HOPFED BANCORP, INC.
2,040,000 TO 2,760,000 Shares
Common Stock
($.01 Par Value)
$10.00 Per Share
SALES AGENCY AGREEMENT
----------------------
_______________, 1997
Friedman, Billings, Xxxxxx & Co., Inc.
Potomac Tower
0000 Xxxxxxxxxx Xxxxxx Xxxxx
Xxxxxxxxx, XX 00000
Investment Bank Services, Inc.
The 1000 Building
0000 Xxxxxxxx'x Xxxx
Xxxxx 000
Xxxxxxxxxx, Xxxxxxxx 00000
Ladies and Gentlemen:
HopFed Bancorp, Inc., a Delaware corporation (the "Company"), and
Hopkinsville Federal Savings Bank, a federally chartered and insured mutual
savings bank (the "Bank"), hereby confirm their respective agreements with
Investment Bank Services, Inc. ("IBS") and Friedman, Billings, Xxxxxx & Co.,
Inc. ("FBR"), broker-dealers registered with the Securities and Exchange
Commission ("Commission") and members of the National Association of Securities
Dealers, Inc. ("NASD") hereinafter referred to as the ("Agents"), as follows:
1. Introductory. The Bank intends to convert from a federally
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chartered mutual savings bank to a federally chartered stock savings bank, to be
known as Hopkinsville Federal Savings Bank, and to reorganize into a holding
company structure and become a wholly owned subsidiary of the Company (the
"Conversion") pursuant to a Plan of Conversion adopted on May 21, 1997 (the
"Plan"). In accordance with the Plan, the Company is offering shares of its
common stock, par value $.01 per share (the "Shares"), pursuant to
nontransferable subscription rights in a subscription offering (the
"Subscription Offering") to certain depositors and borrowers of the Bank and to
the Bank's Employee Stock Ownership Plan (the "ESOP"). The Company may offer
Shares not subscribed for in the Subscription Offering in a community offering
to certain members of the general public (the "Community Offering"). In the
Community Offering, first preference will be
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given to natural persons who are permanent residents of Xxxxxxxx, Xxxxxxxxx,
Xxxx and Xxxxx Counties, Kentucky. In the Subscription and Community Offerings
(the "Offerings"), the Company is offering between 2,040,000 and 2,760,000
Shares, with the possibility of offering up to 3,174,000 Shares without a
resolicitation of subscribers, as contemplated by Title 12 of the Code of
Federal Regulations, Part 563b. No person, individually or together with
associates of and persons acting in concert with such person, other than the
ESOP, may purchase more than $500,000 of the aggregate value of the Shares
offered in the Conversion; provided, however, that the maximum overall purchase
limitation may be increased or decreased and the amount permitted to be
subscribed for may be increased or decreased in the sole discretion of the
Company.
The Company and the Bank have been advised by the Agents that the
Agents will use their best efforts to assist the Company and the Bank with the
sale of the Shares in the Offerings. Prior to the execution of this Agreement,
the Company has delivered to the Agents the Prospectus dated _______________,
1997 (as hereinafter defined) and all supplements thereto to be used in the
Offerings. Such Prospectus contains information with respect to the Company,
the Bank and the Shares.
2. Representations and Warranties. The Company and the Bank jointly
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and severally represent and warrant to Agents that:
(a) The Company has filed with the Commission a registration
statement, including exhibits and an amendment or amendments thereto, on Form
S-1(No. 333-30215), including the Prospectus, for the registration of the Shares
under the Securities Act of 1933, as amended (the "Act"); and such registration
statement has become effective under the Act, and no stop order has been issued
with respect thereto and no proceedings therefor have been initiated or
threatened by the Commission. Except as the context may otherwise require, such
registration statement, as amended or supplemented, on file with the Commission
at the time such registration statement became effective, including the
Prospectus, financial statements, schedules, exhibits and all other documents
filed as part thereof, as amended and supplemented, is herein called the
"Registration Statement," and the prospectus, as amended or supplemented, on
file with the Commission at the time the Registration Statement became effective
is herein called the "Prospectus," except that if the prospectus filed by the
Company with the Commission pursuant to Rule 424(b) of the general rules and
regulations of the Commission under the Act (the "Regulations") differs from the
form of prospectus on file at the time the Registration Statement became
effective, the term "Prospectus" shall refer to the Rule 424(b) prospectus from
and after the time it is filed with or mailed for filing to the Commission and
shall include any amendments or supplements thereto from and after their dates
of effectiveness or use, respectively.
(b) The Bank has filed an Application for Approval of Conversion
on Form AC, including exhibits (as amended or supplemented, the "Form AC" and
together with the Form H-(e)1-S referred to below, the "Conversion Application")
with the Office of Thrift Supervision (the "Office"), which Form AC has been
approved by the Office; and the Prospectus included as part of the Form AC has
been approved for use by the Office. No order has been issued by the Office
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preventing or suspending the use of the Prospectus; and no action by or before
the Office revoking such approvals is pending or, to the Bank's best knowledge,
threatened. The Company has filed with the Office the Company's application on
Form H-e(1)-S promulgated under the savings and loan holding company provisions
of the Home Owners' Loan Act, as amended and the regulations promulgated
thereunder ("HOLA") and will have received, as of the Closing Date (as defined
below), approval of its acquisition of the Bank from the Office.
(c) At the date of the Prospectus and at all times subsequent
thereto through and including the Closing Date (i) the Registration Statement
and the Prospectus (as amended or supplemented, if amended or supplemented)
complied with the Act and the Regulations, (ii) the Registration Statement (as
amended or supplemented, if amended or supplemented) did not contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading, and
(iii) the Prospectus (as amended or supplemented, if amended or supplemented)
did not contain any untrue statement of material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading. Representations or warranties in this subsection shall not apply to
statements or omissions made in reliance upon and in conformity with written
information furnished to the Company or the Bank relating to the Agents by or on
behalf of the Agents expressly for use in the Registration Statement or
Prospectus.
(d) The Company has been duly organized as a Delaware
corporation, the Bank has been duly organized as a mutual savings bank under the
laws of the United States. Each of the Company and the Bank is validly existing
and in good standing under the laws of the jurisdiction of its organization with
full power and authority to own its property and conduct its business as
described in the Registration Statement and Prospectus; the Bank is a member in
good standing of the Federal Home Loan Bank ("FHLB") of Cincinnati; and the
deposit accounts of the Bank are insured by the Savings Association Insurance
Fund ("SAIF") administered by the Federal Deposit Insurance Corporation ("FDIC")
up to the applicable limits. Each of the Company and the Bank is not required to
be qualified to do business as a foreign corporation in any jurisdiction where
non-qualification would have a material adverse effect on the Company and the
Bank, taken as a whole. The Bank does not own equity securities of or an equity
interest in any business enterprise except as described in the Prospectus. Upon
amendment of the Bank's charter and bylaws as provided in the rules and
regulations of the Office and completion of the sale by the Company of the
Shares as contemplated by the Prospectus, (i) the Bank will be converted
pursuant to the Plan to a federally chartered capital stock savings bank with
full power and authority to own its property and conduct its business as
described in the Prospectus, (ii) all of the authorized and outstanding capital
stock of the converted Bank will be owned of record and beneficially by the
Company, and (iii) the Company will have no direct subsidiaries other than the
converted Bank. The conversion will have been effected in all material respects
in accordance with all applicable regulations, decisions and orders; and, except
with respect to the filing of certain post-conversion reports, all the terms,
conditions, requirements, and provisions relating to the conversion imposed by
the Office will have been, and, with respect to any future Office conditions,
will be complied with by the Company and the Bank in all material respects or
appropriate waivers will have been obtained.
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(e) Each of the Company and the Bank has good, marketable and
insurable title to all assets material to its business and to those assets
described in the Prospectus as owned by it, free and clear of all material
liens, charges, encumbrances or restrictions, except for liens for taxes not yet
due, except as described in the Prospectus and except as could not in the
aggregate have a material adverse effect upon the operations or financial
condition of the Company and the Bank, taken as a whole; and all of the leases
and subleases material to the operations or financial condition of the Bank
under which it holds properties, including those described in the Prospectus,
are in full force and effect as described therein.
(f) The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have been duly and validly
authorized by all necessary actions on the part of each of the Company and the
Bank, and this Agreement is a valid and binding obligation with valid execution
and delivery of each of the Company and the Bank, enforceable in accordance with
its terms (except as the enforceability thereof may be limited by bankruptcy,
insolvency, moratorium, reorganization or similar laws relating to or affecting
the enforcement of creditors' rights generally or the rights of creditors of
savings and loan holding companies the accounts of whose subsidiaries are
insured by the FDIC or by general equity principles, regardless of whether such
enforceability is considered in a proceeding in equity or at law, and except to
the extent that the provisions of Sections 8 and 9 hereof may be unenforceable
as against public policy).
(g) There is no litigation or governmental proceeding pending or,
to the best knowledge of the Company or the Bank, threatened against or
involving the Company or the Bank, or any of their respective assets which
individually or in the aggregate would reasonably be expected to have a material
adverse effect on the condition (financial or otherwise), results of operations
and business, including the assets and properties, of the Company and the Bank,
taken as a whole.
(h) The Company and the Bank have received the opinion of
Reinhart, Boerner, Van Deuren, Xxxxxx & Rieselbach, P.C. with respect to federal
tax consequences of the Conversion, and the opinion of York, Xxxx & Co. -
Hopkinsville, LLP with respect to Kentucky income tax consequences of the
Conversion, to the effect, respectively, that the Conversion will constitute a
tax-free reorganization under the Internal Revenue Code of 1986, as amended, and
will not be a taxable transaction for the Bank or the Company under the laws of
Kentucky, and the facts relied upon in such opinions are accurate and complete.
(i) Each of the Company and the Bank has all such corporate
power, authority, authorizations, approvals and orders as may be required to
enter into this Agreement and to carry out the provisions and conditions hereof,
subject to the satisfaction of certain conditions imposed by the Office in
connection with its approvals of the Form AC and the Application H-(e)1-S, and
except as may be required under the securities or "blue sky" laws of various
jurisdictions, and in the case of the Company, as of the Closing Date, will have
such approvals and orders to issue and sell the Shares to be sold by the Company
as provided herein, and in the case of the Bank, as of the Closing Date, will
have such approvals and orders to issue and sell the shares of its common stock
to be sold to the Company as provided in the Plan, subject to the issuance of an
amended charter in the form
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required for federally chartered stock savings banks (the "Stock Charter"), the
form of which Stock Charter has been approved by the Office.
(j) To the best of their knowledge, neither the Company nor the
Bank is in violation of any rule or regulation of the Office or the FDIC that
could reasonably be expected to result in any enforcement action against the
Company, the Bank or their officers or directors that might have a material
adverse effect on the condition (financial or otherwise), operations,
businesses, assets or properties of the Company and the Bank, taken as a whole.
(k) The consolidated financial statements and any related notes
or schedules which are included in the Registration Statement and the Prospectus
fairly present the consolidated financial condition, results of operations,
retained earnings and cash flows of the Bank at the respective dates thereof and
for the respective periods covered thereby and comply as to form with the
applicable accounting requirements of the Regulations and the applicable
accounting regulations of the Office. Such financial statements have been
prepared in accordance with generally accepted accounting principles
consistently applied throughout the periods involved, and such financial
statements are consistent with the most recent financial statements and other
reports filed by the Bank with the Office and the FDIC except as such generally
accepted accounting principles may otherwise require. The tables in the
Prospectus accurately present the information purported to be shown thereby at
the respective dates thereof and for the respective periods therein.
(l) There has been no material change in the condition (financial
or otherwise), results of operations or business, including assets and
properties of the Company and the Bank, taken as a whole, since the latest date
as of which such consolidated condition is set forth in the Prospectus; and the
capitalization, assets, properties and business of each of the Company and the
Bank conform to the descriptions thereof contained in the Prospectus. None of
the Company or the Bank has any material liabilities of any kind, contingent or
otherwise, except as set forth in the Prospectus.
(m) No default exists, and no event has occurred which, with
notice or lapse of time or both, would constitute a default on the part of the
Company or the Bank in the due performance and observance of any term, covenant
or condition of any agreement which is material to the condition (financial or
otherwise), results of operations or business of the Company or the Bank, taken
as a whole; said agreements are in full force and effect, and no other party to
any such agreement which is material to the Company and the Bank, taken as a
whole, has instituted or, to the best knowledge of the Company or the Bank,
threatened any action or proceeding wherein the Company or the Bank would or
might be alleged to be in default thereunder.
(n) Neither the Company nor the Bank is in violation of its
respective certificate of incorporation, charter or bylaws or in default in the
performance of any obligation, agreement or condition contained in any bond,
debenture, note or any other evidence or indebtedness which default is material
to the condition (financial or otherwise), results of operations or business of
the Company and the Bank taken as a whole. The execution and delivery hereof,
the fulfillment of the
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terms set forth herein and the consummation of the transactions contemplated
hereby shall not: (1) violate or conflict with the respective certificate of
incorporation, charter or bylaws of the Company or the Bank; (ii) violate,
conflict with or constitute a breach of, or default (or an event which, with
notice or lapse of time, or both, would constitute a default) under, any
material agreement, indenture or other instrument by which either the Company or
the Bank is bound, or under any governmental license or permit; violate,
conflict with, or constitute a breach of any law, administrative regulation or
authorization, approval, order, court decree, injunction or order (subject to
the satisfaction of certain conditions imposed by the Office in connection with
its approval of the Form AC and the Application H-(e)1-S), or (iv) result in the
creation of any lien, charge, or encumbrance upon any property of the Company or
Bank, which would individually or in the aggregate have a material adverse
effect on the financial condition, results of operations, or assets and
properties of the Company and the Bank taken as a whole.
(o) Subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus, except as otherwise may
be indicated or contemplated therein, neither the Company nor the Bank has
issued any securities which will remain issued at the Closing Date or incurred
any liability or obligation, direct or contingent, for borrowed money, except
borrowings in the ordinary course of business, or entered into any other
transaction not in the ordinary course of business and consistent with prior
practices which is material in light of the business of the Company and the
Bank, taken as a whole.
(p) Upon consummation of the Conversion, the authorized, issued
and outstanding equity capital of the Company shall be within the range as set
forth in the Prospectus under the caption "Capitalization," and no capital stock
of the Company shall be outstanding immediately prior to the Closing Date; the
issuance and the sale of the Shares has been duly authorized by all necessary
action of the Company and approved by the Office and, when issued in accordance
with the terms of the Plan and paid for, shall be validly issued, fully paid and
nonassessable and shall conform to the description thereof contained in the
Prospectus; the issuance of the Shares is not subject to preemptive rights; and
good title to the Shares will be transferred upon issuance thereof against
payment therefor subject to such claims as may be asserted against the
purchasers thereof by third party claimants. The certificates representing the
Shares will conform with the requirements of applicable laws and regulations.
The issuance and sale of the capital stock of the Bank to the Company has been
duly authorized by all necessary action of the Bank and the Company and
appropriate regulatory authorities (subject to the satisfaction of various
conditions imposed by the Office in connection with its approval of the Form H-
(e)1-S and the Form AC), and such capital stock, when issued in accordance with
the terms of the Plan, will be fully paid and nonassessable and will conform to
the description thereof contained in the Prospectus.
(q) No approval of any regulatory or supervisory or other public
authority is required in connection with the execution and delivery of this
Agreement or the issuance of the Shares, except for the declaration of
effectiveness of any required post-effective amendment to the Registration
Statement by the Commission and approval thereof by the Office and approval of
the
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Company's application on Form H-(e)1-S by the Office, the issuance of the Stock
Charter by the Office and as may be required under the securities laws of
various jurisdictions.
(r) All contracts and other documents required to be filed as
exhibits to the Registration Statement or the Conversion Application have been
filed with the Commission and/or the Office, as the case may be.
(s) York, Xxxx & Co. - Hopkinsville, LLP, which has audited the
financial statements of the Bank as of December 31, 1996 and 1995, and for each
of the years in the three year period ended December 31, 1996, all of which are
included in the Prospectus, are independent public accountants within the
meaning of the Code of Professional Ethics of the American Institute of
Certified Public Accountants and Title 12 of the Code of Federal Regulations,
Section 571.2(c)(3).
(t) National Capital Group, Inc., which prepared an appraisal of
the estimated pro forma market value of the Shares filed as an exhibit to the
Registration Statement and the Form AC, is independent with respect to the
Company and the Bank and has qualified as being experienced and expert in
corporate appraisals within the meaning of the Office's conversion regulations.
(u) The Company and the Bank have timely filed all required
federal, state and local franchise tax returns, and no deficiency has been
asserted with respect to such returns by any taxing authorities, and the Company
and the Bank have paid all taxes that have become due and, to the best of their
knowledge, have made adequate reserves for similar future tax liabilities.
(v) The records of account holders, depositors, borrowers and
other members of the Bank delivered to the Agents by the Bank or its agent for
use during the Conversion have been prepared or reviewed by the Bank and are
reliable and accurate.
(w) Neither the Company nor the Bank, or, to the knowledge of the
Company and the Bank, the employees of the Company and the Bank, has made any
payment of funds of the Company or the Bank as a loan for the purchase of
Shares, and no funds of the Company or the Bank have been set aside to be used
for any payment prohibited by law.
(x) The Company and the Bank are in compliance with all laws,
rules and regulations applicable to the conduct of their business, except for
violations which, if asserted, would not have a material adverse effect on the
Company and the Bank, taken as a whole. There are no actions, suits, regulatory
investigations or other proceedings pending or, to the best knowledge of the
Company or the Bank, threatened against the Company or the Bank, except for
those occurring in the ordinary course of business which, if decided adversely
to the Company or the Bank, would not have a material adverse effect on the
Company and the Bank, taken as a whole.
(y) At the Closing Date, the Company and the Bank will have
completed the conditions precedent to, and shall have conducted the Conversion
in all material respects in accordance with, the Plan, the Office's conversion
regulations and all other applicable laws,
7
regulations, decisions and orders, and all terms, conditions, requirements and
provisions relating to the Conversion imposed by the Office have been or, with
respect to any future Office conditions, will be complied with by the Company
and the Bank in all material respects or appropriate waivers have been or will
be obtained.
3. Employment of the Agents; Sale and Delivery of the Shares. On the
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basis of the representations and warranties herein contained, but subject to the
terms and conditions herein set forth, the Company and the Bank hereby employ
the Agents as their agents to utilize their best efforts in assisting the
Company with the Company's sale of the Shares in the Subscription Offering and
Community Offering. The employment of the Agents hereunder shall terminate (a)
upon termination or abandonment of the Plan by the Company or the Bank, (b)
forty-five (45) days after the Offerings close, unless the Company and the Bank,
with the approval of the Office, are permitted to extend such period of time, or
(c) upon consummation of the Conversion, whichever date shall first occur.
In the event the Company is unable to sell a minimum of 2,040,000
Shares (or such lesser amount as the Office may permit) within the period herein
provided, this Agreement shall terminate, and the Company and the Bank shall
refund promptly to any persons who have subscribed for any of the Shares, the
full amount which it may have received from them, together with interest as
provided in the Prospectus, and no party to this Agreement shall have any
obligation to the other party hereunder, except as set forth in Sections 6, 8(a)
and 9 hereof.
Appropriate arrangements for placing the funds received from
subscriptions for Shares in segregated interest-bearing accounts with the Bank
until all Shares are sold and paid for were made prior to the commencement of
the Subscription and Community Offerings, with provision for prompt refund to
the purchasers as set forth above, or for delivery to the Company if all Shares
are sold.
If all conditions precedent to the consummation of the Conversion are
satisfied, including the sale of all Shares required by the Plan to be sold, the
Company agrees to issue or have issued such Shares and to release for delivery
certificates to subscribers thereof for such Shares on the Closing Date against
payment to the Company by any means authorized pursuant to the Prospectus, at
the principal office of the Company at 0000 Xxxx Xxxxxxxx Xxxxxxxxx,
Xxxxxxxxxxxx, Xxxxxxxx 00000, or at such other place as shall be agreed upon
between the parties hereto. The date upon which the Agents are paid the
compensation due hereunder is herein called the "Closing Date."
The Agents shall receive the following compensation for their services
hereunder:
(a) A non-refundable advisory fee of $25,000;
(b) A sales fee of $155,000 payable upon consummation of the
Offerings; and
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(c) The Agents shall be reimbursed for reasonable expenses
incurred by them, including legal fees, which expenses are not to exceed $45,000
whether or not the Offerings are consummated. Full payment to defray the Agents'
reimbursable expenses shall be made in next-day funds on the Closing Date or, if
the Conversion is not completed and is terminated for any reason, within 10
business days of receipt by the Company of a written request from IBS or FBR for
reimbursement of their expenses.
The Company shall pay any stock issue and transfer taxes which may be
payable with respect to the sale of the Shares. The Company and the Bank shall
also pay all other expenses of the Conversion, including but not limited to the
Company's and the Bank's attorneys' fees and expenses, NASD filing fees, filing
and registration fees, telephone charges, air freight, rental equipment,
supplies, transfer agent charges, fees relating to auditing and accounting and
costs of printing all documents necessary in connection with the Conversion.
4. Offering. Subject to the provisions of Section 7 hereof, the
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Agents are assisting the Company on a best efforts basis in offering a minimum
of 2,040,000 and a maximum of 2,760,000 Shares, with the possibility of offering
up to 3,174,000 Shares (except as the Office may permit to be decreased or
increased). The Shares are to be offered to the public at the price set forth on
the cover page of the Prospectus and the first page of this Agreement.
5.1. Further Agreements. The Company and the Bank jointly and severally
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covenant and agree that:
(a) The Company shall deliver to the Agents, from time to time,
such number of copies of the Prospectus as the Agents reasonably may request.
The Company authorizes the Agents to use the Prospectus in any lawful manner in
connection with the offer and sale of the Shares. The Company shall deliver to
the Agents a copy of the Registration Statement and the Conversion Application
(including exhibits) and, following effectiveness, of all post-effective
amendments thereto.
(b) The Company will notify the Agents immediately upon
discovery, and confirm the notice in writing, (i) when any post-effective
amendment to the Registration Statement becomes effective or any supplement to
the Prospectus has been filed, (ii) of the issuance by the Commission of any
stop order relating to the Registration Statement or of the initiation or the
threat of any proceedings for that purpose, (iii) of the receipt of any notice
with respect to the suspension of the qualification of the Shares for offering
or sale in any jurisdiction, and (iv) of the receipt of any comments from the
staff of the Commission relating to the Registration Statement. If the
Commission enters a stop order relating to the Registration Statement at any
time, the Company will make every reasonable effort to obtain the lifting of
such order at the earliest possible moment.
(c) During the time when a prospectus is required to be delivered
under the Act, the Company will comply so far as it is able with all
requirements imposed upon it by the Act, as now in effect and hereafter amended,
and by the Regulations, as from time to time in force, so far
9
as necessary to permit the continuance of offers and sales of or dealings in the
Shares in accordance with the provisions hereof and the Prospectus. If during
the period when the Prospectus is required to be delivered in connection with
the offer and sale of the Shares any event relating to or affecting the Company
and the Bank, taken as a whole, shall occur as a result of which it is
necessary, in the reasonable opinion of counsel for the Agents, with the
concurrence of counsel to the Company, to amend or supplement the Prospectus in
order to make the Prospectus not false or misleading in light of the
circumstances existing at the time it is delivered to a purchaser of the Shares,
the Company forthwith shall prepare and furnish to the Agents a reasonable
number of copies of an amendment or amendments or of a supplement or supplements
to the Prospectus (in form and substance satisfactory to counsel for the Agents)
which shall amend or supplement the Prospectus so that, as amended or
supplemented, the Prospectus shall not contain an untrue statement of a material
fact or omit to state a material fact necessary in order to make the statements
therein, in light of the circumstances existing at the time the Prospectus is
delivered to a purchaser of the Shares, not misleading. The Company will not
file or use any amendment or supplement to the Registration Statement or the
Prospectus of which the Agents have not first been furnished a copy or to which
the Agents shall reasonably object after having been furnished such copy. For
the purposes of this subsection the Company and the Bank shall furnish such
information with respect to themselves as the Agents from time to time may
reasonably request.
(d) The Company and the Bank have taken or will take all
reasonably necessary action and furnish to whomever the Agents may reasonably
direct, such information as may be required to qualify or register the Shares
for offer and sale by the Company under the securities or blue sky laws of such
jurisdictions as the Agents and either the Company or its counsel may agree
upon; provided, however, that the Company shall not be obligated to qualify as a
foreign corporation to do business under the laws of any such jurisdiction. In
each jurisdiction where such qualification or registration shall be effected,
the Company, unless the Agents agree that such action is not necessary or
advisable in connection with the distribution of the Shares, shall file and make
such statements or reports as are, or reasonably may be, required by the laws of
such jurisdiction.
(e) Appropriate entries will be made in the financial records of
the Bank sufficient to establish a liquidation account for the benefit of
eligible account holders and supplemental eligible account holders in accordance
with the requirements of the Office.
(f) The Company will file a registration statement for the Common
Stock under Section 12(g) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), prior to completion of the Conversion and shall request
that such registration statement be effective upon completion of the Conversion.
The Company shall maintain the effectiveness of such registration for a minimum
period of three years or for such shorter period as may be required by the
Office's approval of the Form AC in accordance with applicable law.
(g) The Company will make generally available to its security
holders as soon as practicable, but not later than 90 days after the close of
the period covered thereby, an earnings statement (in form complying with the
provisions of Rule 158 of the Regulations promulgated under
10
the Act) covering a twelve-month period beginning not later than the first day
of the Company's fiscal quarter next following the effective date (as defined in
said Rule 158) of the Registration Statement.
(h) During the period in which the Company's common stock is
registered under the Exchange Act or for a period of three (3) years from the
date of this Agreement, whichever period is shorter, the Company will furnish to
the Agents, as soon as publicly available after the end of each fiscal year, a
copy of its annual report to shareholders for such year; and the Company will
furnish to the Agents (i) as soon as publicly available, a copy of each report
or definitive proxy statement of the Company filed with the Commission under the
Exchange Act or mailed to shareholders, and (ii) from time to time, such other
public information concerning the Company as the Agents may reasonably request.
(i) The Company shall use the net proceeds from the sale of the
Shares consistently with the manner set forth in the Prospectus as described
under the Prospectus caption "Use of Proceeds."
(j) The Company shall not deliver the Shares until each and every
condition set forth in Section 7 hereof has been satisfied, unless such
condition is waived in writing by the Agents.
(k) The Company shall advise the Agents, if necessary, as to the
allocation of deposits, in the case of eligible account holders, and votes, in
the case of other members, and of the Shares in the event of an oversubscription
and shall provide the Agents final instructions as to the allocation of the
Shares in writing ("Allocation Instructions") in such event and such information
shall be accurate and reliable. The Agents shall be entitled to rely on such
written instructions and shall have no liability in respect of their reliance
thereon, including without limitation, no liability for or related to any denial
or grant of a subscription in whole or in part.
(l) The Company and the Bank will take such actions and furnish
such information as are reasonably requested by the Agents in order for the
Agents to ensure compliance with the NASD's "Interpretation Relating to Free-
Riding and Withholding."
6. Payment of Expenses. Whether or not the Conversion is
-------------------
consummated, the Company and the Bank shall pay or reimburse the Agents for (a)
all filing fees paid or incurred by the Agents in connection with all filings
with the NASD and, (b) in addition, if the Company is unable to sell a minimum
of 2,040,000 Shares or such lesser amount as the Office may permit or the
Conversion is otherwise terminated, the Company and the Bank shall reimburse the
Agents for allocable expenses incurred by the Agents relating to the offering of
the Shares as provided in Section 3 hereof.
7. Conditions of the Agents' Obligations. Except as may be waived by
-------------------------------------
the Agents, the obligations of the Agents as provided herein shall be subject to
the accuracy of the representations and warranties contained in Section 2 hereof
as of the date hereof and as of the Closing Date, to the
11
performance by the Company and the Bank of their obligations hereunder and to
the following conditions:
(a) At the Closing Date, the Agents shall receive the favorable
opinion of Reinhart, Boerner, Van Dewren, Xxxxxx & Xxxxxxxxxx, P.C., special
counsel for the Company and the Bank, dated the Closing Date, addressed to the
Agents with respect to the treatment under applicable law of the Bank's past and
present practice concerning the changing of interest on loans and recent
corrective actions with respect thereto, in form and substance reasonably
satisfactory to counsel for the Agents and also to the effect that:
(i) the Company has been duly organized and is validly
existing as a corporation in good standing under the
laws of Delaware; the Bank has been organized and is
validly existing as a mutual savings bank under the
laws of the United States; upon consummation of
Conversion, the Bank will be duly organized and validly
existing as a federal stock savings bank; each of the
Company and the Bank has, and the converted Bank will
have, full power and authority to own its properties
and conduct its business as described in the
Prospectus;
(ii) each of the Company and the Bank has been duly
qualified to do business and is in good standing as a
foreign corporation in each jurisdiction where the
ownership or leasing of its properties or the conduct
of its business requires such qualification, unless the
failure to be so qualified or in good standing in one
or more of such jurisdictions would not have any
material adverse effect on the Company and the Bank,
taken as a whole;
(iii) the Bank is a member of the FHLB of Cincinnati, the
deposit accounts of the Bank are insured by the SAIF up
to the applicable limits, and no proceedings for the
termination or revocation of such insurance are pending
or, to such counsel's actual knowledge, threatened;
(iv) the activities of the Bank are permitted under federal
law to subsidiaries of a federal savings and loan
holding company and the Bank has no subsidiaries;
(v) the Bank has obtained all licenses, permits and other
governmental authorizations required for the conduct of
its business, except where the failure to hold such
licenses, permits or governmental authorizations would
not have a material adverse effect on the Company and
the Bank, taken as a whole, and all such licenses,
12
permits and other governmental authorizations are in
full force and effect and the Bank is in all material
respects complying therewith;
(vi) the Plan complies in all material respects with, and
the Conversion of the Bank from a federally chartered
mutual savings bank to a federally chartered stock
savings bank and the creation of the Company as a
holding company for the Bank have been effected in all
material respects in accordance with all applicable
federal laws, rules, regulations, decisions and orders
(except for federal and state securities laws); to
such counsel's actual knowledge, all of the terms,
conditions, requirements and provisions with respect
to the Plan and the Conversion imposed by the Office,
except with respect to satisfaction of the post-
Conversion conditions imposed by the Office in its
approvals of the Conversion and the Application
H-(e)1-S, have been complied with by the Company and
the Bank in all material respects; and, to such
counsel's actual knowledge, no person has sought to
obtain regulatory or judicial review of the final
actions of the Office in approving the Plan;
(vii) as of the Closing Date, the Company and the Bank have
authorized capital stock as set forth in the
Registration Statement and the Prospectus, and the
descriptions of such stock in the Registration
Statement and Prospectus are accurate and complete in
all material respects;
(viii) the issuance and sale of the Shares have been duly and
validly authorized by all necessary corporate action
on the part of the Company and have received all
requisite regulatory approval; the Shares, upon
receipt of payment and issuance in accordance with the
terms of the Plan and this Agreement, will be validly
issued, fully paid, nonassessable and free of
preemptive rights, and to such counsel's actual
knowledge, purchasers of the Shares from the Company,
upon issuance thereof against payment therefor, will
acquire good title to such Shares from the Company,
free and clear of all claims, encumbrances, security
interests and liens whatsoever created or suffered to
be created by the Company;
(ix) the certificates for the Shares are in due and proper
form and comply with applicable law;
(x) the issuance and sale of the capital stock of the Bank
to the Company have been duly authorized by all
necessary action of the Bank and the Company and have
received the approval of the
13
office, and such capital stock, upon receipt of
payment and issuance in accordance with the terms of
the Plan, will be validly issued, fully paid and
nonassessable and owned of record and, to such
counsel's actual knowledge, beneficially by the
Company;
(xi) subject to the satisfaction of the conditions to the
Office's approval of the Conversion, no further
approval, authorization, consent or other order of any
public board or body is required in connection with
the execution and delivery of this Agreement, the
issuance of the Shares and the consummation of the
Conversion, except as may be required under the
securities or blue sky laws of various jurisdictions
(as to which no opinion need be rendered) and except
as may be required under the rules and regulations of
the NASD;
(xii) the execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby
have been duly and validly authorized by all necessary
action on the part of each of the Company and the
Bank; and this Agreement is a legal, valid and binding
obligation of each of the Company and the Bank,
enforceable in accordance with its terms, except as
the enforceability thereof may be limited by
bankruptcy, insolvency, moratorium, reorganization,
receivership, conservatorship or similar laws relating
to or affecting the enforcement of creditors' rights
generally or the rights of creditors of savings and
loan holding companies, including the laws relating to
the appointment of a receiver or conservator or the
rights or powers of the Office or the FDIC, or by
general equity principles, regardless of whether such
enforceability is considered in a proceeding in equity
or at law, and except to the extent that the
provisions of Sections 8 and 9 hereof may be
unenforceable as against public policy, as to which no
opinion need be rendered;
(xiii) there is no material legal, investigation, regulatory,
administrative or governmental investigation, action,
suit or proceeding pending or, to such counsel's
actual knowledge, threatened against or involving the
assets of the Company or the Bank, except as described
in the Prospectus;
(xiv) the statements in the Prospectus under the captions
"Regulation," "Taxation," "Capitalization," "Dividend
Policy," "Certain Restrictions on Acquisition of the
Company and the Bank," "Certain Anti-takeover
Provisions in the Certificate of Incorporation and
Bylaws," "Description of Capital Stock,"
14
"Registration Requirements" and "The Conversion", and
in response to Item 7(d)(1) of Form PS of the Office's
conversion regulations, insofar as they are, or refer
to, statements of federal law or legal conclusions,
have been prepared or reviewed by such counsel and are
correct in all material respects;
(xv) the Form AC has been approved by the Office, and the
Prospectus has been authorized for use by the Office;
the Registration Statement and any post effective
amendment thereto has been declared effective by the
Commission; the Office has issued its approvals, and,
except as to any necessary qualifications or
registration under the securities laws of the
jurisdictions in which the Shares were offered, no
further approval of any governmental authority is
required for the issuance and sale of the Shares, and
no proceedings are pending by or before the Commission
or the Office seeking to revoke or rescind the orders
declaring the Registration Statement effective or
approving the Conversion Application, nor, to such
counsel's actual knowledge, are any such proceedings
contemplated or threatened (provided that for this
purpose such counsel need not regard any litigation or
governmental procedure to be "threatened" unless the
potential litigant or government authority has
manifested to the management of the Company or the
Bank, or to such counsel, a present intention to
initiate such litigation or proceeding);
(xvi) the execution and delivery of this Agreement, the
incurrence of the obligations herein set forth and the
consummation of the transactions contemplated hereby
by the Company and the Bank shall not conflict with or
result in a breach of the certificate of incorporation
or charter or bylaws of the Company or the Bank (in
either mutual or stock form), nor, to such counsel's
actual knowledge, constitute a material breach of or
default (or an event which, with notice or lapse of
time or both, would constitute a default) under, give
rise to any right of termination, cancellation or
acceleration contained in, or result in the creation
or imposition of any lien, charge or other encumbrance
upon any of the properties or assets of the Company or
the Bank (other than the establishment of the
liquidation account) pursuant to any of the terms,
provisions or conditions of, any agreement, contract,
indenture, bond, debenture, note, instrument or
obligation to which the Company or the Bank is a party
or by which it or its assets or properties may be
bound or is subject, or violate any governmental
license or permit, any applicable law, administrative
regulation or order or court
15
order, writ, injunction or decree (subject to the
satisfaction of certain conditions imposed by the
Office in connection with its approval of the Form H-
(e)1-S and the Form AC), which breach, default,
encumbrance or violation would have a material
adverse effect on the condition (financial or
otherwise), operations, business, assets or
properties of the Company and the Bank taken as a
whole.
(xvii) to such counsel's actual knowledge, there has been no
breach of the Company's or the Bank's certificate of
incorporation, charter or bylaws, or breach or
default (or the occurrence of any event which, with
the lapse of time or action, or both, by a third
party, would result in a breach or a default) under
any agreement, contract, indenture, bond, debenture,
note, instrument or obligation to which the Company
or the Bank is a party or by which any of them or any
of their respective assets or properties may be
bound, or any governmental license or permit, or a
violation of any published law, administrative
regulation or order, or court order, writ, injunction
or decree, which breach, default, encumbrance or
violation would have a material adverse effect on the
condition (financial or otherwise), operations,
business, assets or properties of the Company and the
Bank, taken as a whole;
(xviii) the Conversion Application, the Registration
Statement and the Prospectus, in each case as
amended, comply as to form in all material respects
with the requirements of the Act and all rules,
regulations, decisions and orders of the Office and
Commission, as the case may be (except as to
financial statements, notes to financial statements,
financial tables and other financial and statistical
data, including the appraisal and stock valuation
information, included therein, as to which an opinion
need not be expressed); to such counsel's actual
knowledge, all documents and exhibits required to be
filed with the Conversion Application and the
Registration Statement have been so filed; the
descriptions in the Conversion Application and the
Registration Statement of such documents and exhibits
are accurate in all material respects and present
fairly the information required to be shown.
(xix) the Company and the Bank have good and marketable
title to all real and personal properties and assets
described in the Prospectus as owned by them and
material to their respective businesses, free and
clear of all liens, charges, encumbrances, claims,
security interests, defects or restrictions, except
(A) such
16
as do not materially adversely affect the value of
such properties and assets and do not interfere with
the use made or proposed to be made of such
properties and assets by the Company or the Bank and
(B) such as are described in the Prospectus; and the
real and personal property held by the Company or the
Bank under lease or sublease is held by them under
valid, subsisting and enforceable leases or
subleases, and the Company and the Bank, as the case
may be, have the peaceful and undisturbed right to
use and possession of the real or personal property
held by them under lease or sublease.
In rendering such opinion, counsel may rely as to matters of fact on
certificates of officers and directors of the Company and the Bank and
certificates of public officials delivered pursuant hereto. Such counsel's
opinion shall be limited to matters governed by federal laws and by the Delaware
General Corporate Law, as amended.
(b) At the Closing Date, the Agents shall receive the letter of
Reinhart, Boerner, Van Dewren, Xxxxxx & Xxxxxxxxxx, P.C., special counsel for
the Company and the Bank, dated the Closing Date, addressed to the Agents, in
form and substance reasonably satisfactory to counsel for the Agents and to the
effect that: in connection with the preparation of the Registration Statement
and Prospectus, such counsel participated in conferences with directors,
officers, employees and other representatives of the Company and the Bank and
representatives of the independent public accountants for the Company and the
Bank at which conferences the contents of the Registration Statement and the
Prospectus and related matters were discussed and, while such counsel have not
confirmed the accuracy or completeness of or otherwise verified the information
contained in the Registration Statement or the Prospectus, nothing has come to
such counsel's attention that would lead such counsel to believe that the
Registration Statement (except as to financial statements, notes to financial
statements, financial tables and other financial and statistical data and stock
valuation information contained therein with respect to which such counsel need
not express an opinion), at the time it became effective and at the time any
post-effective amendment thereto became effective, contained any untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements made therein not misleading,
or that the Prospectus (except as to financial statements, notes to financial
statements, financial tables and other financial and statistical data and stock
valuation information contained therein with respect to which such counsel need
not express an opinion), at the time the Registration Statement became effective
or at the time any amendment or supplement to the Prospectus was filed with the
Commission or transmitted to the Commission for filing or on the Closing Date,
contained any untrue statement of a material fact or omitted to state a material
fact necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading.
(c) Counsel for the Agents shall have been furnished such
documents and opinions as they reasonably may require for the purpose of
enabling them to review or pass upon the matters required by the Agents, and for
the purpose of evidencing the accuracy, completeness or
17
satisfaction of any of the representations, warranties or conditions herein
contained, including but not limited to, resolutions of the Board of Directors
of the Company and the Bank regarding the authorization of this Agreement and
the transactions contemplated hereby.
(d) Prior to and at the Closing Date, in the reasonable opinion
of the Agents, (i) there shall have been no material change in the condition,
financial or otherwise, business or results of operations of the Company and the
Bank, taken as a whole, since the latest date as of which such condition is set
forth in the Prospectus, except as referred to therein; (ii) there shall have
been no transaction entered into by the Company or the Bank after the latest
date as of which the consolidated financial condition of the Company is set
forth in the Prospectus other than transactions referred to or contemplated
therein, transactions in the ordinary course of business, and transactions which
are not material to the Company and the Bank, taken as a whole; (iii) none of
the Company or the Bank shall have received from the Office or Commission any
direction (oral or written) to make any change in the method of conducting their
respective businesses which is material to the business of the Company and the
Bank, taken as a whole, with which they have not complied; (iv) no action, suit
or proceeding, at law or in equity or before or by any federal or state
commission, board or other administrative agency, shall be pending or threatened
against the Company or the Bank or affecting any of their respective assets,
wherein an unfavorable decision, ruling or finding would have a material adverse
effect on the business, operations, financial condition or income of the Company
and the Bank, taken as a whole; (v) the Shares shall have been qualified or
registered for offering and sale by the Company under the securities or blue sky
laws of such jurisdictions as the Agents and the Company shall have agreed upon;
and (vi) neither the Company nor the bank shall have been in default (nor shall
an event have occurred which, with notice or lapse of time or both, would
constitute a default) under any provision of any agreement or instrument
relating to any outstanding indebtedness.
(e) At the Closing Date, the Agents shall receive a certificate
of the President and the principal financial officer of each of the Company and
the Bank, dated the Closing Date, to the effect that: (i) they have carefully
examined the Prospectus, and, in their opinion, at the time the Prospectus
became authorized for final use, the Prospectus did not contain an untrue
statement of a material fact or omit to state a material fact necessary in order
to make the statements therein, in light of the circumstances under which they
were made, not misleading with respect to the Company or the Bank; (ii) since
the date the Prospectus became authorized for final use, no event has occurred
which should have been set forth in an amendment or supplement to the Prospectus
which has not been so set forth, including specifically, but without limitation,
any material change in the business, condition (financial or otherwise) or
results of operations of the Company or the Bank and, the conditions set forth
in clauses (ii) through (iv) inclusive of subsection (d) of this Section 7 have
been satisfied; (iii) to the best knowledge of such officers, no order has been
issued by the Commission or the Office to suspend the Subscription Offering or
the Community Offering or the effectiveness of the Prospectus, and no action for
such purposes has been instituted or threatened by the Commission or the Office;
(iv) to the best knowledge of such officers, no person has sought to obtain
review of the final actions of the Office and division approving the Plan; and
(v) all of the
18
representations and warranties contained in Section 2 of this Agreement are true
and correct, with the same force and effect as though expressly made on the
Closing Date.
(f) At the Closing Date, the Agents shall receive, among other
documents, (i) copies of the letters from the Office authorizing the use of the
Prospectus and the Proxy Statement, (ii) a copy of the order of the Commission
declaring the Registration Statement effective; (iii) copies of the letters from
the Office evidencing the corporate existence of the Bank; (iv) a copy of the
letter from the appropriate Delaware authority evidencing the good standing of
the Company; (v) a copy of the Company's certificate of incorporation certified
by the appropriate Delaware governmental authority; and (vi) a copy of the
letter from the Office approving the Bank's Stock Charter.
(g) As soon as available after the Closing Date, the Agents shall
receive a certified copy of the Bank's Stock Charter executed by the appropriate
federal governmental authority.
(h) Concurrently with the execution of this Agreement, the Agents
shall receive a letter from York, Xxxx & Co. - Hopkinsville, LLP, independent
certified public accountants, dated the date hereof and addressed to the Agents,
in substance and form satisfactory to counsel for the Agents, with respect to
the financial statements and certain financial information contained in the
Prospectus.
(i) At the Closing Date, the Agents shall receive a letter in
form and substance satisfactory to counsel for the Agents from York, Xxxx & Co.
- Hopkinsville, LLP, independent certified public accountants, dated the Closing
Date and addressed to the Agents, confirming the statements made by them in the
letter delivered by them pursuant to the preceding subsection as of a specified
date not more than five (5) days prior to the Closing Date.
(j) At the Closing Date, the Agents shall have received a letter
from National Capital Group, Inc., dated the date of delivery, confirming the
results of their appraisal, that the appraisal conforms to the requirements of
the Office and that they are independent with respect to the Company and the
Bank and within the requirements of the Office's conversion regulations.
All such opinions, certificates, letters and documents shall be in
compliance with the provisions hereof only if they are, in the reasonable
opinion of the Agents and their counsel, satisfactory to the Agents and their
counsel. Any certificates signed by an officer or director of the Company or the
Bank prepared for the Agents' reliance and delivered to the Agents or to counsel
for the Agents shall be deemed a representation and warranty by the Company and
the Bank to the Agents as to the statements made thereby. If any condition to
the Agents' obligations hereunder to be fulfilled prior to or at the Closing
Date is not so fulfilled, the Agents may terminate this Agreement or, if the
Agents so elect, may waive any such conditions which have not been fulfilled, or
may extend the time of their fulfillment. If the Agents terminate this
Agreement as aforesaid, the Company and the Bank shall reimburse the Agents for
their expenses as provided in Section 3(b) hereof;
19
8. Indemnification.
---------------
(a) The Company and the Bank joint and severally agree to
indemnify and hold harmless the Agents, their officers, directors, employees and
each person, if any, who controls the Agents within the meaning of Section 15 of
the Act or Section 20(a) of the Exchange Act, against any and all loss,
liability, claim, damage and expense whatsoever and shall further promptly
reimburse such persons for any legal or other expenses reasonably incurred by
each or any of them in investigating, preparing to defend or defending against
any such action, proceeding or claim (whether commenced or threatened ) arising
out of or based upon any misrepresentation by the Company or the Bank in this
Agreement or any breach of warranty by the Company or the Bank with respect to
this Agreement or arising out of or based upon any untrue or alleged untrue
statement of a material fact or the omission or alleged omission of a material
fact required to be stated or necessary to make not misleading any statements
contained in (i) the Registration Statement or the Prospectus or (ii) any
application (including the Form AC and the Form H-(e)l-S) or other document or
communication (in this Section 8 collectively called "Application") prepared or
executed by or on behalf of the Company or the Bank or based upon written
information furnished by or on behalf of the Company or the Bank, with its
consent, whether or not filed in any jurisdiction, to effect the Conversion or
qualify the Shares under the securities laws thereof or filed with the Office or
Commission, unless such statement or omission was made in reliance upon and in
conformity with written information furnished to the Company or the Bank with
respect to the Agents by or on behalf of the Agents expressly for use in the
Prospectus or any amendment or supplement thereof or in any Application, as the
case may be. This indemnity shall be in addition to any liability the Company
and the Bank may have to the Agents otherwise.
(b) The Company shall indemnify and hold the Agents harmless for
any liability whatsoever arising out of (i) the Allocation Instructions or (ii)
any records of account holders, depositors, borrowers and other members of the
Bank delivered to the Agents by the Bank or its agents for use during the
Conversion.
(c) The Agents agree to indemnify and hold harmless the Company,
the Bank, their directors, officers and employees and each person, if any, who
controls the Company and the Bank within the meaning of Section 15 of the Act or
Section 20(a) of the Exchange Act, to the same extent as the foregoing indemnity
from the Company and the Bank to the Agents, but only with respect to statements
or omissions, if any, made in the Prospectus or any amendment or supplement
thereof, in any Application or to a purchaser of the Shares in reliance upon,
and in conformity with, written information furnished to the Company or the Bank
with respect to the Agents by or on behalf of the Agents expressly for use in
the Prospectus or in any Application.
(d) Promptly after receipt by an indemnified party under this
Section 8 of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying party
under this Section 8, notify the indemnifying party of the commencement thereof;
but the omission so to notify the indemnifying party will not relieve it from
any liability which it may have to any indemnified party otherwise than under
this Section 8. In case
20
any such action is brought against any indemnified party, and it notifies the
indemnifying party of the commencement thereof, the indemnifying party will be
entitled to participate therein and, to the extent that it may wish, jointly
with the other indemnifying party similarly notified, to assume the defense
thereof, with counsel satisfactory to such indemnified party, and after notice
from the indemnifying party to such indemnified party of its election so to
assume the defense thereof, the indemnifying party will not be liable to such
indemnified party under this Section 8 for any legal or other expenses
subsequently incurred by such indemnified party in connection with the defense
thereof other than the reasonable cost of investigation except as otherwise
provided herein. In the event the indemnifying party elects to assume the
defense of any such action and retain counsel acceptable to the indemnified
party, the indemnified party may retain additional counsel, but shall bear the
fees and expenses of such counsel unless (i) the indemnifying party shall have
specifically authorized the indemnified party to retain such counsel or (ii) the
parties to such suit include such indemnifying party and the indemnified party,
and such indemnified party shall have been advised by counsel that one or more
material legal defenses may be available to the indemnified party which may not
be available to the indemnifying party, in which case the indemnifying party
shall not be entitled to assume the defense of such suit notwithstanding the
indemnifying party's obligation to bear the fees and expenses of such counsel.
An indemnifying party against whom indemnity may be sought shall not be liable
to indemnify an indemnified party under this Section 8 if any settlement of any
such action is effected without such indemnifying party's consent.
9. Contribution. In order to provide for just and equitable
------------
contribution in circumstances in which the indemnity agreement provided for in
Section 8 above is for any reason held to be unavailable to the Agents other
than in accordance with its terms, the Company or the Bank and the Agents shall
contribute to the aggregate losses, liabilities, claims, damages, and expenses
of the nature contemplated by said indemnity agreement incurred by the Company
or the Bank and the Agents (i) in such proportion as is appropriate to reflect
the relative benefits received by the Company and the Bank on the one hand and
the Agents on the other from the offering of the Shares or (ii) 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 or
the Bank on the one hand and the Agents on the other hand in connection with the
statements or omissions which resulted in such losses, claims, damages,
liabilities or judgments, as well as any other relevant equitable
considerations. The relative benefits received by the Company and the Bank on
the one hand and the Agents on the other shall be deemed to be in the same
proportions as the total proceeds from the Conversion (before deducting
expenses) received by the Company and the Bank bear to the total fees received
by the Agents under this Agreement. The relative fault of the Company and the
Bank on the one hand and the Agents on the other shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company or the Bank or by the Agents and
the parties' relative intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission.
21
The Company and the Bank and the Agents 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 the immediately preceding
paragraph. The amount paid or payable by an indemnified party as a result of the
losses, claims, damages, liabilities or judgments referred to in the immediately
preceding paragraph shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses reasonably incurred by an indemnified
party in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 9, the Agents shall not be
required to contribute any amount in excess of the amount by which fees owed the
Agents pursuant to this Agreement exceeds the amount of any damages which the
Agents have otherwise been required to pay by reason of such untrue or alleged
untrue statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who is not guilty of such fraudulent
misrepresentation.
10. Survival of Agreements, Representations and Indemnities. The
-------------------------------------------------------
respective indemnities of the Company and the Bank and the Agents and the
representations and warranties of the Company, the Bank and the Agents set forth
in or made pursuant to this Agreement shall remain in full force and effect,
regardless of any termination or cancellation of this Agreement or any
investigation made by or on behalf of the Agents or the Company or the Bank or
any controlling person or indemnified party referred to in Section 8 hereof, and
shall survive any termination or consummation of this Agreement and/or the
issuance of the Shares, and any legal representative of The Agents, the Company,
the Bank and any such controlling persons shall be entitled to the benefit of
the respective agreements, indemnities, warranties and representations.
11. Termination. The Agents may terminate this Agreement by giving
-----------
the notice indicated below in this Section at any time after this Agreement
becomes effective as follows:
(a) If any domestic or international event or act or occurrence
has materially disrupted the United States securities markets such as to make
it, in the Agents' opinion, impracticable to proceed with the offering of the
Shares; or if trading on the New York Stock Exchange shall have suspended; or if
the United States shall have become involved in a war or major hostilities; or
if a general banking moratorium has been declared by a state or federal
authority which has material effect on the Bank or the Conversion; or if a
moratorium in foreign exchange trading by major international banks or persons
has been declared; or if there shall have been a material change in the
capitalization, condition or business of the Company, or if the Bank shall have
sustained a material or substantial loss by fire, flood, accident, hurricane,
earthquake, theft, sabotage or other calamity or malicious act, whether or not
said loss shall have been insured; or if there shall have been a material change
in the condition or prospects of the Company or the Bank.
(b) If the Agents elect to terminate this Agreement as provided
in this Section, the Company and the Bank shall be notified promptly by the
Agents by telephone or telegram, confirmed by letter.
22
(c) If this Agreement is terminated by the Agents for any of the
reasons set forth in subsection (a) above, and to fulfill their obligations, if
any, pursuant to Sections 3, 6, 8(a) and 9 of this Agreement, the Company and
the Bank shall pay the Agents upon demand, the full amount so owing thereunder.
12. Notices. All communications hereunder, except as herein otherwise
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specifically provided, shall be in writing and, if sent to the Agents shall be
mailed, delivered or telegraphed and confirmed to: Investment Bank Services,
Inc., The 1000 Building, 0000 Xxxxxxxx'x Xxxx, Xxxxx 000, Xxxxxxxxxx, Xxxxxxxx
00000, Attention: Xx. Xxxxxxxxxxx Xxxxxxxx; and (ii) Friedman, Billings, Xxxxxx
& Co., Inc., Potomac Tower, 0000 Xxxxxxxxxx Xxxxxx Xxxxx, Xxxxxxxxx, Xxxxxxxx,
Attention: Xx. Xxxxxxxxx Xxxxxx, with a copy to Xxxxxxx, Xxxxxx & Xxxxxxxx, 0000
Xxxxxxxxx Xxxxxx, XX, Xxxxxxxxxx, XX 00000, Attention: Xxxx X. Xxxxxxxxx, Esq.
and if sent to the Company or the Bank, shall be mailed, delivered or
telegraphed and confirmed to HopFed Bancorp, Inc. and Hopkinsville Federal
Savings and Loan Association, 0000 Xxxx Xxxxxxxx Xxxxxxxxx, Xxxxxxxxxxxx,
Xxxxxxxx 00000 Attention: Mr. Xxxxx Xxxxxx, President and Chief Executive
Officer (with a copy to Xxxxxxxx, Xxxxxxx Van Deuren Xxxxxx & Rieselbach, P.C.,
000 Xxxxxxxxxxxx Xxxxxx, XX, Xxxxx Xxxxxxxx, Xxxxx 000, Xxxxxxxxxx, XX 00000-
2601, Attention: Xxxxxx X. Xxxxxxxx, Xx., Esquire).
13. Parties. This Agreement shall inure solely to the benefit of, and
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shall be binding upon, the Agents, the Company, the Bank and the controlling and
other persons referred to in Section 8 hereof, and their respective successors,
legal representatives and assigns, and no other person shall have or be
construed to have any legal or equitable right, remedy or claim under or in
respect of or by virtue of this Agreement or any provision herein contained.
14. Construction. Unless governed by preemptive federal law, this
------------
Agreement shall be governed by and construed in accordance with the substantive
laws of Kentucky.
15. Counterparts. This Agreement may be executed in separate
------------
counterparts, each of which when so executed and delivered shall be an original,
but all of which together shall constitute but one and the same instrument.
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Please acknowledge your agreement to the foregoing by signing below and
returning to the Company one copy of this letter.
HOPFED BANCORP, INC. HOPKINSVILLE FEDERAL SAVINGS
BANK
By: By:
--------------------------------------- --------------------------------
Xxxxx Xxxxxx Xxxxx Xxxxxx
President and Chief Executive Officer President and Chief
Executive Officer
Date: , 1997 Date: , 1997
--------------- ---------------
AGREED TO AND ACCEPTED:
INVESTMENT BANK SERVICES, INC.
By:
---------------------------------------
Xxxxxxxxxxx X. Xxxxxxxx
President
Date: , 1997
__________________
XXXXXXXX, XXXXXXXX XXXXXX & CO., INC.
By:
---------------------------------------
Date: , 1997
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