EXHIBIT 10.2
MADISON DEARBORN CAPITAL PARTNERS II, L.P.
OLYMPUS GROWTH FUND II, L.P.
OLYMPUS EXECUTIVE FUND, L.P.
July 10, 1997
Commerce Security Bancorp, Inc.
0000 Xxxxxx Xxxxxx
Xxxxxxxxxx Xxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxx, President
Dartmouth Capital Group, L.P.
0000 Xxxxxx Xxxxxx
Xxxxxxxxxx Xxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxx, President
Re: RESALE OF SUBORDINATED CAPITAL INCOME SECURITIES, SERIES A -- EXPENSES
Gentlemen:
Reference is hereby made to that certain Purchase Agreement, dated July 10,
1997 (the "Purchase Agreement"), by and among Xxxxxx Brothers Inc. ("Xxxxxx"),
Madison Dearborn Capital Partners II, L.P. ("MDP"), Olympus Growth Fund II, L.P.
("OGF"), Olympus Executive Fund, L.P. ("OEF," and together with OGF, "Olympus"),
Dartmouth Capital Group, L.P. ("DCG") and Commerce Security Bancorp, Inc.
("CSBI"). Capitalized terms used in this letter and not otherwise defined shall
have the meanings assigned to them in the Purchase Agreement.
Notwithstanding anything to the contrary contained in the Purchase
Agreement, MDP, Olympus, CSBI and DCG hereby agree as follows:
1. XXXXXX COMMISSION. Pursuant to Section 3 of the Purchase Agreement,
Sellers have agreed to pay the $900,000 commission owed to Xxxxxx as of the
Closing by reducing pro rata as shown on Schedule 1 to the Purchase Agreement
the proceeds to be received by the Sellers upon the sale of the Securities to
Xxxxxx. The parties hereto have agreed to reallocate among them the burden of
Xxxxxx'x fee as follows:
Commerce Security Bancorp, Inc.
Dartmouth Capital Group, L.P.
July 10, 1997
Page 2
(a) CSBI will pay to DCG in immediately available funds as of the
Closing Date an amount (the "DCG Amount") equal to (x) $143,931.01,
representing DCG's share of the commission as set forth on Schedule 1 to
the Purchase Agreement, MINUS (y) 15.9923% of the Interest Adjustment (as
defined herein).
(b) CSBI will pay to each of MDP and Olympus in immediately available
funds as of the Closing Date an amount (the "Purchaser Amount"),
representing a portion of the commission payable by MDP, OGF and OEF, as
set forth on Schedule 1 to the Purchase Agreement, less an allocable
portion of the Interest Adjustment. The Purchaser Amount shall be
calculated as follows, rounded to the nearest cent:
(i) $175,000, MINUS
(ii) one half of the DCG Amount, MINUS
(iii) one-half of the Interest Adjustment.
CSBI shall allocate the Purchaser Amount payable to Olympus between OGF and
OEF on a 99:1 ratio.
2. INTEREST ADJUSTMENT. The Interest Adjustment shall be equal to the
product, rounded to the nearest cent, of (x) $576.1875 MULTIPLIED by (y) the
number of days elapsed from and including June 30, 1997 to and including the
date next preceding the Closing Date under the Purchase Agreement.
3. EXPENSES. Each of MDP and Olympus will bear one half of all
reasonable out-of-pocket expenses incurred by CSBI, DCG, MDP, or Olympus in
connection with the resale of the Securities pursuant to the Purchase Agreement
(other than the commission payable to Xxxxxx), including, without limitation,
all reasonable disbursements of such attorneys or accountants retained by any of
MDP, Olympus, CSBI or DCG, and the expenses payable to Xxxxxx under the terms of
the Purchase Agreement, excluding in each case any expense or other cost payable
pursuant to Section 6(d) or (e) of the Purchase Agreement, which shall be borne
by the Company, and any expense or other cost payable pursuant to Section 9 of
the Purchase Agreement, which shall be borne by the parties in the manner
specified therein. As between OGF and OEF, Olympus's share of the reimbursable
expenses covered by this section will be allocated on a 99:1 ratio.
Commerce Security Bancorp, Inc.
Dartmouth Capital Group, L.P.
July 10, 1997
Page 3
4. REGISTRATION OF THE SECURITIES.
(a) Except as expressly provided in the following subsection (b),
each of MDP and Olympus will bear one-quarter of all reasonable out-of-
pocket costs, fees or other expenses, including, without limitation,
reasonable legal and accounting fees, filing fees and printing costs,
incurred by CSBI in fulfilling its obligations pursuant to the Registration
Rights Agreement referenced in the Purchase Agreement, in each case to the
extent such costs, fees or other expenses are in addition to costs, fees or
other expenses that CSBI would incur in the ordinary course of meeting its
reporting obligations under Section 13 or 15(d) of the Exchange Act, and
excluding costs, fees or other expenses incurred pursuant to Sections 8 or
9 of the Registration Rights Agreement. Each of MDP and Olympus shall
reimburse CSBI for their respective share of such costs, fees or other
expenses promptly after receipt of a written request therefor which
reasonably documents the allocation of such costs, fees or other expenses.
(b) Each of MDP and Olympus shall reimburse CSBI for one-half of any
Additional Interest (as defined in Section 5 of such Registration Rights
Agreement) payable by CSBI on the Junior Subordinated Debentures as a
consequence of a Registration Default (as defined therein) pursuant to
clause (x) of such Section 5, but only to the extent that such Additional
Interest accrues during the first 90 days of such a Registration Default.
Each of MDP and Olympus shall reimburse CSBI for their respective share of
such Additional Interest promptly after receipt of a written request
therefor setting forth in reasonable detail the calculation thereof.
Except as expressly provided in the immediately preceding sentence, CSBI
shall bear the cost of, and not be entitled to reimbursement from MDP or
Olympus for, all of the amounts of Additional Interest, if any, payable by
CSBI on the Junior Subordinated Debentures.
(c) As between OGF and OEF, Olympus's share of the reimbursable
expenses and Additional Interest covered by this Section 4 will be
allocated on a 99:1 ratio.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
Commerce Security Bancorp, Inc.
Dartmouth Capital Group, L.P.
July 10, 1997
Page 4
Please confirm you agreement with the foregoing by signing this letter
below. Upon signing, this letter shall constitute the binding obligation of the
signatories hereto.
Sincerely,
MADISON DEARBORN CAPITAL PARTNERS II, L.P.
By: Madison Dearborn Partners II, L.P., its General Partner
By: Madison Dearborn Partners, Inc., its General Partner
By:
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Name: Xxxx X. Xxxx
Title: Vice President
OLYMPUS GROWTH FUND II, L.P.
By: OGF II, L.P., its general partner
By: Xxxxxx, L.L.C., its general partner
By:
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Name: Xxxxx X. Xxxxxx
Title: Member
OLYMPUS EXECUTIVE FUND, L.P.
By: OEF, L.P., its general partner
By: Xxxxxx, L.L.C., its general partner
By:
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Name: Xxxxx X. Xxxxxx
Title: Member
AGREED AND CONFIRMED
as of the date first written above
COMMERCE SECURITY BANCORP, INC.
By:
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Name: Xxxx X. Xxxxxxxxxxxxx
Title: Treasurer and Chief Financial Officer
DARTMOUTH CAPITAL GROUP, L.P.
By: Dartmouth Capital Group, Inc., its general partner
By:
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Name: Xxxx X. Xxxxxxxxxxxxx
Title: Treasurer
Commerce Security Bancorp, Inc.
Dartmouth Capital Group, L.P.
July 10, 1997
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