November 6, 2009 PERSONAL AND CONFIDENTIAL Mr. Robert J. King, Jr. Chief Executive Officer PVF Capital Corp. 30000 Aurora Road Solon, OH 44139 Dear Mr. King:
| Exhibit 1.1 | Engagement Letter between PVF Capital Corp. and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & Company, Incorporated |
November 6, 2009
PERSONAL AND CONFIDENTIAL
Dear ▇▇. ▇▇▇▇:
This letter agreement (this “Agreement”) is to confirm our understanding of the basis upon
which ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & Company, Incorporated (“▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇”) is being engaged by PVF Capital
Corp. (together with any present and future subsidiaries and affiliates of PVF Capital Corp., the
“Company”) to act as the Company’s exclusive financial advisor and to perform the following
investment banking services: (a) serving as exclusive financial and marketing advisor to the
Company in connection with a proposed rights offering of the Company’s common shares to the
Company’s existing shareholders (the “Rights Offering”); (b) serving as exclusive placement agent
to the Company in connection with (i) the private placement of any of the common shares of the
Company (or rights to purchase such common shares) not subscribed for in the Rights Offering by the
Company’s existing shareholders or any standby purchasers; (ii) the private placement or purchase
of any of the common shares of the Company (or rights to purchase such common shares) by any
standby purchasers, whether as part of the Rights Offering or otherwise; and/or (iii) any other
private placement of equity securities of the Company concurrently with or separate from the Rights
Offering including, without limitation, a “registered direct”, “wall crossing” or private
investment in public equity, or PIPE, offering (any offering described in subsections (i), (ii) and
(iii) above are collectively referred to herein as the “Private Placement”), and (c) providing
financial advisory services relating to the restructure or repurchase of existing debt instruments
or equity securities, including trust preferred securities (the “Trust Preferred Repurchase”).
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & Company, Incorporated
MEMBER SIPC AND NYSE
I. Services of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
A. Rights Offering
In the event that the Company desires to pursue a Rights Offering, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ will serve
as the Company’s exclusive financial and marketing advisor in connection with the Rights Offering
pursuant to an agency agreement containing customary representations and warranties from the
Company, requiring the delivery of an acceptable “comfort letter” from the Company’s independent
certified public accountants and an acceptable legal opinion from the Company’s legal counsel, and
providing for indemnification of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ for, among other things, any material misstatement
or omission in the Registration Statement or the Prospectus pertaining to the Rights Offering or,
in the event the indemnification provisions are held to be unenforceable, customary provisions
providing for contribution among the parties (the “Agency Agreement”). The Agency Agreement will
also contain customary provisions permitting its termination under certain circumstances, including
without limitation any material adverse change or any development involving a prospective material
adverse change in or affecting the condition of the Company or the earnings, business or management
of the Company.
It is understood that ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇’ intent to serve as the Company’s exclusive financial
and marketing advisor and to enter into the Agency Agreement is subject to, among other matters:
(a) satisfaction of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ with the Company’s financial position, results of operations,
current earnings and prospects; (b) ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇’ further satisfactory due diligence
investigation into the Company’s business; (c) market conditions at the time of the Rights
Offering; (d) preparation of the Registration Statement, Prospectus and other appropriate documents
related to the Rights Offering satisfactory to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ and its legal counsel; (e)
compliance with all legal requirements to the satisfaction of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇’ legal counsel; and
(f) the Company having an authorization and number of outstanding shares of capital stock
reasonably satisfactory to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇. Without limitation of the foregoing, it is
acknowledged and agreed that ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ shall be under no obligation of any nature whatsoever
to the Company unless and until a definitive Agency Agreement in respect of the Rights Offering is
executed and delivered by the Company and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇.
B. Private Placement
In the event that the Company desires to pursue a Private Placement, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ will
endeavor to obtain one or more commitments for the Private Placement (individually a “Commitment”
and collectively the “Commitments”) from one or more financial institutions or other sources (the
“Investors”). The major terms of the Private Placement which ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ will seek to obtain
will be deemed acceptable to the Company as evidenced by the Company’s
acceptance of a Commitment. During the term of the Agreement, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ will perform or
cause one or more of its affiliates to perform, and the Company hereby grants
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ and
its affiliates the exclusive right and authority to perform, the following services:
1. Contact and seek to elicit interest from one or more Investors to participate in the
Private Placement;
2. Coordinate inquiries from and assist in the preparation of documents and materials
providing such information and analyses as may be requested by Investors;
3. Advise the Company as to the procedures to obtain a favorable Commitment, and assist
the Company in evaluating and negotiating the terms and conditions of any Commitment; and
4. Assist the Company in closing the Private Placement after a Commitment is procured.
C. Fairness Opinion
If requested by the Company’s Board of Directors (the “Board”) or a special committee of the
Board (the “Special Committee”), ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ will provide its opinion (an “Opinion”) to the
Board or Special Committee as to the fairness, from a financial point of view, to the Company of
the financial terms of the Rights Offering or Private Placement, as applicable. It is understood
that an Opinion will be dated as of a date reasonably proximate to the date of the initial filing
of the Registration Statement relating to the Rights Offering or the date of a definitive purchase
agreement relating to a Private Placement and will be subject to such qualifications and
assumptions as Stifel ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ necessary or appropriate in its sole professional judgment.
It is further understood that, if an Opinion is requested to be included in the Registration
Statement or Prospectus relating to the Rights Offering, the offering memorandum relating to the
Private Placement, or a proxy statement distributed in connection with a shareholders’ meeting of
the Company and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ consents to such inclusion, the Opinion will be reproduced in such
Registration Statement, Prospectus, offering memorandum or proxy statement in full, and any
description of or reference to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ or summary of the Opinion in such Registration
Statement, Prospectus, offering memorandum or proxy statement will be in a form reasonably
acceptable to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ and its counsel and consistent with similar descriptions or
references in transaction of this type. In rendering an Opinion, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ will direct its
advice solely to the Board or the Special Committee, as applicable, and such advice will not
constitute a recommendation to any shareholder of the Company as to how such shareholder should
vote at any shareholders’ meeting held in connection with the Rights Offering or Private Placement
or whether or not such shareholder should exercise any rights received in connection with the
Rights Offering, invest in any Private Placement, or vote in favor of any Rights Offering or
Private Placement. An Opinion will not be reproduced, summarized, described or referred to without
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇’ prior written consent.
D. Trust Preferred Repurchase
In its capacity as exclusive financial advisor relating to the restructure or repurchase of
existing debt instruments or equity securities, including a Trust Preferred Repurchase, ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ shall be available for advice, and shall advise the Company with respect to such financial
matters as the Company shall from time to time request.
II. Representations, Warranties, Terms and Conditions
The Company hereby represents and warrants to, and agrees with, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ as follows:
A. This Agreement has been duly authorized and represents the legal, valid, binding and
enforceable obligation of the Company and that entering into this Agreement does not require
the approval or consent of any governmental or regulatory agency or violates any law,
regulation, contract or order binding on the Company.
B. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇’ services in obtaining the Private Placement are fully performed at
the time the Company accepts or otherwise enters into a Commitment and the Private Placement
closes (or at the time the Company fails to close, defaults on or abandons the Commitment as
further described in Section III (A)).
C. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ is hereby granted the sole and exclusive right and authority to
locate Investors and to obtain Commitments during the term of this Agreement. If the
Company accepts or otherwise enters into any Commitment during the term of this Agreement or
within 12 months after expiration or termination of this Agreement (with any party with whom
either the Company or ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ had contact regarding a Private Placement, Rights
Offering or Trust Preferred Repurchase during the term of this Agreement), and the Company
closes the Private Placement under such Commitment, whether or not such Private Placement or
Commitment was arranged through ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ (although such closing may occur subsequent
to the expiration of this Agreement), the Company expressly agrees that ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇’
services have been fully performed as outlined herein, and the Company shall pay ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ compensation as outlined herein. In order that the Company and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ can
best coordinate efforts to obtain a Commitment satisfactory to the Company, the Company
agrees that it will not initiate or engage in any discussions relating to a Private
Placement during the term of this Agreement except through ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇.
D. The Company will furnish ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ with all information and material
concerning the Company, the Rights Offering, the Private Placement
and the
Trust Preferred
Repurchase which ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ requests in connection with the
performance of its obligations hereunder (the “Information”). The Company represents
and warrants that, to the best of the Company’s knowledge, all information made available to
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ by the Company or contained in any offering materials used in connection
with the Private Placement, or the Registration Statement or any Prospectus prepared in
connection with a Rights Offering, will, at all times during the period of the engagement of
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ hereunder, be complete and correct in all material respects and will not
contain any untrue statement of a material fact or omit to state a material fact necessary
in order to make the statements therein not misleading in light of the circumstances under
which such statements are made. The Company further represents and warrants that any
projections provided to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ or contained in any offering materials used in
connection with the Private Placement, or the Registration Statement or the Prospectus, will
have been prepared in good faith and will be based upon assumptions which the Company’s
management believes, in light of the circumstances under which they are made, are
reasonable. The Company acknowledges and agrees that in rendering its services hereunder
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ will be using and relying upon, without any independent investigation or
verification thereof, all information that is or will be furnished to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ by or
on behalf of the Company and on publicly available information, and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ will not
in any respect be responsible for the accuracy or completeness of any of the foregoing kinds
of information, and that ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ will not undertake to make an independent appraisal
of any of the assets of the Company. In particular, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ will assume and will
not independently investigate or verify that the aggregate allowances and reserves for loan
losses set forth in the Company’s financial statements are in the aggregate adequate to
cover all such losses. Furthermore, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ will not make or obtain any independent
evaluation, appraisal or physical inspection of any of the Company’s assets or liabilities,
the collateral securing any of such assets or liabilities, or the collectibility of any such
assets, nor will ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ review the loan or credit files of the Company. The
Company understands that in rendering services hereunder ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ does not provide
accounting, legal or tax advice and will rely upon the advice of counsel to the Company and
other advisors to the Company as to accounting, legal, tax and other matters relating to the
Rights Offering, the Private Placement, the Trust Preferred Repurchase or any other
transaction contemplated by this Agreement.
E. In connection with engagements of the nature covered by this Agreement, it is ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇’ practice to provide for indemnification, contribution, and limitation of
liability. By signing this Agreement, the Company agrees to the provisions attached to this
Agreement (Attachment A), which provisions are expressly incorporated by reference herein.
F. The Company shall make or cause to be made state “blue sky” applications in such
states and jurisdictions as shall be required by law in connection
with the Rights Offering
and/or Private Placement. It shall be the Company’s obligation to bear all blue sky counsel
fees and expenses.
G. It is understood that the offer and sale of the securities sold in the Private
Placement (the “Private Securities”) will be exempt from the registration requirements of
the Securities Act of 1933, as amended (the “Act”), pursuant to Section 4(2) thereof. The
Company will not, directly or indirectly, make any offer or sale of Private Securities or of
securities of the same or a similar class as the Private Securities if as a result the offer
and sale of Private Securities contemplated hereby would fail to be entitled to the
exemption from the registration requirements of the Act provided for in such Section 4(2).
As used herein, the terms “offer” and “sale” have the meanings specified in Section 2(3) of
the Act.
H. In connection with all offers and sales of the Private Securities the Company will:
(a) not offer or sell the Private Securities by means of any form of general
solicitation or general advertising. The Company will not at any time during the
term of this engagement, or for a period of six months following completion of the
placement of Private Securities contemplated hereby, make any reference publicly to
the transactions contemplated hereby, by way of the issuance of a press release, the
placement of an advertisement or otherwise, without the prior written consent of
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇;
(b) not offer or sell the Private Securities to any person who is not an
“accredited investor” as defined in Rule 501 under the Act; and
(c) exercise reasonable care to ensure that the purchasers of the Private
Securities are not underwriters within the meaning of Section 2(11) of the Act.
I. In connection with any Private Placement of Private Securities, the Company will use
its reasonable best efforts to file a registration statement with the Securities and
Exchange Commission covering the re-sale of the Private Securities within 60 days after the
close of the Private Placement.
J. In connection with a Rights Offering, the Company shall cause each officer and
director of the Company to execute a customary lock-up agreement expiring not less than 180
days after the closing of the Rights Offering. In addition, except for securities issued
pursuant to existing employee benefit plans in accordance with past practices, the Company
shall agree not to issue, offer to sell or sell any shares of its common stock, equity
securities or options, warrants or other securities exercisable, convertible or exchangeable
for common stock or equity securities (other than any
rights or other securities issued in
connection with the Rights Offering and shares and warrants issued in the Trust Preferred
Repurchase) without ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇’ prior written consent for a period of 180 days after
the closing of the Rights Offering.
III. Compensation/Payment for Services Performed
In consideration for ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇’ services hereunder, the Company shall compensate ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ as follows:
A. The Company shall pay or cause ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ to be paid as follows:
(a) An initial retainer fee of $25,000, payable upon the execution of this
Agreement and an additional monthly retainer fee of $25,000 payable on the
30th day of each month during the term of this Agreement, commencing on
November 30, 2009. The retainer fees shall be earned when paid and shall be
nonrefundable, provided that such fee shall be credited against any fees that may be
payable pursuant to subsection III(A)(b) below and further provided that all fees
then due and payable to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ pursuant to this Agreement have been
received by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇.
(b) A placement fee (the “Placement Fee”) equal to: (i) 1.50% (150 basis
points) of the aggregate gross dollar amount of rights subscribed for in the Rights
Offering by the Company’s existing shareholders pursuant to their basic subscription
privileges, plus (ii) 6.00% (600 basis points) of the aggregate gross proceeds of
any rights, common shares or other securities sold in any Private Placement or any
amounts raised through the exercise of over-subscription privileges in the Rights
Offering; provided, however, that the applicable Placement Fee for
any rights, shares or other securities purchased by members of the Company’s Board of Directors
in connection with the Private Placement shall instead be 1.50% (150 basis points)
of the aggregate gross proceeds of the rights, shares or other securities sold to
such Directors. The Placement Fee is due and payable to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ on the date
of the first closing of the applicable transaction. Any selling concession paid to
another broker-dealer in connection with the Private Placement or the Rights
Offering will be separately agreed to by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ and such broker-dealer, and
will not result in an additional Placement Fee to the Company.
(c) An Opinion fee of $100,000, payable upon delivery of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇’
Opinion, if such Opinion is requested by the Company. The Opinion fee shall be
earned when paid and shall be nonrefundable, even in the event that ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
is unable to provide its opinion that the financial terms of the Rights Offering or
Private Placement, as applicable, are fair, from a financial point of view, to the
Company, or if the Company or any other party
PVF Capital Corp.
November 6, 2009
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November 6, 2009
Page 8
determines not to proceed with the
subject Rights Offering or Private Placement.
(d) A financial advisory fee of $50,000 (the “Financial Advisory Fee”), payable
upon execution of this Agreement in connection with the Trust Preferred Repurchase.
The Financial Advisory Fee shall be deemed earned when paid and shall be
nonrefundable. The Financial Advisory Fee is not negotiable and is not subject to
any reduction, set-off, counterclaim or refund for any reason or matter whatsoever.
(e) If the Placement Fee, any retainer fees, the Opinion fee, if applicable,
and/or the Financial Advisory Fee are not fully paid when due, the Company agrees to
pay all costs of collection or other enforcement of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇’ rights
hereunder, including but not limited to attorneys’ fees and expenses, whether
collected or enforced by suit or otherwise. The Placement Fee, retainer fees and
Opinion fee are not negotiable and are not subject to any reduction, set-off,
counterclaim or refund for any reason or matter whatsoever, except as expressly set
forth in subsection III(A)(a) above.
B. The Company understands that an Investor providing the Private Placement financing
may be interested in providing other financing for the benefit of the Company. The Company
agrees to compensate ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ in the same manner and in the same percentage as the
Placement Fee provided in Section III (A) above of the amount of any financing from the
Investor or any affiliate of the Investor which, within 12 months from the expiration or
termination date of this Agreement, may be committed to or paid to the Company, or to any
other person or entity that currently is or hereafter may be affiliated with, associated
with, owned by or owning, or controlled by, controlling or under common control with the
Company.
C. In addition to the fees described in Sections III(A) and III(B) above and the
obligation of the Company to pay certain expenses set forth in Sections II(E) and II(F)
above, and whether or not any Rights Offering or Private Placement is consummated, the
Company will pay all of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇’ reasonable out-of-pocket expenses (including,
without limitation, expenses related to document and presentation materials, travel,
external database and communications services, courier and delivery services, and the fees
and expenses of its outside legal counsel) incurred in connection with this engagement. Any
such out-of-pocket expenses shall be payable as they are incurred upon request by ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇. Such expenses shall be documented to the Company’s reasonable satisfaction and
shall not exceed $175,000 without the Company’s prior approval. In connection with a Rights
Offering, the Company will pay all expenses incurred in connection with the Rights Offering,
including the fees and expenses of the Company’s accountants and counsel and fees and
expenses incurred in connection with (i) the preparation, printing, filing, mailing and
delivery of the
PVF Capital Corp.
November 6, 2009
Page 9
November 6, 2009
Page 9
Registration Statement and Prospectus in its preliminary and final forms and
any amendments thereto, including fees payable to the Securities and Exchange Commission and
the Financial Industry Regulatory Authority; (ii) if applicable, the listing or
qualification of the rights (or
underlying securities) for trading on an exchange or on The New York Stock Exchange,
Nasdaq Stock Market, or other exchange or quotation system; (iii) the printing and mailing
of the Agency Agreement and related documents; (iv) the issuance, transfer and delivery of
the rights (or underlying securities) including issue and transfer taxes, if any; (v) the
qualification, registration or exemption, if required, of the rights or securities to be
offered and sold in the Rights Offering under the securities laws of any states or
jurisdictions in which the Company’s shareholders reside, including the costs of preparing,
printing and mailing the “Blue Sky” surveys and the fees and disbursements of “Blue Sky”
counsel in connection therewith; (vi) the cost of any required due diligence procedures by
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇; (vii) the Company’s travel in connection with “roadshow” informational
meetings and presentations for the brokerage community and institutional investors; (viii)
settlement in same day funds, if desired by the Company; and (ix) registrar and transfer
agent fees.
IV. Miscellaneous
A. The term of this engagement will continue until terminated in the manner provided
for in this Section. Either party may terminate ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇’ engagement hereunder at
any time by giving the other party at least 30 days’ prior written notice. Notwithstanding
the foregoing, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ may terminate this Agreement at any time if (i) it reasonably
determines that results from its due diligence review of the Company’s business, management
and future prospects are unsatisfactory or (ii) its Private Placement Committee does not
approve proceeding with the Rights Offering or Private Placement. The provisions of
Sections II(C), II(E), II(I), II(J), III (A), III (B), III (C), IV(B), IV(C), IV(D), IV(F),
IV(G) and IV(H) hereof shall survive any expiration or termination of this Agreement.
B. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ is being retained to serve as financial advisor solely to the
Company, and it is agreed that the engagement of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ is not, and shall not be
deemed to be, on behalf of, and is not intended to, and will not, confer rights or benefits
upon any shareholder or creditor of the Company or upon any other person or entity. No one
other than the Company is authorized to rely upon this engagement of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ or any
statements, conduct or advice of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, and no one other than the Company is
intended to be a beneficiary of this engagement. All opinions, advice or other assistance
(whether written or oral) given by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ in connection with this engagement are
intended solely for the benefit and use of the Company and will be treated by the Company as
confidential, and no opinion, advice or other assistance of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ shall be used
for any other purpose or reproduced, disseminated, quoted or referred to at any time, in any
manner or for any
PVF Capital Corp.
November 6, 2009
Page 10
November 6, 2009
Page 10
purpose, nor shall any public or other references to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ (or
to such opinions, advice or other assistance) be made without the express prior written
consent of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇.
C. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ acknowledges that a portion of the Information may contain
confidential and proprietary business information concerning the Company. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
agrees, except as otherwise required by law, judicial process or regulatory request or
demand, to maintain the confidentiality of such Information; provided that such Information
may be disclosed to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇’ employees, agents and representatives who need to know
such Information for the purpose of assisting ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ in rendering the services
contemplated hereunder (it being understood that such persons shall be informed of the
confidential nature of the Information and shall be directed to treat such Information
confidentially). The confidentiality agreement hereunder shall not apply to Information
which: (i) becomes generally available to the public other than as a result of disclosure by
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ or its representatives; (ii) was available on a nonconfidential basis prior
to its disclosure to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇; or (iii) becomes available to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ on a
nonconfidential basis from a source other than the Company or its representatives provided
that such source is not known to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ to be bound by a confidentiality agreement
with the Company or its representatives.
D. The Company agrees that, following the closing or consummation of the Rights
Offering, Private Placement and/or Trust Preferred Repurchase, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ has the right
to place advertisements in financial and other newspapers and journals at its own expense,
describing its services to the Company and a general description of the subject
transaction(s). In addition, the Company agrees to include in any press release or public
announcement announcing the Rights Offering, Private Placement or Trust Preferred Repurchase
a reference to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇’ role in connection with such transaction, provided that the
Company will submit a copy of any such press release or public announcement to ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ for its prior approval, which approval shall not be unreasonably withheld or
delayed.
E. The Company represents and warrants that there are no brokers, representatives or
other persons that have an interest in any compensation due to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ from any
transaction contemplated herein. The Company acknowledges and agrees that ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
is a full-service securities firm and as such from time-to-time may effect transactions for
its own account or the accounts of its customers and hold long or short positions in debt or
equity securities of the Company. In addition, the Company has received full disclosure of,
and hereby waives, any conflict of interest that may result from ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ both acting
as the Company’s financial advisor in connection with the proposed Rights Offering and
Private Placement and rendering the Opinion to the Board or Special Committee in connection
with any such Rights Offering or Private Placement.
PVF Capital Corp.
November 6, 2009
Page 11
November 6, 2009
Page 11
F. The terms and provisions of this Agreement are solely for the benefit of the Company
and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ and the other Indemnified Persons and their respective successors,
assigns, heirs and personal representatives, and no other person shall acquire or have any
right by virtue of this Agreement. The Company and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
acknowledge and agree that ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ is acting as an independent contractor, and
is not a fiduciary of, nor will its engagement hereunder give rise to fiduciary duties to,
the Company, the Board or any Special Committee. This Agreement represents the entire
understanding between the Company and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ with respect to the Rights Offering,
the Private Placement, the Trust Preferred Repurchase and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇’ engagement
hereunder, and all prior discussions are merged herein. This Agreement may be executed in
two or more counterparts (including fax or electronic counterparts), all of which together
will be considered a single instrument. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF OHIO WITHOUT REGARD TO SUCH STATE’S PRINCIPLES
OF CONFLICTS OF LAWS, AND MAY BE AMENDED, MODIFIED OR SUPPLEMENTED ONLY BY WRITTEN
INSTRUMENT EXECUTED BY EACH OF THE PARTIES HERETO.
G. It is understood that ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇’ obligation under this Agreement is to use its
commercially reasonable efforts throughout the period for which it acts as the Company’s
exclusive agent as described herein. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇’ engagement is not intended to provide
the Company or any other person or entity with any assurances that any Rights Offering,
Private Placement, Trust Preferred Repurchase or other transaction will be consummated, and
in no event will ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ be obligated to purchase Private Securities or the
Company’s common shares or other securities in the Rights Offering or otherwise for its own
account or the accounts of its customers.
H. The parties hereby waive any right to a trial by jury with respect to any dispute
related to this Agreement, any transaction contemplated hereby, or any other matter
contemplated hereby.
PVF Capital Corp.
November 6, 2009
Page 12
November 6, 2009
Page 12
If the foregoing correctly sets forth the entire understanding and agreement between ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ and the Company, please so indicate in the space provided for that purpose below and
return an executed copy to us, whereupon this letter shall constitute a binding agreement as of the
date first above written.
| ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & COMPANY, INCORPORATED |
||||
| By: | /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ | |||
| ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ | ||||
| Managing Director | ||||
AGREED:
PVF CAPITAL CORP.
By: |
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇. | |||
| Chief Executive Officer |
ATTACHMENT A
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & COMPANY, INCORPORATED
INDEMNIFICATION, CONTRIBUTION AND
LIMITATION OF LIABILITY PROVISIONS
INDEMNIFICATION, CONTRIBUTION AND
LIMITATION OF LIABILITY PROVISIONS
| (a) | The Company agrees to indemnify and hold harmless ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ and its affiliates and their respective officers, directors, employees and agents, and any persons controlling ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ or any of its affiliates within the meaning of Section 15 of the Securities Act of 1933 or Section 20 of the Securities Exchange Act of 1934 (▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ and each such other person or entity being referred to herein as an “Indemnified Person”), from and against all claims, liabilities, losses or damages (or actions in respect thereof) or other expenses which (A) are related to or arise out of (i) actions taken or omitted to be taken (including any untrue statements made or any statements omitted to be made) by the Company or its affiliates or (ii) actions taken or omitted to be taken by an Indemnified Person with the consent or in conformity with the actions or omissions of the Company or its affiliates or (B) are otherwise related to or arise out of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇’ activities on behalf of the Company. The Company will not be responsible, however, for any losses, claims, damages, liabilities or expenses pursuant to the preceding sentence which are finally judicially determined to have resulted solely from such Indemnified Person’s bad faith, gross negligence or willful misconduct. In addition, the Company agrees to reimburse each Indemnified Person for all out-of-pocket expenses (including fees and expenses of counsel) as they are incurred by such Indemnified Person in connection with investigating, preparing, conducting or defending any such action or claim, whether or not in connection with litigation in which any Indemnified Person is a named party, or in connection with enforcing the rights of such Indemnified Person under this Agreement. | |
| (b) | If for any reason the foregoing indemnity is unavailable to an Indemnified Person or insufficient to hold an Indemnified Person harmless, then the Company shall contribute to the amount paid or payable by such Indemnified Person as a result of such claim, liability, loss, damage or expense in such proportion as is appropriate to reflect not only the relative benefits received by the Company on the one hand and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ on the other, but also the relative fault of the Company and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, as well as any relevant equitable considerations, subject to the limitation that in any event the aggregate contribution of all Indemnified Persons to all losses, claims, liabilities, damages and expenses shall not exceed the amount of fees actually received by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ pursuant to this Agreement. It is hereby further agreed that the relative benefits to the Company on the one hand and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ on the other with respect to any transaction or proposed transaction contemplated by this Agreement shall be deemed to be in the same proportion as (i) the total value the transaction or proposed transaction bears to (ii) the fees paid to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ with respect to such transaction. |
| (c) | No Indemnified Person shall have any liability to the Company or any other person in connection with the services rendered pursuant to this Agreement, except for any liability for losses, claims, damages or liabilities finally judicially determined to have resulted solely from such Indemnified Person’s bad faith, gross negligence or willful misconduct. | |
| (d) | The Company agrees that it will not settle or compromise or consent to the entry of any judgment in any pending or threatened claim, action, suit or proceeding in respect of which indemnification may be sought from the Company by any Indemnified Person (whether any Indemnified Person is an actual or potential party to such claim, action, suit or proceeding) unless such settlement, compromise or consent includes an unconditional release of Indemnified Persons hereunder from all liability arising out of such claim, action, suit or proceeding. | |
| (e) | To the extent officers or employees of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ appear as witnesses, are deposed, or otherwise are involved in or assist with any action, hearing or proceeding related to or arising from any transaction or proposed transaction contemplated by this Agreement or ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇’ engagement hereunder, or in a situation where such appearance, involvement or assistance results from ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇’ engagement hereunder, the Company will pay ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, in addition to the fees set forth above, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇’ customary per diem charges. In addition, if any Indemnified Person appears as a witness, is deposed or otherwise is involved in any action relating to or arising from any transaction or proposed transaction contemplated by this Agreement or ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇’ engagement hereunder, or in a situation where such appearance, involvement or assistance results from ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇’ engagement hereunder, the Company will reimburse such Indemnified Person for all expenses (including fees and expenses of counsel) incurred by it by reason of it or any of its personnel being involved in any such action. | |
| (f) | The Company waives any right to a trial by jury with respect to any claim or action arising out of this Agreement or the actions of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, and consents to personal jurisdiction, service of process and venue in any court in which any claim covered by the provisions of this Attachment A may be brought against an Indemnified Person. | |
| (g) | The provisions of this Attachment A shall be in addition to any liability the Company may have to any Indemnified Person at common law or otherwise, and shall survive the expiration or termination of this Agreement and the closing or consummation of any transaction or proposed transaction contemplated by this Agreement. |