Exhibit 1
OHIO LEGACY CORP
COMMON SHARES
UNDERWRITING AGREEMENT
----------------, ----
FRIEDMAN, BILLINGS, ▇▇▇▇▇▇ & CO., INC.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Dear Sirs:
Ohio Legacy Corp, an Ohio corporation (the "Company") confirms
its agreement with Friedman, Billings, ▇▇▇▇▇▇ & Co., Inc. (the "Underwriter"),
with respect to (i) the sale by the Company of _______________ common shares
(the "Initial Shares"), no par value per share, of the Company ("Common Shares")
and the purchase by the Underwriter, of _______________ Common Shares and (ii)
the grant of the option described in Section 1(b) hereof to purchase all or any
part of _______________ additional Common Shares to cover over-allotments (the
"Option Shares"), if any, from the Company to the Underwriter. The Common Shares
to be purchased by the Underwriter and all or any part of the _______________
Common Shares subject to the option described in Section l(b) hereof are
hereinafter called, collectively, the "Shares".
The Company understands that the Underwriter proposes to make
a public offering of the Shares as soon as the Underwriter deems advisable after
this Agreement has been executed and delivered.
The Company has filed with the Securities and Exchange
Commission (the Commission"), a registration statement on Form SB-2 (No.
33-________) and a related preliminary prospectus for the registration of the
Shares under the Securities Act of 1933, as amended (the "Securities Act"), and
the rules and regulations thereunder (the "Securities Act Regulations"). The
Company has prepared and filed such amendments thereto, if any, and such amended
preliminary prospectuses, if any, as may have been required to the date hereof,
and will file such additional amendments thereto and such amended prospectuses
as may hereafter be required. The registration statement has been declared
effective under the Securities Act by the Commission. The registration statement
as amended at the time it became effective (including all information deemed
(whether by incorporation by reference or otherwise) to be a part of the
registration statement at the time it became effective pursuant to Rule 430A(b)
of the Securities Act Regulations) is hereinafter called the "Registration
Statement," except that, if the Company files a post-effective amendment to such
registration statement which becomes effective prior to the Closing Time (as
defined below), "Registration Statement" shall refer to such registration
statement as so amended. Any registration statement filed pursuant to Rule
462(b) of the Securities Act Regulations is hereinafter called the "Rule
462(b) Registration Statement," and after such filing the term "Registration
Statement" shall include the 462(b) Registration Statement. Each prospectus
included in the registration statement, or amendments thereof or supplements
thereto, before it became effective under the Securities Act and any prospectus
filed with the Commission by the Company with the consent of the Underwriter
pursuant to Rule 424(a) of the Securities Act Regulations is hereinafter called
the "Preliminary Prospectus." The term "Prospectus" means the final prospectus,
as first filed with the Commission pursuant to paragraph (1) or (4) of Rule
424(b) of the Securities Act Regulations, and any amendments thereof or
supplements thereto. The Commission has not issued any order preventing or
suspending the use of any Preliminary Prospectus.
The Company and the Underwriter agree as follows:
1. Sale and Purchase:
a) Initial Shares. Upon the basis of the warranties and
representations and other terms and conditions herein set
forth, at the purchase price per share of $________, the
Company agrees to sell to the Underwriter the Initial Shares,
and the Underwriter agrees, to purchase from the Company
_______________ Initial Shares plus any additional number of
Initial Shares which the Underwriter may become obligated to
purchase pursuant to the provisions of Section 8 hereof. The
Underwriter may from time to time increase or decrease the
public offering price after the initial public offering to
such extent as the Underwriter may determine.
b) Option Shares. In addition, upon the basis of the warranties
and representations and other terms and conditions herein set
forth, at the purchase price per share set forth in paragraph
(a), the Company hereby grants an option to purchase to the
Underwriter, 150,000 Common Shares plus any additional number
of Option Shares which such Underwriter may become obligated
to purchase pursuant to the provisions of Section 8 hereof.
The option hereby granted will expire 30 days after the date
hereof and may be exercised in whole or in part from time to
time only for the purpose of covering over-allotments which
may be made in connection with the offering and distribution
of the Initial Shares upon notice by the Underwriter to the
Company setting forth the number of Option Shares as to which
the Underwriter is then exercising the option and the time and
date of payment and delivery for such Option Shares. Any such
time and date of delivery (a "Date of Delivery") shall be
determined by the Underwriter, but shall not be later than
three full business days (or earlier, without the consent of
the Company, than two full business days) after the exercise
of said option, nor in any event prior to the Closing Time, as
hereinafter defined. If the option is exercised as to all or
any portion of the Option Shares, the Company will sell the
total number of Option Shares then being purchased to the
Underwriter. The Underwriter may from time to time increase or
decrease the public offering price of the
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Option Shares after the initial public offering to such extent
as the Underwriter may determine.
2. Payment and Delivery:
a) Initial Shares and Warrants. Payment of the purchase price for
the Initial Shares shall be made to the Company by wire
transfer of immediately available funds or certified or
official bank check payable in federal (same-day) funds at the
offices of Vorys, ▇▇▇▇▇, ▇▇▇▇▇▇▇ and ▇▇▇▇▇ LLP located at ▇▇
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇ (unless another place
shall be agreed upon by the Underwriter and the Company)
against delivery of the certificates for the Initial Shares to
the Underwriter for the account of the Underwriter. Such
payment and delivery shall be made at 9:30 a.m., New York City
time, on the third (fourth, if pricing occurs after 4:30 p.m.,
New York City time) business day after the date hereof (unless
another time, not later than ten business days after such
date, shall be agreed to by the Underwriter and the Company).
The time at which such payment and delivery are actually made
is hereinafter sometimes called the "Closing Time."
Certificates for the Initial Shares shall be delivered to the
Underwriter in definitive form registered in such names and in
such denominations as the Underwriter shall specify. For the
purpose of expediting the checking of the certificates for the
Initial Shares by the Underwriter, the Company agrees to make
such certificates available to the Underwriter for such
purpose at least one full business day preceding the Closing
Time.
b) Option Shares. In addition, payment of the purchase price for
the Option Shares shall be made to the Company by wire
transfer of immediately available funds or certified or
official bank check payable in federal (same-day) funds at the
offices of Vorys, ▇▇▇▇▇, ▇▇▇▇▇▇▇ and ▇▇▇▇▇ LLP located at ▇▇
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇ (unless another place
shall be agreed upon by the Underwriter and the Company),
against delivery of the certificates for the Option Shares to
the Underwriter. Such payment and delivery shall be made at
9:30 a.m., New York City time, on each Date of Delivery
determined pursuant to Section 1(b) above. Certificates for
the Option Shares shall be delivered to the Underwriter in
definitive form registered in such names and in such
denominations as the Underwriter shall specify. For the
purpose of expediting the checking of the certificates for the
Option Shares by the Underwriter, the Company agrees to make
such certificates available to the Underwriter for such
purpose at least one full business day preceding the relevant
Date of Delivery.
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3. Representations and Warranties of the Company:
The Company represents and warrants to the Underwriter that:
a) the Company has an authorized capitalization as set forth in
the Prospectus under the caption "Capitalization;" the
outstanding shares of capital stock of the Company and Ohio
Legacy Bank (the "Bank") have been duly and validly authorized
and issued and are fully paid and non-assessable, and all of
the outstanding shares of capital stock of the Bank are
directly owned of record and beneficially by the Company;
except as disclosed in the Prospectus, there are no
outstanding (i) securities or obligations of the Company or
the Bank convertible into or exchangeable for any capital
stock of the Company or the Bank, (ii) warrants, rights or
options to subscribe for or purchase from the Company or the
Bank any such capital stock or any such convertible or
exchangeable securities or obligations, or (iii) obligations
of the Company or the Bank to issue any shares of capital
stock, any such convertible or exchangeable securities or
obligations, or any such warrants, rights or options;
b) the Company has been duly organized and incorporated and is
validly existing as a corporation in good standing under the
laws of the State of Ohio with full corporate power and
authority to own its properties and to conduct its business as
described in the Registration Statement and Prospectus, to
execute and deliver this Agreement and to consummate the
transactions contemplated hereby; the Company is registered as
a bank holding company under the Bank Holding Company Act;
c) the Bank has been duly organized and incorporated and is
validly existing as a national bank under the National Bank
Act with full power and authority to own its properties and to
conduct its business as described in the Registration
Statement and Prospectus; the deposit accounts of the Bank are
insured up to applicable limits by the Bank Insurance Fund
("BIF") administered by the Federal Deposit Insurance
Corporation;
d) the Company and the Bank are duly qualified or licensed by
each jurisdiction in which they conduct their respective
businesses and in which the failure, individually or in the
aggregate, to be so qualified or licensed could have a
material adverse effect on the assets, business, operations,
earnings, prospects, properties or condition (financial or
otherwise) of the Company and the Bank taken as a whole, and
the Company and the Bank are duly qualified, and are in good
standing, in each jurisdiction in which they own or lease real
property or maintain an office and in which such qualification
is necessary, except where the failure to be so qualified and
in good standing would not have a material adverse effect on
the assets, business, operations, earnings, prospects,
properties or condition (financial or otherwise) of the
Company and the Bank taken as a whole; except as disclosed in
the Prospectus, the Bank is not prohibited or restricted,
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directly or indirectly, from paying dividends to the Company,
or from making any other distribution with respect to the
Bank's capital stock or from repaying to the Company any
amounts which may from time to time become due under any loans
or advances to the Bank from the Company, or from transferring
the Bank's property or assets to the Company; other than as
disclosed in the Prospectus, the Company does not own,
directly or indirectly, any capital stock or other equity
securities of any other corporation or any ownership interest
in any partnership, joint venture or other association;
e) the Company and the Bank are in compliance in all material
respects with all applicable laws, rules, regulations, orders,
decrees and judgments, including those relating to
transactions with affiliates;
f) neither the Company nor the Bank is in breach of or in default
under (nor has any event occurred which with notice, lapse of
time, or both would constitute a breach of, or default under),
its respective articles of incorporation or charter or
by-laws, or in the performance or observance of any
obligation, agreement, covenant or condition contained in any
license, indenture, mortgage, deed of trust, loan or credit
agreement or other agreement or instrument to which the
Company or the Bank is a party or by which any of them or
their respective properties is bound, except for such breaches
or defaults which would not have a material adverse effect on
the assets, business, operations, earnings, prospects,
properties or condition (financial or otherwise) of the
Company and the Bank taken as a whole, and the execution,
delivery and performance of this Agreement, and consummation
of the transactions contemplated hereby will not conflict
with, or result in any breach of, or constitute a default
under (nor constitute any event which with notice, lapse of
time, or both would constitute a breach of, or default under),
(i) any provision of the articles of incorporation or charter
or bylaws of the Company or the Bank, or (ii) any provision of
any license, indenture, mortgage, deed of trust, loan or
credit agreement or other agreement or instrument to which the
Company or the Bank is a party or by which either of them or
their respective properties may be bound or affected, or under
any federal, state, local or foreign law, regulation or rule
or any decree, judgment or order applicable to the Company or
the Bank, except in the case of this clause (ii) for such
breaches or defaults which would not have a material adverse
effect on the assets, business, operations, earnings,
prospects, properties or condition (financial or otherwise) of
the Company and the Bank taken as a whole; or result in the
creation or imposition of any lien, charge, claim or
encumbrance upon any property or asset of the Company or the
Bank;
g) this Agreement has been duly authorized, executed and
delivered by the Company and is a legal, valid and binding
agreement of the Company enforceable in accordance with its
terms, except as may be limited by
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bankruptcy, insolvency, reorganization, moratorium or similar
laws affecting creditors' rights generally, and by general
principles of equity, and except to the extent that the
indemnification and contribution provisions of Section 9
hereof may be limited by federal or state securities laws and
public policy considerations in respect thereof;
h) no approval, authorization, consent or order of or filing with
any federal, state or local governmental or regulatory
commission, board, body, authority or agency is required in
connection with the Company's execution, delivery and
performance of this Agreement, its consummation of the
transaction contemplated hereby, and its sale and delivery of
the Shares, other than (i) such as have been obtained, or will
have been obtained at the Closing Time or the relevant Date of
Delivery, as the case may be, under the Securities Act, (ii)
such approvals as have been obtained in connection with the
approval of the quotation of the Shares on the Nasdaq SmallCap
Market and (iii) any necessary qualification under the
securities or blue sky laws of the various jurisdictions in
which the Shares are being offered by the Underwriter;
i) each of the Company and the Bank has all necessary licenses,
authorizations, consents and approvals and has made all
necessary filings required under any federal, state or local
law, regulation or rule, and has obtained all necessary
authorizations, consents and approvals from other persons,
required in order to conduct their respective businesses as
described in the Prospectus, except to the extent that any
failure to have any such licenses, authorizations, consents or
approvals, to make any such filings or to obtain any such
authorizations, consents or approvals would not, individually
or in the aggregate, have a material adverse effect on the
assets, business, operations, earnings, prospects, properties
or condition (financial or otherwise) of the Company and the
Bank taken as a whole; neither the Company nor the Bank is
required by any applicable law to obtain accreditation or
certification from any governmental agency or authority in
order to provide the products and services which it currently
provides or which it proposes to provide as set forth in the
Prospectus; neither the Company nor the Bank is in violation
of, in default under, or has received any notice regarding a
possible violation, default or revocation of any such license,
authorization, consent or approval or any federal, state,
local or foreign law, regulation or rule or any decree, order
or judgment applicable to the Company or the Bank the effect
of which could be material and adverse to the assets,
business, operations, earnings, prospects, properties or
condition (financial or otherwise) of the Company and the Bank
taken as a whole; and no such license, authorization, consent
or approval contains a materially burdensome restriction that
is not adequately disclosed in the Registration Statement and
the Prospectus;
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j) each of the Registration Statement and any Rule 462(b)
Registration Statement has become effective under the
Securities Act and no stop order suspending the effectiveness
of the Registration Statement or any Rule 462(b) Registration
Statement has been issued under the Securities Act and no
proceedings for that purpose have been instituted or are
pending or, to the knowledge of the Company, are threatened by
the Commission, and any request on the part of the Commission
for additional information has been complied with;
k) the Preliminary Prospectus and the Registration Statement
comply and the Prospectus and any further amendments or
supplements thereto will, when they have become effective or
are filed with the Commission, as the case may be, comply in
all material respects with the requirements of the Securities
Act and the Securities Act Regulations; the Registration
Statement did not, and any amendment thereto will not, in each
case as of the applicable effective date, 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 the light of the circumstances under
which they were made, not misleading; and the Preliminary
Prospectus does not, and the Prospectus or any amendment or
supplement thereto will not, as of the applicable filing date
and at the Closing Time and on each Date of Delivery (if any),
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 the light of the
circumstances under which they were made, not misleading;
provided, however, that the Company makes no warranty or
representation with respect to any statement contained in the
Registration Statement or the Prospectus in reliance upon and
in conformity with the information concerning the Underwriter
and furnished in writing by the Underwriter to the Company
expressly for use in the Registration Statement or the
Prospectus (that information being limited to that described
in the last sentence of the first paragraph of Section 9(b)
hereof);
l) the Preliminary Prospectus was and the Prospectus delivered to
the Underwriter for use in connection with this offering will
be identical to the versions of the Preliminary Prospectus and
Prospectus created to be transmitted to the Commission for
filing via the Electronic Data Gathering Analysis and
Retrieval System ("▇▇▇▇▇"), except to the extent permitted by
Regulation S-T;
m) all legal or governmental proceedings, contracts or documents
of a character required to be filed as exhibits to the
Registration Statement or to be summarized or described in the
Prospectus have been so filed, summarized or described as
required;
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n) there are no actions, suits, proceedings, inquiries or
investigations pending or, to the knowledge of the Company,
threatened against the Company or the Bank or any of their
respective officers and directors or to which the properties,
assets or rights of any such entity are subject, at law or in
equity, before or by any federal, state, local or foreign
governmental or regulatory commission, board, body, authority,
arbitral panel or agency which could result in a judgment,
decree, award or order having a material adverse effect on the
assets, business, operations, earnings, prospects, properties
or condition (financial or otherwise) of the Company and the
Bank taken as a whole;
o) the financial statements, including the notes thereto,
included in the Registration Statement and the Prospectus
present fairly the consolidated financial position of the
entities to which such financial statements relate (the
"Covered Entities") as of the dates indicated and the
consolidated results of operations and changes in financial
position and cash flows of the Covered Entities for the
periods specified; such financial statements have been
prepared in conformity with generally accepted accounting
principles applied on a consistent basis during the periods
involved and in accordance with Regulation S-X promulgated by
the Commission; the financial statement schedules included in
the Registration Statement and the amounts in the Prospectus
under the captions ["Prospectus Summary - Summary Financial
Information" and "Selected Financial Information"] fairly
present the information shown therein and have been compiled
on a basis consistent with the financial statements included
in the Registration Statement and the Prospectus; the
unaudited pro forma financial information (including the
related notes) included in the Prospectus or any Preliminary
Prospectus complies as to form in all material respects to the
applicable accounting requirements of the Securities Act and
the Securities Act Regulations, and management of the Company
believes that the assumptions underlying the pro forma
adjustments are reasonable; such pro forma adjustments have
been properly applied to the historical amounts in the
compilation of the information and such information fairly
presents with respect to the Company and the Bank, the
financial position, results of operations and other
information purported to be shown therein at the respective
dates and for the respective periods specified;
p) ▇▇▇▇▇, ▇▇▇▇▇▇ and Company LLP ("▇▇▇▇▇ ▇▇▇▇▇▇"), whose reports
on the consolidated financial statements of the Company and
the Bank are filed with the Commission as part of the
Registration Statement and Prospectus, are and were during the
periods covered by their reports independent public
accountants as required by the Securities Act and the
Securities Act Regulations;
q) subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus, and
except as may be
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otherwise stated in the Registration Statement or Prospectus,
there has not been (i) any material adverse change in the
assets, business, operations, earnings, prospects, properties
or condition (financial or otherwise), present or prospective,
of the Company and the Bank taken as a whole, whether or not
arising in the ordinary course of business, (ii) any
transaction, which is material to the Company and the Bank
taken as a whole, contemplated or entered into by the Company
or the Bank, (iii) any obligation, contingent or otherwise,
directly or indirectly incurred by the Company or the Bank,
which is material to the Company and the Bank taken as a whole
or (iv) any dividend or distribution of any kind declared,
paid or made by the Company on any class of its capital stock;
r) the Shares conform in all material respects to the description
thereof contained in the Registration Statement and the
Prospectus;
s) there are no persons with registration or other similar rights
to have any equity securities, including securities which are
convertible into or exchangeable for equity securities,
registered pursuant to the Registration Statement or otherwise
registered by the Company under the Securities Act, except for
those registration or similar rights which have been waived
with respect to the offering contemplated by this Agreement,
all of which registration or similar rights are fairly
summarized in the Prospectus;
t) the Shares have been duly authorized and, when issued and duly
delivered against payment therefor as contemplated by this
Agreement, will be validly issued, fully paid and
nonassessable, free and clear of any pledge, lien,
encumbrance, security interest or other claim, and the
issuance and sale of the Shares by the Company is not subject
to preemptive or other similar rights arising by operation of
law, under the articles of incorporation or by-laws of the
Company, or under any agreement to which the Company or the
Bank is a party or otherwise;
u) the Company has not taken, and will not take, directly or
indirectly, any action which is designed to or which has
constituted or which might reasonably be expected to cause or
result in stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of
the Shares;
v) neither the Company nor any of its affiliates (i) is required
to register as a "broker" or "dealer" in accordance with the
provisions of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), or the rules and regulations thereunder,
or (ii) directly, or indirectly through one or more
intermediaries, controls or has any other association with
(within the meaning of Article I of the By-laws of the
National Association of Securities Dealers, Inc. (the "NASD"))
any member firm of the NASD;
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w) the Company has not relied upon the Underwriter or legal
counsel for the Underwriter for any legal, tax or accounting
advice in connection with the offering and sale of the Shares;
x) any certificate signed by any officer of the Company or the
Bank delivered to the Underwriter or to counsel for the
Underwriter pursuant to or in connection with this Agreement
shall be deemed a representation and warranty by the Company
to each Underwriter as to the matters covered thereby;
y) the form of certificate used to evidence the Common Shares
complies in all material respects with all applicable
statutory requirements, with any applicable requirements of
the articles of incorporation and by-laws of the Company and
the requirements of the Nasdaq SmallCap Market;
z) the Company and the Bank have good and marketable title in fee
simple to all real property, if any, and good title to all
personal property owned by them, in each case free and clear
of all liens, security interests, pledges, charges,
encumbrances, mortgages and defects, except such as are
disclosed in the Prospectus or such as do not materially and
adversely affect the value of such property and do not
interfere with the use made or proposed to be made of such
property by the Company and the Bank; and any real property
and buildings held under lease by the Company or the Bank are
held under valid, existing and enforceable leases, with such
exceptions as are disclosed in the Prospectus or are not
material and do not interfere with the use made or proposed to
be made of such property and buildings by the Company or the
Bank;
aa) the descriptions in the Registration Statement and the
Prospectus of the contracts, leases and other legal documents
therein described present fairly the information required to
be shown, and there are no contracts, leases, or other
documents of a character required to be described in the
Registration Statement or the Prospectus or to be filed as
exhibits to the Registration Statement which are not described
or filed as required;
bb) the Company and the Bank own or possess adequate license or
other rights to use all patents, trademarks, service marks,
trade names, copyrights, software and design licenses, trade
secrets, manufacturing processes, other intangible property
rights and know-how (collectively "Intangibles") necessary to
entitle the Company and the Bank to conduct their business as
described in the Prospectus, and neither the Company, nor the
Bank, has received notice of infringement of or conflict with
(and the Company knows of no such infringement of or conflict
with) asserted rights of others with respect to any
Intangibles which could materially and adversely affect the
business, prospects, properties, assets, results of
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operations or condition (financial or otherwise) of the
Company or the Bank;
cc) the Company and the Bank maintain a system of internal
accounting controls sufficient to provide reasonable assurance
that (i) transactions are executed in accordance with
management's general or specific authorizations; (ii)
transactions are recorded as necessary to permit preparation
of financial statements in conformity with generally accepted
accounting principles and to maintain asset accountability;
(iii) access to assets is permitted only in accordance with
management's general or specific authorization; and (iv) the
recorded accountability for assets is compared with the
existing assets at reasonable intervals and appropriate action
is taken with respect to any differences;
dd) each of the Company and the Bank has filed on a timely basis
all necessary federal, state, local and foreign income and
franchise tax returns required to be filed through the date
hereof and have paid all taxes shown as due thereon; and no
tax deficiency has been asserted against any such entity, nor
does any such entity know of any tax deficiency which is
likely to be asserted against any such entity which if
determined adversely to such entity, could materially
adversely affect the business, prospects, properties, assets,
results of operations or condition (financial or otherwise) of
any such entity, respectively; all tax liabilities are
adequately provided for on the respective books of such
entities; ee) the Company has timely filed all reports,
prospectuses, offering circulars, proxy statements,
registration statements and all similar documents required to
be filed pursuant to the Securities Act of 1933, as amended,
and the Securities Act of 1934, as amended, and regulations
issued pursuant thereto ("Securities Documents"). The
Securities Documents did not, as of the dates on which such
reports were filed with the SEC, contain any untrue statement
of a material fact or omit any material fact required to be
stated therein or necessary to make the statements contained
therein, in light of the circumstances under which they were
made, not misleading;
ff) each of the Company and the Bank maintain insurance (issued by
insurers of recognized financial responsibility) of the types
and in the amounts generally deemed adequate for their
respective businesses and consistent with insurance coverage
maintained by similar companies in similar businesses,
including, but not limited to, insurance covering real and
personal property owned or leased by the Company and the Bank
against theft, damage, destruction, acts of vandalism and all
other risks customarily insured against, all of which
insurance is in full force and effect;
gg) neither the Company nor the Bank has violated, or received
notice of any violation with respect to, any applicable
environmental, safety or similar
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law applicable to the business of the Company or the Bank, nor
any federal or state law relating to discrimination in the
hiring, promotion or pay of employees, nor any applicable
federal or state wages and hours law, nor any provisions of
the Employee Retirement Income Security Act or the rules and
regulations promulgated thereunder, nor any state law
precluding the denial of credit due to the neighborhood in
which a property is situated, the violation of any of which
could have a material adverse effect on the business,
operations, earnings, prospects, properties or condition
(financial or otherwise) of the Company and the Bank, taken as
a whole;
hh) neither the Company nor the Bank nor any officer or director
purporting to act on behalf of the Company or the Bank has at
any time; (i) made any contributions to any candidate for
political office, or failed to disclose fully any such
contributions, in violation of law, (ii) made any payment to
any state, federal or foreign governmental officer or
official, or other person charged with similar public or
quasi-public duties, other than payments required or allowed
by applicable law, (iii) made any payment outside the ordinary
course of business to any investment officer or loan broker or
person charged with similar duties of any entity to which the
Company or the Bank sells or from which the Company or the
Bank buys loans or servicing arrangements for the purpose of
influencing such agent, officer, broker or person to buy loans
or servicing arrangements from or sell loans to the Company or
the Bank, or (iv) engaged in any transactions, maintained any
bank account or used any corporate funds except for
transactions, bank accounts and funds which have been and are
reflected in the normally maintained books and records of the
Company and the Bank;
ii) except as otherwise disclosed in the Prospectus, there are no
material outstanding loans or advances or material guarantees
of indebtedness by the Company or the Bank to or for the
benefit of any of the officers or directors of the Company or
the Bank or any of the members of the families of any of them;
jj) neither the Company nor the Bank nor, to the knowledge of the
Company, any employee or agent of the Company or the Bank, has
made any payment of funds of the Company or of the Bank or
received or retained any funds in violation of any law, rule
or regulation or of a character required to be disclosed in
the Prospectus;
kk) all securities issued by the Company, the Bank or any trusts
established by the Company or the Bank, have been issued and
sold in compliance with (i) all applicable federal and state
securities laws, (ii) the laws of the applicable jurisdiction
of incorporation of the issuing entity and, (iii) to the
-12-
extent applicable to the issuing entity, the requirements of
the Nasdaq SmallCap Market;
ll) in connection with this offering, the Company has not offered
and will not offer its Common Shares or any other securities
convertible into or exchangeable or exercisable for Common
Shares in a manner in violation of the Securities Act. The
Company has not distributed and will not distribute any
Prospectus or other offering material in connection with the
offer and sale of the Shares;
mm) the Company has not incurred any liability for any finder's
fees or similar payments in connection with the transactions
herein contemplated;
nn) no relationship, direct or indirect, exists between or among
the Company or the Bank on the one hand, and the directors,
officers, stockholders, customers or suppliers of the Company
or the Bank on the other hand, which is required by the
Securities Act and the Securities Act Regulations to be
described in the Registration Statement and the Prospectus and
which is not so described;
oo) neither the Company nor the Bank is and, after giving effect
to the offering and sale of the Shares, will be an "investment
company" or an entity "controlled" by an "investment company",
as such terms are defined in the Investment Company Act of
1940, as amended (the "Investment Company Act"); and
pp) there are no existing or, to the knowledge of the Company,
threatened labor disputes with the employees of the Company or
the Bank which are likely to have individually or in the
aggregate a material adverse effect on assets, business,
operations, earnings, prospects, properties or condition
(financial or otherwise) of the Company and the Bank taken as
a whole.
4. Certain Covenants:
The Company hereby agrees with the Underwriter:
a) to furnish such information as may be required and otherwise
to cooperate in qualifying the Shares for offering and sale
under the securities or blue sky laws of such states as the
Underwriter may designate and to maintain such qualifications
in effect as long as required for the distribution of the
Shares, provided that the Company shall not be required to
qualify as a foreign corporation or to consent to the service
of process under the laws of any such state (except service of
process with respect to the offering and sale of the Shares);
-13-
b) to prepare the Prospectus in a form approved by the
Underwriter and file such Prospectus with the Commission
pursuant to Rule 424(b) not later than 10:00 a.m. (New York
City time), on the day following the execution and delivery of
this Agreement and to furnish promptly (and with respect to
the initial delivery of such Prospectus, not later than 10:00
a.m. (New York City time) on the day following the execution
and delivery of this Agreement) to the Underwriter as many
copies of the Prospectus (or of the Prospectus as amended or
supplemented if the Company shall have made any amendments or
supplements thereto after the effective date of the
Registration Statement) as the Underwriter may reasonably
request for the purposes contemplated by the Securities Act
Regulations, which Prospectus and any amendments or
supplements thereto furnished to the Underwriter will be
identical to the version created to be transmitted to the
Commission for filing via ▇▇▇▇▇, except to the extent
permitted by Regulation S-T;
c) to advise the Underwriter promptly and (if requested by the
Underwriter) to confirm such advice in writing, when the
Registration Statement has become effective and when any
post-effective amendment thereto becomes effective under the
Securities Act Regulations;
d) to advise the Underwriter immediately, confirming such advice
in writing, of (i) the receipt of any comments from, or any
request by, the Commission for amendments or supplements to
the Registration Statement or Prospectus or for additional
information with respect thereto, or (ii) the issuance by the
Commission of any stop order suspending the effectiveness of
the Registration Statement or of any order preventing or
suspending the use of any Preliminary Prospectus or the
Prospectus, or of the suspension of the qualification of the
Shares for offering or sale in any jurisdiction, or of the
initiation or threatening of any proceedings for any of such
purposes and, if the Commission or any other government agency
or authority should issue any such order, to make every
reasonable effort to obtain the lifting or removal of such
order as soon as possible; to advise the Underwriter promptly
of any proposal to amend or supplement the Registration
Statement or Prospectus and to file no such amendment or
supplement to which the Underwriter shall reasonably object in
writing;
e) to furnish to the Underwriter for a period of five years from
the date of this Agreement (i) as soon as available, copies of
all annual, quarterly and current reports or other
communications supplied to holders of Common Shares, (ii) as
soon as practicable after the filing thereof, copies of all
reports filed by the Company with the Commission, the NASD,
The Nasdaq Stock Market, or any securities exchange and (iii)
such other information as the Underwriter may reasonably
request regarding the Company and the Bank;
-14-
f) to advise the Underwriter promptly of the happening of any
event known to the Company within the time during which a
Prospectus relating to the Shares is required to be delivered
under the Securities Act Regulations which, in the judgment of
the Company, would require the making of any change in the
Prospectus then being used so that the Prospectus would not
include an untrue statement of a material fact or omit to
state a material fact required to be stated therein or
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, and,
during such time, to prepare and furnish, at the Company's
expense, to the Underwriter promptly such amendments or
supplements to such Prospectus as may be necessary to reflect
any such change and to furnish to the Underwriter a copy of
such proposed amendment or supplement before filing any such
amendment or supplement with the Commission;
g) to furnish promptly to the Underwriter a signed copy of the
Registration Statement, as initially filed with the
Commission, and of all amendments or supplements thereto
(including all exhibits filed therewith or incorporated by
reference therein) and such number of conformed copies of the
foregoing as the Underwriter may reasonably request;
h) to furnish to each Underwriter, not less than two business
days before filing with the Commission subsequent to the
effective date of the Prospectus and during the period
referred to in paragraph (f) above, a copy of any document
proposed to be filed with the Commission pursuant to Section
13, 14, or 15(d) of the Exchange Act;
i) to apply the net proceeds of the sale of the Shares in
accordance with its statements under the caption "Use of
Proceeds" in the Prospectus;
j) to make generally available to its security holders as soon as
practicable, but in any event not later than the end of the
fiscal quarter first occurring after the first anniversary of
the effective date of the Registration Statement, an earnings
statement complying with the provisions of Section 11(a) of
the Securities Act (in form, at the option of the Company,
complying with the provisions of Rule 158 of the Securities
Act Regulations,) covering a period of 12 months beginning
after the effective date of the Registration Statement;
k) to use its best efforts to effect and maintain the quotation
of the Shares on the Nasdaq SmallCap Market and to file with
Nasdaq all documents and notices required by Nasdaq of
companies that have securities that are traded in the
over-the-counter market and quotations for which are reported
by Nasdaq;
-15-
l) to engage and maintain, at its expense, a registrar and
transfer agent for the Shares;
m) to refrain during a period of 360 days from the date of the
Prospectus, without the prior written consent of the
Underwriter, from (i) offering, pledging, selling, contracting
to sell, selling any option or contract to purchase,
purchasing any option or contract to sell, granting any option
for the sale of, or otherwise disposing of or transferring,
directly or indirectly, any Common Shares or any securities
convertible into or exercisable or exchangeable for Common
Shares, or filing any registration statement under the
Securities Act with respect to any of the foregoing, or (ii)
entering into any swap or any other agreement or any
transaction that transfers, in whole or in part, directly or
indirectly, the economic consequence of ownership of the
Common Shares, whether any such swap or transaction described
in clause (i) or (ii) above is to be settled by delivery of
Common Shares or such other securities, in cash or otherwise.
The foregoing sentence shall not apply to (A) the Shares to be
sold hereunder, or (B) any Common Shares issued by the Company
upon the exercise of an option outstanding on the date hereof
and referred to in the Prospectus;
n) to refrain from and to use its best efforts to cause its
officers, directors and affiliates to refrain from, (i)
taking, directly or indirectly prior to termination of the
transactions contemplated by this Agreement, any action
designed to stabilize or manipulate the price of any security
of the Company, or which may cause or result in, or which
might in the future reasonably be expected to cause or result
in, the stabilization or manipulation of the price of any
security of the Company, to facilitate the sale or resale of
any of the Shares, (ii) selling, bidding for, purchasing or
paying anyone any compensation for soliciting purchases of the
Shares or (iii) paying or agreeing to pay to any person any
compensation for soliciting any order to purchase any other
securities of the Company;
o) that the provisions of the Engagement Letter by and between
the Company and the Underwriter, dated October ___, 2002,
shall survive the execution and delivery of this Agreement and
the consummation of the transactions contemplated hereby; and
p) if at any time during the 30-day period after the Registration
Statement becomes effective, any rumor, publication or event
relating to or affecting the Company shall occur as a result
of which in the reasonable opinion of the Underwriter the
market price of the Common Shares has been or is likely to be
materially affected (regardless of whether such rumor,
publication or event necessitates a supplement to or amendment
of the Prospectus) and after written notice from the
Underwriter advising the Company to the effect set forth
above, to forthwith prepare, consult with
-16-
the Underwriter concerning the substance of, and disseminate a
press release or other public statement, reasonably
satisfactory to the Underwriter, responding to or commenting
on such rumor, publication or event.
5. Payment of Expenses:
a) The Company agrees to pay all costs and expenses incident to
the performance of its obligations under this Agreement,
whether or not the transactions contemplated hereunder are
consummated or this Agreement is terminated, including
expenses, fees and taxes in connection with (i) the
preparation and filing of the Registration Statement, each
Preliminary Prospectus, the Prospectus, and any amendments or
supplements thereto, and the printing and furnishing of copies
of each thereof to the Underwriter and to dealers (including
costs of mailing and shipment), (ii) the preparation, issuance
and delivery of the certificates for the Shares to the
Underwriter, including any stock or other transfer taxes or
duties payable upon the sale of the Shares to the Underwriter,
(iii) the printing of this Agreement and any dealer agreements
and furnishing of copies of each to the Underwriter and to
dealers (including costs of mailing and shipment), (iv) the
qualification of the Shares for offering and sale under state
laws that the Company and the Underwriter have mutually agreed
are appropriate and the determination of their eligibility for
investment under state law as aforesaid (including the legal
fees and filing fees and other disbursements of counsel for
the Underwriter and the printing and furnishing of copies of
any blue sky surveys or legal investment surveys to the
Underwriter and to dealers, (v) filing for review of the
public offering of the Shares by the NASD (including the legal
fees and filing fees and other disbursements of counsel for
the Underwriter relating thereto), (vi) the fees and expenses
of any transfer agent or registrar for the Shares and
miscellaneous expenses referred to in the Registration
Statement, (vii) the fees and expenses incurred in connection
with the inclusion of the Shares in the Nasdaq SmallCap
Market, (viii) making road show presentations with respect to
the offering of the Shares, (ix) preparing and distributing
bound volumes of transaction documents for the Underwriter and
its legal counsel and (x) the performance of the Company's
other obligations hereunder. Upon the request of the
Underwriter, the Company will provide funds in advance for
filing fees.
b) The Company agrees to reimburse the Underwriter for its
reasonable out-of-pocket expenses in connection with the
performance of its activities under this Agreement, including,
but not limited to, costs such as printing, facsimile, courier
service, direct computer expenses, accommodations and travel,
Underwriter's outside legal counsel and any other advisors,
accountants, appraisers, etc.
-17-
6. Conditions of the Underwriter's Obligations: The obligations of the
Underwriter to purchase Shares at the Closing Time or on the Date of Delivery,
as applicable, are subject to the accuracy of the representations and warranties
on the part of the Company in all material respects on the date hereof and at
the Closing Time and on each Date of Delivery, as applicable, the performance by
the Company of its obligations hereunder in all material respects and to the
satisfaction of the following further conditions at the Closing Time or on the
Date of Delivery, as applicable:
a) The Company shall furnish to the Underwriter at the Closing
Time and on each Date of Delivery an opinion of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
& ▇▇▇▇▇▇▇, counsel for the Company and the Bank, addressed to
the Underwriter and dated the Closing Time and each Date of
Delivery and in form and substance satisfactory to Vorys,
▇▇▇▇▇, ▇▇▇▇▇▇▇ and ▇▇▇▇▇ LLP, counsel for the Underwriter,
stating that:
(1) the Company has an authorized capitalization as set
forth in the Prospectus under the caption
"Capitalization"; the outstanding common shares of
the Company and the Bank have been duly and validly
authorized and issued and are fully paid and
non-assessable, and all of the outstanding shares of
capital stock of the Bank are directly or indirectly
owned of record and beneficially by the Company;
except as disclosed in the Prospectus, there are no
outstanding (i) securities or obligations of the
Company or the Bank convertible into or exchangeable
for any capital stock of the Company or the Bank,
(ii) warrants, rights or options to subscribe for or
purchase from the Company or the Bank any such
capital stock or any such convertible or exchangeable
securities or obligations, or (iii) obligations of
the Company or the Bank to issue any shares of
capital stock, any such convertible or exchangeable
securities or obligation, or any such warrants,
rights or options;
(2) the Company and the Bank each has been duly organized
and incorporated and is validly existing as a
corporation in good standing under the laws of its
respective jurisdiction of incorporation with full
corporate power and authority to own its respective
properties and to conduct its respective business as
described in the Registration Statement and
Prospectus and, in the case of the Company, to
execute and deliver this Agreement and to consummate
the transactions described in this Agreement;
(3) the Company is registered as a bank holding company
under the Bank Holding Company Act and the Bank's
deposit accounts are insured up to applicable limits
by the BIF;
(4) the Company and the Bank are duly qualified or
licensed by each jurisdiction in which they conduct
their respective businesses and
-18-
in which the failure, individually or in the
aggregate, to be so licensed could have a material
adverse effect on the assets, business, operations,
earnings, prospects, properties or condition
(financial or otherwise) of the Company and the Bank
taken as a whole, and the Company and the Bank are
duly qualified, and are in good standing, in each
jurisdiction in which they own or lease real property
or maintain an office and in which such qualification
is necessary except where the failure to be so
qualified and in good standing would not have a
material adverse effect on the assets, business,
operations, earnings, prospects, properties or
condition (financial or otherwise) of the Company and
the Bank taken as a whole; except as disclosed in the
Prospectus, the Bank is not prohibited or restricted,
directly or indirectly, from paying dividends to the
Company, or from making any other distribution with
respect to the Bank's capital stock or from repaying
to the Company, any amounts which may from time to
time become due under any loans or advances to the
Bank from the Company, or from transferring the
Bank's property or assets to the Company; other than
as disclosed in the Prospectus, the Company does not
own, directly or indirectly, any capital stock or
other equity securities of any other corporation or
any ownership interest in any partnership, joint
venture or other association;
(5) the Company and the Bank are in compliance in all
material respects with all applicable laws, orders,
rules, regulations and orders, including those
relating to transactions with affiliates;
(6) neither the Company nor the Bank is in breach of, or
in default under (nor has any event occurred which
with notice, lapse of time, or both would constitute
a breach of, or default tinder), any license,
indenture, mortgage, deed of trust, loan or credit
agreement or any other agreement or instrument to
which the Company or the Bank is a party or by which
any of them or their respective properties may be
bound or affected or under any law, regulation or
rule or any decree, judgment or order applicable to
the Company or the Bank, except such breaches or
defaults which would not have a material adverse
effect on the assets, business, operations, earnings,
prospects, properties or condition (financial or
otherwise) of the Company and the Bank taken as a
whole;
(7) the execution, delivery and performance of this
Agreement by the Company and the consummation by the
Company of the transactions contemplated by this
Agreement do not and will not (A) conflict with, or
result in any breach of, or constitute a default
under (nor constitute any event which with notice,
lapse of time, or both would constitute a breach of
or default under), (i) any
-19-
provisions of the articles of incorporation, code of
regulations, charter or by-laws of the Company or the
Bank, (ii) any provision of any material license,
indenture, mortgage, deed of trust, loan, credit or
other agreement or instrument known by such counsel
and to which the Company or the Bank is a party or by
which any of them or their respective properties or
assets may be bound or affected, (iii) any law or
regulation binding upon or applicable to the Company
or the Bank or any of their respective properties or
assets, or (iv) any decree, judgment or order known
to such counsel to be applicable to the Company or
the Bank; or (B) result in the creation or imposition
of any lien, charge, claim or encumbrance upon any
property or assets of the Company or the Bank;
(8) this Agreement has been duly authorized, executed and
delivered by the Company and is a legal, valid and
binding agreement of the Company enforceable in
accordance with its terms, except as may be limited
by bankruptcy, insolvency, reorganization, moratorium
or similar laws affecting creditors' rights
generally, and by general principles of equity, and
except that enforceability of the indemnification and
contribution provisions set forth in Section 9 of
this Agreement may be limited by the federal or state
securities laws of the United States or public policy
underlying such laws;
(9) no approval, authorization, consent or order of or
filing with any federal or state governmental or
regulatory commission, board, body, authority or
agency is required in connection with the execution,
delivery and performance of this Agreement, the
consummation of the transactions contemplated hereby,
and the sale and delivery of the Shares by the
Company as contemplated hereby, other than such as
have been obtained or made under the Securities Act
and the Securities Act Regulations, and except that
such counsel need express no opinion as to any
necessary qualification under the state securities or
blue sky laws of the various jurisdictions in which
the Shares are being offered by the Underwriter or
any approval of the underwriting terms and
arrangements by the NASD;
(10) each of the Company and the Bank has all necessary
material licenses, authorizations, consents and
approvals and has made all necessary filings required
under any federal, state or local law, regulation or
rule, and has obtained all necessary authorizations,
consents and approvals from other persons, required
to conduct their respective businesses, as described
in the Prospectus; to such counsel's knowledge
neither the Company nor the Bank is in violation of,
in default under, or has received any notice
regarding
-20-
a possible violation, default or revocation of any
such material license, authorization, consent or
approval or any federal, state, local or foreign law,
regulation or decree, order or judgment applicable to
the Company or the Bank;
(11) the Shares have been duly authorized and when the
Shares have been issued and duly delivered against
payment therefor as contemplated by this Agreement,
the Shares will be validly issued, fully paid and
nonassessable, and the Underwriter will acquire the
good and marketable title to the Shares, free and
clear of any pledge, lien, encumbrance, security
interest, or other claim;
(12) the issuance and sale of the Shares by the Company is
not subject to preemptive or other similar rights
arising by operation of law, under the articles of
incorporation or code of regulations of the Company,
or under any agreement known to such counsel to which
the Company or the Bank is a party or, to such
counsel's knowledge, otherwise;
(13) there are no persons with registration or other
similar rights to have any equity securities,
including securities which are convertible into or
exchangeable for equity securities, registered
pursuant to the Registration Statement or otherwise
registered by the Company under the Securities Act,
except for those registration or similar rights which
have been waived with respect to the offering
contemplated by this Agreement;
(14) the Shares conform in all material respects to the
descriptions thereof contained in the Registration
Statement and Prospectus;
(15) the form of certificate used to evidence the Common
Shares complies in all material respects with all
applicable statutory requirements, with any
applicable requirements of the articles of
incorporation and code of regulations of the Company
and the requirements of the Nasdaq SmallCap Market;
(16) the Registration Statement has become effective under
the Securities Act and no stop order suspending the
effectiveness of the Registration Statement has been
issued and, to such counsel's knowledge, no
proceedings with respect thereto have been commenced
or threatened;
(17) as of the effective date of the Registration
Statement, the Registration Statement and the
Prospectus (except as to the financial statements and
other financial and statistical data contained
therein, as to which such counsel need express no
-21-
opinion) complied as to form in all material respects
with the requirements of the Securities Act and the
Securities Act Regulations;
(18) the statements under the captions "Capitalization,"
"Regulation", "Description of Capital Stock," and
______________ and "Shares Eligible for Future Sale,"
in the Registration Statement and the Prospectus,
insofar as such statements constitute a summary of
the legal matters referred to therein, constitute
accurate summaries thereof in all material respects;
(19) to such counsel's knowledge, there are no actions,
suits or proceedings, inquiries, or investigations
pending or threatened against the Company or the Bank
or any of their respective officers and directors or
to which the properties, assets or rights of any such
entity are subject, at law or in equity, before or by
any federal, state, local or foreign governmental or
regulatory commission, board, body, authority,
arbitral panel or agency which are required to be
described in the Prospectus but are not so described;
(20) to such counsel's knowledge, there are no contracts
or documents of a character which are required to be
filed as exhibits to the Registration Statement or
required to be described or summarized in the
Prospectus which have not been so filed, summarized
or described, and all such summaries and
descriptions, in all material respects, fairly and
accurately set forth the material provisions of such
contracts and documents;
(21) to such counsel's knowledge, the Company and the Bank
own or possess adequate license or other rights to
use all patents, trademarks, service marks, trade
names, copyrights, software and design licenses,
trade secrets, manufacturing processes, other
intangible property rights and know-how (collectively
"Intangibles") necessary to entitle the Company and
the Bank to conduct its business as described in the
Prospectus, and neither the Company, nor the Bank,
has received notice of infringement of or conflict
with (and knows of no such infringement of or
conflict with) asserted rights of others with respect
to any Intangibles which could materially and
adversely affect the business, prospects, properties,
assets, results of operations or condition (financial
or otherwise) of the Company or the Bank; and
(22) to such counsel's knowledge, each of the Company and
the Bank has filed on a timely basis all necessary
federal, state, local and foreign income and
franchise tax returns required to be filed
-22-
through the date hereof and have paid all taxes shown
as due thereon; and no tax deficiency has been
asserted against any such entity, nor does any such
entity know of any tax deficiency which is likely to
be asserted against any such entity which if
determined adversely to any such entity, could
materially adversely affect the business, prospects,
properties, assets, results of operations or
condition (financial or otherwise) of any such
entity, respectively.
In addition, such counsel shall state that they have participated in
conferences with officers and other representatives of the Company, independent
public accountants of the Company and representatives of the Underwriter, at
which the contents of the Registration Statement and Prospectus were discussed
and, although such counsel is not passing upon and does not assume
responsibility for the accuracy, completeness or fairness of the statements
contained in the Registration Statement or Prospectus (except as and to the
extent stated in subparagraphs (14), (18), and (20) above), they have no reason
to believe that the Registration Statement, the Preliminary Prospectus or the
Prospectus, as of their respective effective or issue date, and as of the date
of such counsel's opinion, contained or contains an untrue statement of a
material fact or omitted or omits to state a material fact required to be stated
therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading (it being understood
that, in each case, such counsel need express no view with respect to the
financial statements and other financial and statistical data included in the
Registration Statement, Preliminary Prospectus or Prospectus).
b) The Underwriter shall have received from ▇▇▇▇▇ ▇▇▇▇▇▇, letters
dated, respectively, as of the date of this Agreement, the
Closing Time and each Date of Delivery, as the case may be,
addressed to the Underwriter, in form and substance
satisfactory to the Underwriter, relating to the financial
statements, including any pro forma financial statements, of
the Company and the Bank, and such other matters customarily
covered by comfort letters issued in connection with
registered public offerings.
c) No amendment or supplement to the Registration Statement or
Prospectus shall have been filed to which the Underwriter
shall have objected in writing.
d) Prior to the Closing Time and each Date of Delivery (i) no
stop order suspending the effectiveness of the Registration
Statement or any order preventing or suspending the use of any
Preliminary Prospectus or Prospectus has been issued, and no
proceedings for such purpose shall have been initiated or
threatened, by the Commission, and no suspension of the
qualification of the Shares for offering or sale in any
jurisdiction, or of the initiation or threatening of any
proceedings for any of such purposes, has occurred; and (ii)
the Registration Statement and the Prospectus shall not
contain an untrue statement of material fact or omit to state
a material fact required to be stated therein or necessary to
make the
-23-
statements therein, in the light of the circumstances under
which they were made, not misleading.
e) Between the time of execution of this Agreement and the
Closing Time or the relevant Date of Delivery (i) no material
and unfavorable change in the assets, business, operations,
earnings, prospects, properties or condition (financial or
otherwise) of the Company and the Bank taken as a whole shall
occur or become known (whether or not arising in the ordinary
course of business), and (ii) no transaction which is material
and unfavorable to the Company shall have been entered into by
the Company or the Bank.
f) The Shares shall have been approved for inclusion in the
Nasdaq SmallCap Market.
g) The NASD shall not have raised any objection with respect to
the fairness and reasonableness of the underwriting terms and
arrangements.
h) The Company will, at the Closing Time and on each Date of
Delivery, deliver to the Underwriter a certificate of its
Chairman of the Board and Chief Executive Officer and Chief
Financial Officer, to the effect that, to each of such
officer's knowledge, the representations and warranties of the
Company set forth in this Agreement are true and correct and
the conditions set forth in paragraphs (g) and (h) have been
satisfied, in each case as of such date.
i) The Company shall have furnished to the Underwriter such other
documents and certificates as to the accuracy and completeness
of any statement in the Registration Statement and the
Prospectus, the representations, warranties and statement of
the Company contained herein, and the performance by the
Company of its covenants contained herein, and the fulfillment
of any conditions contained herein, as of the Closing Time or
any Date of Delivery as the Underwriter may reasonably
request.
j) The Company shall have performed such of its obligations under
this Agreement as are to be performed by the terms hereof at
or before the Closing Time or the relevant Date of Delivery.
7. Termination: The obligations of the Underwriter hereunder shall be subject to
termination in the absolute discretion of the Underwriter, at any time prior to
the Closing Time or any Date of Delivery, (i) if any of the conditions specified
in Section 6 shall not have been fulfilled when and as required by this
Agreement to be fulfilled, or (ii) if there has been since the respective dates
as of which information is given in the Registration Statement, any material
adverse change, or any development involving a prospective material adverse
change, in or affecting the assets, business, operations, earnings,
-24-
prospects, properties, condition (financial or otherwise) or management of the
Company or the Bank, whether or not arising in the ordinary course of business,
or (iii) if there has occurred outbreak or escalation of hostilities or other
national or international calamity or crisis or change in economic, political or
other conditions the effect of which on the financial markets of the United
States is such as to make it, in the judgment of the Underwriter, impracticable
to market the Shares or enforce contracts for the sale of the Shares, or (iv) if
trading in any securities of the Company has been suspended by the Commission or
by Nasdaq, or if trading generally on the New York Stock Exchange or in the
Nasdaq over-the-counter market has been suspended (including automatic halt in
trading pursuant to market-decline triggers other than those in which solely
program trading is temporarily halted), or limitations on prices for trading
(other than limitations on hours or numbers of days of trading) have been fixed,
or maximum ranges for prices for securities have been required, by such exchange
or the NASD or Nasdaq or by order of the Commission or any other governmental
authority, or (v) any federal or state statute, regulation, rule or order of any
court or other governmental authority has been enacted, published, decreed or
otherwise promulgated which in the reasonable opinion of the Underwriter
materially adversely affects or will materially adversely affect the business or
operations of the Company, or (vi) any action has been taken by any federal,
state or local government or agency in respect of its monetary or fiscal affairs
which in the reasonable opinion of the Underwriter has a material adverse effect
on the securities markets in the United States.
If the Underwriter elects to terminate this Agreement as provided in
this Section 7, the Company shall be notified promptly by telephone, promptly
confirmed by facsimile.
If the sale to the Underwriter of the Shares, as contemplated by this
Agreement, is not carried out by the Underwriter for any reason permitted under
this Agreement or if such sale is not carried out because the Company shall be
unable to comply in all material respects with any of the terms of this
Agreement, the Company shall not be under any obligation or liability under this
Agreement (except to the extent provided in Sections 5 and 9 hereof) and the
Underwriter shall be under no obligation or liability to the Company under this
Agreement (except to the extent provided in Section 9 hereof) or to one another
hereunder.
8. Indemnity and Contribution by the Company and the Underwriter:
a) The Company agrees to indemnify, defend and hold harmless the
Underwriter and any person who controls the Underwriter within
the meaning of Section 15 of the Securities Act or Section 20
of the Exchange Act, from and against any loss, expense,
liability, damage or claim (including the reasonable cost of
investigation) which, jointly or severally, the Underwriter or
any such controlling person may incur under the Securities
Act, the Exchange Act or otherwise, insofar as such loss,
expense, liability, damage or claim arises out of or is based
upon (i) any breach of any representation, warranty or
covenant of the Company
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contained herein, (ii) any failure on the part of the Company
to comply with any applicable law, rule or regulation relating
to the offering of securities being made pursuant to the
Prospectus, or (iii) any untrue statement or alleged untrue
statement of a material fact contained in the Registration
Statement (or in the Registration Statement as amended by any
post-effective amendment thereof by the Company) or in a
Prospectus (the term Prospectus for the purpose of this
Section 9 being deemed to include any Preliminary Prospectus,
the Prospectus and the Prospectus as amended or supplemented
by the Company), or arises out of or is based upon any
omission or alleged omission to state a material fact required
to be stated in either such Registration Statement or
Prospectus or necessary to make the statements made therein,
in the light of the circumstances under which they were made,
not misleading, except insofar as any such loss, expense,
liability, damage or claim arises out of or is based upon any
untrue statement or alleged untrue statement or omission or
alleged omission of a material fact contained in and in
conformity with information furnished in writing by the
Underwriter to the Company expressly for use in such
Registration Statement or such Prospectus, provided, however,
that the indemnity agreement contained in this subsection (a)
with respect to the Preliminary Prospectus or the Prospectus
shall not inure to the benefit of the Underwriter (or to the
benefit of any person controlling such Underwriter) with
respect to any person asserting any such loss, expense,
liability, damage or claim which is the subject thereof if the
Prospectus or any supplement thereto prepared with the consent
of the Underwriter and furnished to the Underwriter prior to
the Closing Time corrected any such alleged untrue statement
or omission and if the Underwriter failed to send or give a
copy of the Prospectus or supplement thereto to such person at
or prior to the written confirmation of the sale of Shares to
such person, unless such failure resulted from noncompliance
by the Company with Section 4(b) above).
b) If any action is brought against the Underwriter or a
controlling person in respect of which indemnity may be sought
against the Company pursuant to subsection (a) above, the
Underwriter shall promptly notify the Company in writing of
the institution of such action, and the Company shall assume
the defense of such action, including the employment of
counsel and payment of expenses, provided, however, that any
failure or delay to so notify the Company will not relieve the
Company of any obligation hereunder, except to the extent that
its ability to defend is actually impaired by such failure or
delay. Such Underwriter or controlling person shall have the
right to employ its or their own counsel in any the case, but
the fees and expenses of such counsel shall be at the expense
of the Underwriter or such controlling person unless the
employment of such counsel shall have been authorized in
writing by the Company in connection with the defense of such
action, or the Company shall not have employed counsel to have
charge of the defense of such
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action within a reasonable time or such indemnified party or
parties shall have reasonably concluded (based on the advice
of counsel) that there may be defenses available to it or them
which are different from or additional to those available to
the Company (in which case the Company shall not have the
right to direct the defense of such action on behalf of the
indemnified party or parties), in any of which events such
fees and expenses shall be borne by the Company and paid as
incurred (it being understood, however, that the Company shall
not be liable for the expenses of more than one separate firm
of attorneys for the Underwriter or controlling persons in any
one action or series of related actions in the same
jurisdiction (other than local counsel in any such
jurisdiction) representing the indemnified parties who are
parties to such action). Anything in this paragraph to the
contrary notwithstanding, the Company shall not be liable for
any settlement of any such claim or action effected without
the its written consent.
c) The Underwriter agrees to indemnify, defend and hold harmless
the Company, the Company's directors, the Company's officers
that signed the Registration Statement, and any person who
controls the Company within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act, from and
against any loss, expense, liability, damage or claim
(including the reasonable cost of investigation) which,
jointly or severally, the Company, or any such person may
incur under the Securities Act, the Exchange Act or otherwise,
but only insofar as such loss, expense, liability, damage or
claim arises out of or is based upon any untrue statement or
alleged untrue statement of a material fact contained in and
in conformity with information furnished in writing by the
Underwriter through the Underwriter to the Company expressly
for use in the Registration Statement (or in the Registration
Statement as amended by any post-effective amendment thereof
by the Company) or in a Prospectus, or arises out of or is
based upon any omission or alleged omission to state a
material fact in connection with such information required to
be stated either in such Registration Statement or Prospectus
or necessary to make such information, in the light of the
circumstances under which made, not misleading. The statements
set forth (i) in the last paragraph on the cover page and (ii)
under the caption "Underwriting" in the Preliminary Prospectus
and the Prospectus (to the extent such statements relate to
the Underwriter) constitute the only information furnished by
or on behalf of the Underwriter to the Company for purposes of
Section 3(j) and this Section 8.
If any action is brought against the Company or any such person in
respect of which indemnity may be sought against the Underwriter pursuant to the
foregoing paragraph, the Company or such person shall promptly notify the
Underwriter in writing of the institution of such action and the Underwriter
shall assume the defense of such action, including the employment of counsel and
payment of expenses. The Company or
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such person shall have the right to employ its own counsel in any such case, but
the fees and expenses of such counsel shall be at the expense of the Company or
such person unless the employment of such counsel shall have been authorized in
writing by the Underwriter in connection with the defense of such action or the
Underwriter shall not have employed counsel to have charge of the defense of
such action within a reasonable time or such indemnified party or parties shall
have reasonably concluded (based on the advice of counsel) that there may be
defenses available to it or them which are different from or additional to those
available to the Underwriter (in which case the Underwriter shall not have the
right to direct the defense of such action on behalf of the indemnified party or
parties), in any of which events such fees and expenses shall be borne by the
Underwriter and paid as incurred (it being understood, however, that the
Underwriter shall not be liable for the expenses of more than one separate firm
of attorneys in any one action or series of related actions in the same
jurisdiction (other than local counsel in any such jurisdiction) representing
the indemnified parties who are parties to such action). Anything in this
paragraph to the contrary notwithstanding, the Underwriter shall not be liable
for any settlement of any such claim or action effected without the written
consent of the Underwriter.
d) If the indemnification provided for in this Section 9 is
unavailable to an indemnified party under subsections (a), (b)
and (c) of this Section 9 in respect of any losses, expenses,
liabilities, damages or claims referred to therein, then each
applicable indemnifying party, in lieu of indemnifying such
indemnified party, shall contribute to the amount paid or
payable by such indemnified party as a result of such losses,
expenses, liabilities, damages or claims (i) in such
proportion as is appropriate to reflect the relative benefits
received by the Company and the Underwriter from the offering
of the Shares or (ii) if (but only if) the allocation provided
by clause (i) above is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the
relative fault of the Company and of the Underwriter in
connection with the statements or omissions which resulted in
such losses, expenses, liabilities, damages or claims, as well
as any other relevant equitable considerations. The relative
benefits received by the Company and the Underwriter shall be
deemed to be in the same proportion as the total proceeds from
the offering (net of underwriting discounts and commissions
but before deducting expenses) received by the Company bear to
the underwriting discounts and commissions received by the
Underwriter. The relative fault of the Company and of the
Underwriter shall be determined by reference to, among other
things, whether the untrue statement or alleged untrue
statement of a material fact or omission or alleged omission
relates to information supplied by the Company, or by the
Underwriter and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent
such statement or omission. The amount paid or payable by a
party as a result of the losses, claims, damages and
liabilities referred to above shall be deemed to
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include any legal or other fees or expenses reasonably
incurred by such party in connection with investigating or
defending any claim or action.
e) The Company and the Underwriter 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 account of the equitable
considerations referred to in subsection (d)(i) and, if
applicable (ii), above. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent
misrepresentation.
9. Survival: The indemnity and contribution agreements contained in Section 9
and the covenants, warranties and representations of the Company contained in
Sections 3, 4 and 5 of this Agreement shall remain in full force and effect
regardless of any investigation made by or on behalf of the Underwriter, or any
person who controls the Underwriter within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act, or by or on behalf of the
Company, its directors and officers, or any person who controls the Company
within the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act, and shall survive any termination of this Agreement or the sale
and delivery of the Shares. The Company and the Underwriter agree promptly to
notify the others of the commencement of any litigation or proceeding against it
and, in the case of the Company, against any of the Company's officers and
directors, in connection with the sale and delivery of the Shares, or in
connection with the Registration Statement or Prospectus.
10. Notices: Except as otherwise herein provided, all statements, requests,
notices and agreements shall be in writing or by telegram and, if to the
Underwriter, shall be sufficient in all respects if delivered to Friedman,
Billings, ▇▇▇▇▇▇ & Co., Inc., ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
Attention: Syndicate Department; if to the Company, shall be sufficient in all
respects if delivered to the Company at the offices of the Company at ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇.
11. Governing Law; Headings: THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAWS OF THE COMMONWEALTH OF VIRGINIA, WITHOUT REGARD TO
CONFLICTS OF LAWS PRINCIPLES. The section headings in this Agreement have been
inserted as a matter of convenience of reference and are not a part of this
Agreement.
12. Parties at Interest: The Agreement herein set forth has been and is made
solely for the benefit of the Underwriter, the Company, and the controlling
persons, directors and officers referred to in Sections 9 and 10 hereof, and
their respective successors, assigns, executors and administrators. No other
person, partnership, association or corporation (including a purchaser, as such
purchaser, from the Underwriter) shall acquire or have any right under or by
virtue of this Agreement.
-29-
13. Counterparts and Facsimile Signatures: This Agreement may be signed by the
parties in counterparts which together shall constitute one and the same
agreement among the parties. A facsimile signature shall constitute an original
signature for all purposes.
If the foregoing correctly sets forth the understanding between the
Company and the Underwriter, please so indicate in the space provided below for
the purpose, whereupon this Agreement shall constitute a binding agreement
between the Company and the Underwriter.
Very truly yours,
OHIO LEGACY CORP
By:
--------------------------------------------
By: L. ▇▇▇▇▇▇ ▇▇▇▇▇
Title: Chairman and Chief Executive Officer
Accepted and agreed to as of the date first above written:
FRIEDMAN, BILLINGS, ▇▇▇▇▇▇ & CO., INC.
By:
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Title:
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