Prospectus other than transactions
25
referred to or contemplated therein; (iii) the Holding Company or the Bank shall
not have received from the DFI, FRB or the FDIC any direction (oral or written)
to make any material change in the method of conducting their business with
which it has not complied in all material respects (which direction, if any,
shall have been disclosed to the Agent) and which would reasonably be expected
to have a material and adverse effect on the management, condition (financial or
otherwise) or on the earnings, capital, properties or business affairs of the
Holding Company or the Bank considered as one enterprise; (iv) neither the
Holding Company nor the Bank shall have been in default (nor shall an event have
occurred which, with notice or lapse of time or both, would constitute a
default) under any provision of any agreement or instrument relating to any
material outstanding indebtedness; (v) no action, suit or proceedings, at law or
in equity or before or by any federal or state commission, board or other
administrative agency, shall be pending or, to the knowledge of the Holding
Company or the Bank, threatened against the Holding Company or the Bank or
affecting any of their properties wherein an unfavorable decision, ruling or
finding would reasonably be expected to have a material and adverse effect on
the management, financial condition or on the earnings, capital, properties or
business affairs of the Holding Company or the Bank, considered as one
enterprise; and (vi) the Shares have been qualified or registered for offering
and sale under the securities or blue sky laws of the jurisdictions as to which
the Holding Company and the Agent shall have agreed.
(i) At or prior to the Closing Date, the Agent shall receive (i) a copy of
the letters from the DFI and FDIC approving the Applications, (ii) a copy of the
order from the Commission declaring the Registration Statement effective, (iii)
a copy of certificate of corporate existence for the Bank from the DFI, (iv) a
certificate of good standing from the State of Indiana evidencing the good
standing of the Holding Company and (v) a copy of the letter from the FRB
approving the Holding Company Application.
(j) Subsequent to the date hereof, there shall not have occurred any of the
following: (i) a suspension or limitation in trading in securities generally on
the New York Stock Exchange or American Stock Exchange or in the
over-the-counter market, or quotations halted generally on the Nasdaq Stock
Market, or minimum or maximum prices for trading have been fixed, or maximum
ranges for prices for securities have been required by either of such exchanges
or the NASD or by order of the Commission or any other governmental authority;
(ii) a general moratorium on the operations of commercial banks or other
federally-insured financial institutions or general moratorium on the withdrawal
of deposits from commercial banks or other federally-insured financial
institutions declared by either federal or state authorities; (iii) the
engagement by the United States in hostilities which have resulted in the
declaration, on or after the date hereof, of a national emergency or war; or
(iv) a material decline in the price of equity or debt securities if the effect
of any of (i) through (iv) herein, in the Agent's reasonable judgment, makes it
impracticable or inadvisable to proceed with the Offering or the delivery of the
Shares on the terms and in the manner contemplated in the Registration Statement
and the Prospectus.
26
SECTION 7B. CONDITIONS TO THE HOLDING COMPANY AND THE BANK'S
OBLIGATIONS.
The obligations of the Holding Company and the Bank hereunder are
subject to the accuracy of the representations and warranties of the Agent, to
the performance by the Agent of its obligations hereunder, and to the
satisfaction of the conditions contained in paragraph (a) of Section 7A, above.
SECTION 8. INDEMNIFICATION.
(a) The Holding Company and the Bank jointly and severally agree to
indemnify and hold harmless the Agent, its respective officers and directors,
employees and agents, and each person, if any, who controls the Agent within the
meaning of Section 15 of the 1933 Act or Section 20(a) of the 1934 Act, against
any and all loss, liability, claim, damage or expense whatsoever, joint or
several, that the Agent or any of them may suffer or to which the Agent and any
such persons may become subject under all applicable federal or state laws or
otherwise, and to promptly reimburse the Agent and any such persons upon written
demand for any expense (including reasonable fees and disbursements of counsel)
incurred by the Agent or any of them in connection with investigating, preparing
or defending any actions, proceedings or claims (whether commenced or
threatened) to the extent such losses, claims, damages, liabilities or actions:
(i) arise out of or are based upon any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement (or any
amendment or supplement thereto), preliminary or final Prospectus (or any
amendment or supplement thereto), the Application (or any amendment or
supplement thereto), the Holding Company Application or any instrument or
document executed by the Holding Company or the Bank or based upon written
information supplied by the Holding Company or the Bank filed in any state or
jurisdiction to register or qualify any or all of the Shares or to claim an
exemption therefrom or provided to any state or jurisdiction to exempt the
Holding Company as a broker-dealer or its officers, directors and employees as
broker-dealers or agent, under the securities laws thereof (collectively, the
"Blue Sky Application"), or any document, advertisement, oral statement or
communication ("Sales Information") prepared, made or executed by or on behalf
of the Holding Company or the Bank with their consent or based upon written or
oral information furnished by or on behalf of the Holding Company or the Bank,
whether or not filed in any jurisdiction, in order to qualify or register the
Shares or to claim an exemption therefrom under the securities laws thereof;
(ii) arise out of or are based upon the omission or alleged omission to state in
any of the foregoing documents or information a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading; or (iii) arise from
any theory of liability whatsoever relating to or arising from or based upon the
Registration Statement (or any amendment or supplement thereto), preliminary or
final Prospectus (or any amendment or supplement thereto), the Applications (or
any amendment or supplement thereto), any Blue Sky Application or Sales
Information or other documentation distributed in connection with the Offering;
provided, however, that no indemnification is required under this paragraph (a)
to the extent such losses, claims, damages, liabilities or actions arise out of
or are based upon any untrue material statement or alleged untrue material
27
statement in, or material omission or alleged material omission from, the
Registration Statement (or any amendment or supplement thereto), preliminary or
final Prospectus (or any amendment or supplement thereto), the Application, any
Blue Sky Application or Sales Information made in reliance upon and in
conformity with information furnished in writing to the Holding Company or the
Bank by the Agent or its counsel regarding the Agent, provided, that it is
agreed and understood that the only information furnished in writing to the
Holding Company or the Bank by the Agent regarding the Agent is set forth in the
Prospectus under the caption "Sales Agent"; and, provided further, that neither
the Holding Company nor the Bank should be liable under this Section 8 in
respect of any losses, claims, damages, liabilities, actions or expenses to the
extent same is determined, in a final judgment by a court of competent
jurisdiction, to have resulted from the gross negligence or bad faith of the
Agent.
(b) The Agent agrees to indemnify and hold harmless the Holding Company and
the Bank, their directors and officers and each person, if any, who controls the
Holding Company or the Bank within the meaning of Section 15 of the 1933 Act or
Section 20(a) of the 1934 Act against any and all loss, liability, claim, damage
or expense whatsoever (including but not limited to settlement expenses), joint
or several, which they, or any of them, may suffer or to which they, or any of
them may become subject under all applicable federal and state laws or
otherwise, and to promptly reimburse the Holding Company, the Bank, and any such
persons upon written demand for any expenses (including reasonable fees and
disbursements of counsel) incurred by them, or any of them, in connection with
investigating, preparing or defending any actions, proceedings or claims
(whether commenced or threatened) to the extent such losses, claims, damages,
liabilities or actions: (i) arise out of or are based upon any untrue statement
or alleged untrue statement of a material fact contained in the Registration
Statement (or any amendment or supplement thereto), the Application (or any
amendment or supplement thereto), the preliminary or final Prospectus (or any
amendment or supplement thereto), any Blue Sky Application or Sales Information,
(ii) are based upon the omission or alleged omission to state in any of the
foregoing documents a material fact required to be stated therein or necessary
to make the statements therein, in the light of the circumstances under which
they were made, not misleading, or (iii) arise from any theory of liability
whatsoever relating to or arising from or based upon the Registration Statement
(or any amendment or supplement thereto), preliminary or final Prospectus (or
any amendment or supplement thereto), the Application (or any amendment or
supplement thereto), or any Blue Sky Application or Sales Information or other
documentation distributed in connection with the Offering; provided, however,
that the Agent's obligations under this Section 8(b) shall exist only if and
only to the extent that such untrue statement or alleged untrue statement was
made in, or such material fact or alleged material fact was omitted from, the
Registration Statement (or any amendment or supplement thereto), the preliminary
or final Prospectus (or any amendment or supplement thereto), the Application
(or any amendment or supplement thereto), any Blue Sky Application or Sales
Information in reliance upon and in conformity with information furnished in
writing to the Holding Company or the Bank by the Agent or its counsel regarding
the Agent, provided, that it is agreed and understood that the only information
furnished in writing to the Holding
28
Company or the Bank by the Agent regarding the Agent is set forth in the
Prospectus under the caption "Sales Agent," provided further that the Holding
Company and the Bank also agree that neither The Agent, nor any of its
affiliates, nor officer, director, employee or agent of The Agent or any of its
affiliates, nor any person controlling The Agent or any of its affiliates, shall
have any liability to the Holding Company or the Bank for or in connection with
such engagement except for any such liability for losses, claims, damages,
liabilities or expenses incurred by the Holding Company that is finally
judicially determined to have resulted from gross negligence or bad faith of The
Agent. Notwithstanding the foregoing, The Agent shall not be required to
indemnify or reimburse the Holding Company for expenses hereunder in an amount,
in the aggregate, in excess of any fees actually paid pursuant to Section 2
above. The foregoing shall be in addition to any rights that The Agent or any
agent thereof may have at common law or otherwise.
(c) Each indemnified party shall give prompt written notice to each
indemnifying party of any action, proceeding, claim (whether commenced or
threatened), or suit instituted against it in respect of which indemnity may be
sought hereunder, but failure to so notify an indemnifying party shall not
relieve it from any liability which it may have on account of this Section 8 or
otherwise. An indemnifying party may participate at its own expense in the
defense of such action. In addition, if it so elects within a reasonable time
after receipt of such notice, an indemnifying party, jointly with any other
indemnifying parties receiving such notice, may assume defense of such action
with counsel chosen by it and approved by the indemnified parties that are
defendants in such action, unless such indemnified parties object to such
assumption on the ground that there may be legal defenses reasonably available
to them that are different from or in addition to those available to such
indemnifying party. If an indemnifying party assumes the defense of such action,
the indemnifying parties shall not be liable for any fees and expenses of
counsel for the indemnified parties incurred thereafter in connection with such
action, proceeding or claim, other than reasonable costs of investigation. In no
event shall the indemnifying parties be liable for the fees and expenses of more
than one separate firm of attorneys for all indemnified parties in connection
with any one action, proceeding or claim or separate but similar or related
actions, proceedings or claims in the same jurisdiction arising out of the same
general allegations or circumstances.
(d) The agreements contained in this Section 8 and in Section 9 hereof and
the representations and warranties of the Holding Company and the Bank set forth
in this Agreement shall remain operative and in full force and effect regardless
of: (i) any investigation made by or on behalf of the Agent or its officers,
directors or controlling persons, agent or employees or by or on behalf of the
Holding Company or the Bank or any officers, directors or controlling persons,
agent or employees of the Holding Company or the Bank; (ii) delivery of and
payment hereunder for the Shares; or (iii) any termination of this Agreement.
29
SECTION 9. CONTRIBUTION. In order to provide for just and equitable
contribution in circumstances in which the indemnification provided for in
Section 8 is due in accordance with its terms but is for any reason held by a
court to be unavailable from the Holding Company, the Bank or the Agent, the
Holding Company, the Bank and the Agent shall contribute to the aggregate
losses, claims, damages and liabilities (including any investigation, legal and
other expenses incurred in connection with, and any amount paid in settlement
of, any action, suit or proceeding, but after deducting any contribution
received by the Holding Company, the Bank or the Agent from persons other than
the other parties thereto, who may also be liable for contribution) in such
proportion so that the Agent is responsible for that portion represented by the
percentage that the fees paid to the Agent pursuant to Section 2 of this
Agreement (not including expenses) bears to the gross proceeds received by the
Holding Company from the sale of the Shares in the Offering, and the Holding
Company and the Bank shall be responsible for the balance. If, however, the
allocation provided above is not permitted by applicable law, then each
indemnifying party shall contribute to such amount paid or payable by such
indemnified party in such proportion as is appropriate to reflect not only such
relative fault of the Holding Company and the Bank on the one hand and the Agent
on the other in connection with the statements or omissions which resulted in
such losses, claims, damages or liabilities (or actions, proceedings or claims
in respect thereto), but also the relative benefits received by the Holding
Company and the Bank on the one hand and the Agent on the other from the
Offering (before deducting expenses). The relative fault shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Holding Company and/or the Bank on the
one hand or the Agent on the other and the parties' relative intent, good faith,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The Holding Company, the Bank and the Agent agree that it
would not be just and equitable if contribution pursuant to this Section 9 were
determined by pro-rata allocation or by any other method of allocation which
does not take into account the equitable considerations referred to above in
this Section 9. The amount paid or payable by an indemnified party as a result
of the losses, claims, damages or liabilities (or actions, proceedings or claims
in respect thereof) referred to above in this Section 9 shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any such action, proceeding
or claim. It is expressly agreed that the Agent shall not be liable for any
loss, liability, claim, damage or expense or be required to contribute any
amount pursuant to Section 8(b) or this Section 9 which in the aggregate exceeds
the amount paid (excluding reimbursable expenses) to the Agent under this
Agreement. It is understood that the above stated limitation on the Agent's
liability is essential to the Agent and that the Agent would not have entered
into this Agreement if such limitation had not been agreed to by the parties to
this Agreement. No person found guilty of any fraudulent misrepresentation
(within the meaning of Section 11(f) of the ▇▇▇▇ ▇▇▇) shall be entitled to
contribution from any person who was not found guilty of such fraudulent
misrepresentation. The obligations of the Holding Company, the Bank and the
Agent under this Section 9 and under Section 8 shall be in addition to any
liability which the Holding Company, the Bank and the Agent may otherwise have.
For purposes of this Section 9,
30
each of the Agent's, the Holding Company's or the Bank's officers and directors
and agents and each person, if any, who controls the Agent or the Holding
Company or the Bank within the meaning of the 1933 Act and the 1934 Act shall
have the same rights to contribution as the Agent, the Holding Company or the
Bank. Any party entitled to contribution, promptly after receipt of notice of
commencement of any action, suit, claim or proceeding against such party in
respect of which a claim for contribution may be made against another party
under this Section 9, will notify such party from whom contribution may be
sought, but the omission to so notify such party shall not relieve the party
from whom contribution may be sought from any other obligation it may have
hereunder or otherwise than under this Section 9.
SECTION 10. SURVIVAL OF AGREEMENTS, REPRESENTATIONS AND INDEMNITIES.
The respective indemnities of the Holding Company, the Bank and the Agent and
the representations and warranties and other statements of the Holding Company,
the Bank and the Agent set forth in or made pursuant to this Agreement shall
remain in full force and effect, regardless of any termination or cancellation
of this Agreement or any investigation made by or on behalf of the Agent, the
Holding Company, the Bank or any controlling person referred to in Section 8
hereof, and shall survive the issuance of the Shares, and any successor or
assign of the Agent, the Holding Company, the Bank, and any such controlling
person shall be entitled to the benefit of the respective agreements,
indemnities, warranties and representations.
SECTION 11. TERMINATION. The Agent may terminate this Agreement by
giving the notice indicated below in this Section 11 at any time after this
Agreement becomes effective as follows:
(a) In the event the Holding Company fails to sell the required minimum
number of the Shares within the period specified by the Prospectus or as
required by applicable law, this Agreement shall terminate upon refund by the
Holding Company to each person who has subscribed for or ordered any of the
Shares the full amount which it may have received from such person as provided
in the Prospectus, and no party to this Agreement shall have any obligation to
the other hereunder, except as set forth in ▇▇▇▇▇▇▇▇ ▇, ▇, ▇ ▇▇▇ ▇ ▇▇▇▇▇▇.
(▇) If any of the conditions specified in Section 7A shall not have been
fulfilled when and as required by this Agreement, unless waived in writing, or
by the Closing Date, this Agreement and all of the Agent's obligations hereunder
may be canceled by the Agent by notifying the Holding Company and the Bank of
such cancellation in writing or by telegram at any time at or prior to the
Closing Date, and any such cancellation shall be without liability of any party
to any other party except as otherwise provided in Sections 2, 6, 8 and 9
hereof.
(c) If the Agent elects to terminate this Agreement as provided in this
Section, the Holding Company and the Bank shall be notified promptly by
telephone or telegram, confirmed by letter.
31
(d) The Holding Company and the Bank may terminate this Agreement in the
event the Agent is in material breach of the representations and warranties or
covenants contained in Section 5 and such breach has not been cured in a timely
fashion after the Holding Company and the Bank have provided the Agent with
notice of such breach. The Agent may terminate this Agreement in the event the
Holding Company or the Bank, or either of them, is in material breach of the
representations and warranties and covenants in Sections 4 and 5A and such
breach has not been cured in a timely fashion after the Agent has provided the
Holding Company or the Bank with notice of such breach.
(e) This Agreement may also be terminated by mutual written consent of the
parties hereto.
SECTION 12. NOTICES. All communications hereunder, except as herein
otherwise specifically provided, shall be mailed in writing and if sent to the
Agent shall be mailed, delivered or telegraphed and confirmed to ▇▇▇▇▇, ▇▇▇▇▇▇▇▇
& ▇▇▇▇▇ Inc., ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, Attention: ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇, III (with a copy to Squire, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ L.L.P., ▇▇▇▇ ▇▇▇ ▇▇▇▇▇,
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, Attention: M. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Esq.)
and, if sent to the Holding Company and the Bank, shall be mailed, delivered or
telegraphed and confirmed to the Holding Company and the Bank at ▇ ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, President and Chief
Executive Officer (with a copy to ▇▇▇▇▇ ▇▇▇▇▇▇▇ Alexander & Capehart, LLP,
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ Attention: ▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇, Esq.).
SECTION 13. PARTIES. The Holding Company and the Bank shall be
entitled to act and rely on any request, notice, consent, waiver or agreement
purportedly given on behalf of the Agent when the same shall have been given by
the undersigned. The Agent shall be entitled to act and rely on any request,
notice, consent, waiver or agreement purportedly given on behalf of the Holding
Company or the Bank, when the same shall have been given by the undersigned or
any other officer of the Holding Company or the Bank. This Agreement shall inure
solely to the benefit of, and shall be binding upon, the Agent, the Holding
Company, the Bank, and their respective successors and assigns, and no other
person shall have or be construed to have any legal or equitable right, remedy
or claim under or in respect of or by virtue of this Agreement or any provision
herein contained. It is understood and agreed that this Agreement is the
exclusive agreement among the parties hereto, and supersedes any prior agreement
among the parties and may not be varied except in writing signed by all the
parties.
SECTION 14. CLOSING. The closing for the sale of the Shares shall take
place on the Closing Date at such location as mutually agreed upon by the Agent
and the Holding Company and the Bank. At the closing, the Holding Company and
the Bank shall deliver to the Agent in next day funds the commissions, fees and
expenses due and owing to the Agent as set forth in Sections 2 and 6 hereof and
the opinions and certificates
32
required hereby and other documents deemed reasonably necessary by the Agent
shall be executed and delivered to effect the sale of the Shares as contemplated
hereby and pursuant to the terms of the Prospectus.
SECTION 15. PARTIAL INVALIDITY. In the event that any term, provision
or covenant herein or the application thereof to any circumstance or situation
shall be invalid or unenforceable, in whole or in part, the remainder hereof and
the application of said term, provision or covenant to any other circumstances
or situation shall not be affected thereby, and each term, provision or covenant
herein shall be valid and enforceable to the full extent permitted by law.
SECTION 16. CONSTRUCTION. This Agreement shall be construed in
accordance with the laws of the State of Indiana without giving effect to
principals of conflicts of laws.
SECTION 17. COUNTERPARTS. This Agreement may be executed in separate
counterparts, each of which so executed and delivered shall be an original, but
all of which together shall constitute but one and the same instrument.
If the foregoing correctly sets forth the arrangement among the Holding Company,
the Bank and the Agent, please indicate acceptance thereof in the space provided
below for that purpose, whereupon this letter and the Agent's acceptance shall
constitute a binding agreement.
SECTION 18. ENTIRE AGREEMENT. This Agreement, including schedules and
exhibits hereto, which are integral parts hereof and incorporated as though set
forth in full, constitutes the entire agreement between the parties pertaining
to the subject matter hereof superseding any and all prior or contemporaneous
oral or prior written agreements, proposals, letters of intent and
understandings, and cannot be modified, changed, waived or terminated except by
a writing which expressly states that it is an amendment, modification or
waiver, refers to this Agreement and is signed by the party to be charged. No
course of conduct or dealing shall be construed to modify, amend or otherwise
affect any of the provisions hereof.
Very truly yours,
33
LAFAYETTE COMMUNITY BANCORP LAFAYETTE COMMUNITY BANK
By Its Authorized Representative: By Its Authorized Representative:
------------------------------------- -------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
President and Chief Executive Officer President and Chief Executive Officer
Accepted as of the date first above written
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, INC.
By Its Authorized Representative:
------------------------------------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ III
Senior Vice President
34
EXHIBIT A
LETTER AGREEMENT
[▇▇▇▇▇▇▇ ▇▇▇▇ & COMPANY LETTERHEAD]
December 16, 1999
▇▇. ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
President
Lafayette Community Bancorp
▇▇▇▇ ▇. ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Dear ▇▇. ▇▇▇▇▇▇▇▇▇:
We understand that it is the intention of Lafayette Community Bancorp (the
"Company"), to conduct an offering to sell Common Stock in an amount anticipated
to be a minimum of $8,000,000 and a maximum of $12,000,000 in connection with
the formation of a de novo bank. Of this amount, we understand that insiders
intend to purchase approximately $2,000,000 and the remaining amount will be
sold in a direct community offering (the "Direct Community Offering"). Shares
may also be sold in the Community Offering by a syndicate of broker-dealers (the
"Syndicated Offering") and if necessary to institutional investors in an
Institutional Offering (the "Institutional Offering" and together with the
Direct Community Offering, and the Syndicated Offering, the "Offering"). This
proposal relates solely to the Direct Community Offering.
This letter hereby confirms the interest of ▇▇▇▇▇▇▇ ▇▇▇▇ & Company ("▇▇▇▇"), A
Division of ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇, Inc., and its parent company ▇▇▇▇▇,
▇▇▇▇▇▇▇▇ and ▇▇▇▇▇, Inc. ("KBW") (for purposes of this letter, ▇▇▇▇ and KBW are
collectively referred to herein as the "Underwriter") in acting as the Company's
exclusive underwriter/stock marketing agent in connection with the Direct
Community Offering. For purposes of this letter, it is understood that employees
of ▇▇▇▇/KBW will be actively involved in the Offering and that references to the
Underwriter shall include employees of ▇▇▇▇ and KBW. This letter sets forth
selected terms of our engagement.
35
1. Offering Services. The Underwriter will act as lead manager in the
Direct Community Offering to be conducted on a best efforts basis. The Direct
Community Offering will be conducted through a direct solicitation of persons
located in North Central Indiana. If necessitated by market and other
conditions, the Underwriter may form a syndicate of selected broker-dealers to
assist in the offering of the Common Stock. The decision to utilize selected
broker-dealers will be made by the Company upon consultation with the
Underwriter.
As the Company's underwriter/stock marketing agent, the Underwriter will provide
the Company with a comprehensive program of services designed to promote an
orderly, efficient and cost-effective distribution. The Underwriter will provide
financial and logistical advice to the Company concerning the Offering and
related issues.
The Underwriter further agrees to provide at no charge to the Company financial
advisory assistance for a period of one year following completion of the
Offering, including general advice on the market for bank stocks and the stock
of the Company, shareholder enhancement methods and other related matters.
Following this initial one-year term, if both parties wish to continue the
relationship, a fee will be negotiated and an agreement entered into at that
time.
2. Preparation of Offering Documents. The Company and its counsel will
draft the Registration Statement and other materials to be used in connection
with the Offering. The Underwriter will attend meetings to review these
documents and assist your counsel with their preparation. The Registration
Statement will be in a form reasonably satisfactory to each of us and our
counsel.
3. Due Diligence Review. Prior to the filing of the Registration Statement
or any other documents naming the Underwriter as the Company's underwriter/stock
marketing agent, the Underwriter and its representatives will undertake
substantial investigations to learn about the Company's proposed business and
operations ("due diligence review") in order to confirm information provided to
us and to evaluate information to be contained in the Company's Registration
Statement. The Company agrees that it will make available to the Underwriter all
relevant information, whether or not publicly available, which the Underwriter
reasonably requests, and will permit the Underwriter to discuss personnel and
the operations and prospects of the Company with management. The Underwriter
will treat all material non-public information as confidential. The Company
acknowledges that the Underwriter will rely upon the accuracy and completeness
of all information received from the Company, its officers, directors,
employees, agents and representatives, accountants and counsel.
36
The Underwriter shall furnish, as soon as practicable, to the Company such
information regarding the Underwriter as the Company may reasonably request in
writing and as shall be reasonably required in connection with any registration,
qualification or compliance with state and federal securities laws.
4. Regulatory Filings. Upon satisfactory completion of the Underwriter's
due diligence review, the Company will cause a Registration Statement with
respect to the Offering to be filed with the Securities and Exchange Commission
("SEC") and such state securities commissioners as may be determined by the
Company. No filings naming the Underwriter will be made without the prior
consent of the Underwriter, which consent shall not be unreasonably withheld.
5. Agency or Underwriting Agreement. The specific terms of the Offering
and any broker-assisted sales services contemplated in this letter shall be set
forth in any Agency or Underwriting Agreement between the Underwriter and the
Company to be executed prior to commencement of the Offering. Sales of Common
Stock in the Offering will be contingent upon, among other things, the absence
of material adverse developments and the completion of the Offering. The Agency
or Underwriting Agreement and any Selected Dealer Agreement shall be prepared by
counsel for the Underwriter. The Company, its officers and directors will agree
not to offer, sell, contract to sell or grant any option to purchase or
otherwise dispose of any Common Stock for at least 180 days after the public
offering without first obtaining the Underwriter's written consent, other than
pursuant to the Omnibus Stock Option, Ownership and Long Term Incentive Plan.
6. Representations, Warranties and Covenants. The Underwriting Agreement
will provide for customary representations, warranties and covenants by the
Company, including, without limitation, with respect to indemnification and
contribution by the Company. This will be consistent with the indemnification
set forth in paragraph 9 herein.
7. Fees. For the services hereunder, the Company shall pay the following
fees to the Underwriter at closing unless stated otherwise:
(a) For advising the Company in connection with the Offering an
initial advisory fee of $10,000 payable upon execution of this letter
agreement. Such fee shall be applied against the fees paid pursuant to
paragraph 7(b).
(b) (i) 0% of the aggregate Actual Purchase Price of the stock
sold to officers, directors and employees of the Bank;
37
(ii) 4.0% of the aggregate Actual Purchase Price of the stock
sold to investors who are included on the lists provided by
the directors in conjunction with the Direct Community
Offering, if their purchases are made directly through ▇▇▇▇;
and
(iii) 7.0% of the aggregate Actual Purchase Price of the stock
sold to investors, who were not included on the lists provided
by the directors, in conjunction with the Direct Community
Offering; and
(iv) In the event that a syndicate of selected broker-dealers
are used to assist in the Community Offering, the fee for such
shares shall be 7.0% of the aggregate Actual Purchase Price of
the securities sold through such syndicate. The Underwriter
will pass onto such selected broker-dealers who assist in the
Community Offering an amount competitive with gross
underwriting discounts charged at such time for comparable
amounts of stock sold at a comparable price per share in a
similar market environment. Fees with respect to purchases
effected through selected broker-dealers other than the
Underwriter shall be transmitted by the Underwriter to such
selected broker-dealer. The decision to utilize selected
broker-dealers will be made by the Company upon consultation
with the Underwriter with due regards to the Company's stock
distribution strategy.
(v) In the event that the Company utilizes a syndicate of
selected broker-dealers to sell Shares to institutional
investors in the Institutional Offering, which may include
KBW, the fee for such shares shall be 7.0% of the aggregate
Actual Purchase Price of the securities sold through such
syndicate. The Underwriter will pass onto such selected
broker-dealers who assist in the Institutional Offering an
amount competitive with gross underwriting discounts charged
at such time for comparable amounts of stock sold at a
comparable price per share in a similar market environment.
Fees with respect to purchases effected through selected
institutional broker-dealers other than the Underwriter shall
be transmitted by the Underwriter to such selected
broker-dealer. The decision to utilize selected broker-dealers
to offer and sell shares to institutional investors will be
made by the Company upon consultation with the Underwriter
with the Underwriter with due regards to the Company's stock
distribution strategy.
8. Expenses. The Company will bear those expenses of the proposed offering
customarily borne by issuers, including, without limitation, SEC, "Blue Sky" and
NASD filing and registration fees; the fees of the Company's accountants,
attorneys, transfer agent and registrar, printing, mailing and marketing
expenses associated with the Offering; the expenses of any "road shows" and
community meetings conducted in connection with the Offering; the fees and
expenses relating to the offering and sale of shares to the officers,
38
directors and employees of the Bank and to the private investors; the fees set
forth in Section 7; and fees for "Blue Sky" legal work. The Company shall
reimburse the Underwriter for its actual out-of-pocket expenses up to a maximum
of $7,000. The Underwriter shall pay the fees and expenses of its legal counsel.
9. Indemnification.
(a) In connection with the Underwriter's engagement (which
engagement may have commenced prior to the date hereof), the Company
agrees to indemnify and hold harmless the Underwriter and its
affiliates and the respective directors, officers, employees, agents
and partners of the Underwriter and its affiliates, and each other
person controlling the Underwriter or any of its affiliates within the
meaning of either Section 15 of the Securities Act of 1933 or Section
20 of the Securities Exchange Act of 1934 (collectively, "Underwriter
Indemnified Parties") to the full extent lawful, from and against all
losses, claims, damages or liabilities resulting from any legal action,
investigation or other proceeding to which any Underwriter Indemnified
Party may become subject as a result of or arising out of this
engagement and will reimburse any Underwriter Indemnified Party for all
reasonable expenses (including reasonable counsel fees) incurred by
such Underwriter Indemnified Party in connection with investigating,
defending or settling any such matter or enforcing any rights
hereunder. Notwithstanding the foregoing, the Company shall not be
liable to an Underwriter Indemnified Party in respect of any loss,
claim, damage, liability or expense to the extent of the same is
determined, in a final judgment by a court of competent jurisdiction,
to have resulted from the gross negligence or bad faith of such
Underwriter Indemnified Party. The Company also agrees that neither the
Underwriter, nor any of its affiliates, nor officer, director, employee
or agent of the Underwriter or any of its affiliates, nor any person
controlling the Underwriter or any of its affiliates, shall have any
liability to the Company for or in connection with such engagement
except for any such liability for losses, claims, damages, liabilities
or expenses incurred by the Company that is finally judicially
determined to have resulted from the Underwriter's gross negligence or
bad faith. Notwithstanding the foregoing, the Underwriter shall not be
required to indemnify or reimburse the Company for expenses hereunder
in an amount, in the aggregate, in excess of any fees paid pursuant to
Section 7 above. The foregoing shall be in addition to any rights that
the Underwriter or any Underwriter Indemnified Party may have at common
law or otherwise.
(b) Upon receipt of notice of any claim or the commencement of any
such action with respect to which indemnity is to be sought, an
Indemnified Party shall notify the indemnifying party of such claim or
the commencement of such action. Such Indemnified Party shall have the
right to employ counsel reasonably acceptable to the Company to defend
such claim or action.
39
(c) If for any reason the foregoing indemnification is unavailable
to any Indemnified Party or insufficient to hold it harmless as
contemplated herein then the Company shall contribute to the amount
payable by the Indemnified Party as a result of such loss, claim,
damage, liability or expense in such proportion as is appropriate to
reflect not only the relative benefits received by the Company and its
affiliates, on the one hand, and the Underwriter and the Indemnified
Party, on the other hand, but also the relative fault of the Company
and its affiliates and the Underwriter or any Indemnified Party, as the
case may be, as well as any other relevant equitable considerations,
provided, however, that in no event shall the Underwriter be required
to contribute any amount in excess of any fees paid to it pursuant to
Section 7 above.
(d) The reimbursement, indemnity and contribution by the Company
or Underwriter hereunder shall be in addition to any liability which
any party may otherwise have, and shall be binding upon and accrue to
the benefit of any successors, assigns, heirs and personal
representatives of the Company, and any Indemnified Party. The
foregoing provisions relating to reimbursement, indemnification and
contribution shall survive any termination of the Underwriter's
engagement under this letter.
10. Conditions. The Underwriter's willingness and obligation to proceed
hereunder shall be subject to, among other things, satisfaction of the following
conditions in the Underwriter's opinion, which opinion shall have been formed in
good faith by the Underwriter after reasonable determination and consideration
of all relevant factors: (a) full and satisfactory disclosure of all relevant
material, financial and other information in the disclosure documents; (b) no
material adverse change in the condition or operations of the Company subsequent
to the Underwriter due diligence review; and (c) no market conditions at the
time of the Offering which in the Underwriter's opinion make the sale of the
Common Stock by the Company inadvisable and (d) the agreement between the
Company and the Underwriter as to the offering terms.
11. Benefit. No party to this letter agreement may assign its duties and
obligations hereunder without the prior written consent of the other parties.
This Agreement shall inure to the benefit of the parties hereto and their
respective successors and assigns and to the parties indemnified hereunder and
their successors and assigns, and the obligations and liabilities assumed
hereunder by the parties hereto shall be binding upon their respective
successors and assigns.
12. Termination. This Agreement may be terminated in writing by either
party hereto without any obligation other than for the payment of any fees
specifically set forth herein. If terminated, all fees paid previously will be
deemed to have been earned when paid.
40
This letter reflects the Underwriter's present intention of proceeding to work
with the Company on its proposed Offering. It does not constitute an agreement
to underwrite securities or to serve as sales or marketing agent to the Company
or the Company, or to perform any other service, nor is it an agreement to enter
into any such agreement or a representation that market conditions will support
an offering of the Company's securities. It also does not constitute a
commitment on the part of the Company or the Underwriter except as to the
payment of certain fees as set forth in Section 7, the assumption of expenses as
set forth in Section 8 and indemnification as set forth in Section 9, all of
which shall constitute the binding obligations of the parties hereto and which
shall survive the termination of this Agreement or the completion of the
services furnished hereunder and shall remain operative and in full force and
effect. You further acknowledge that any report or analysis rendered by the
Underwriter pursuant to this engagement is rendered for use solely by the
management of the Company and its agents in connection with the Offering.
Accordingly, you agree that you will not provide any such information to any
other person without our prior written consent. The Underwriter acknowledges
that in offering the Company's securities, no person will be authorized to give
any information or to make any representation not contained in the Prospectus
and related offering materials filed as part of the Registration Statement to be
declared effective in connection with the Offering. Accordingly, the Underwriter
agrees that in connection with the Offerings it will not give any unauthorized
information or make any unauthorized representation. We will be pleased to
elaborate on any of the matters discussed in this letter at your convenience.
13. In case of a dispute under this agreement, it shall be governed by the
law of the State of Ohio. any claims or disputes, arising out of this agreement,
shall be heard by a court of competent jurisdiction within the State of Ohio.
If the foregoing correctly sets forth our mutual understanding, please so
indicate by signing and returning the original copy of this letter to the
undersigned with a check in the amount of $10,000 payable to ▇▇▇▇▇▇▇ ▇▇▇▇ &
Company.
Sincerely,
▇▇▇▇▇▇▇ ▇▇▇▇ & COMPANY
A Division of ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇, Inc.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, III Date: December 20, 1999
-------------------------- ------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ III
Senior Vice President
41
Agreed to:
LAFAYETTE COMMUNITY BANCORP
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ Date: December 20, 1999
------------------------- ------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
President